10th Feb 2021 08:44
(Alliance News) -Â Dunelm Group PLC on Wednesday reported strong sales growth in its financial first half, even as shops were shuttered for a large chunk of the second quarter.
Shares in the home furnishing retailer were up 3.6% at 1,306.00 pence in London early Wednesday, hitting an intraday peak of 1,367.00 and shooting to the top of the mid-cap FTSE 250 index.
For the 26 weeks to December 26, total sales surged 23% to GBP719.4 million and pretax profit jumped 34% to GBP112.4 million.
The early weeks of the half-year benefited from "pent-up demand" following the first lockdown and the delayed timing of Dunelm's summer sale, while the latter part of the half was hit by further store closures across the estate, with different regions of the UK being impacted by varying restrictions.
During the second lockdown in November, almost 85% of Dunelm's store estate was closed to customers for a four-week period.
Total sales growth in the first quarter, when Dunelm was fully open, was 37%, while sales growth in the second quarter was 12% due the shutters on physical stores being down.
"Sales were particularly strong in the first quarter, before we had to navigate the various restrictions which impacted the remainder of the period. These restrictions have become more severe in the second half of our financial year, with all but one of our stores currently closed, although we continue to serve customers through our digital channels, which have significantly advanced during the last year," said Chief Executive Nick Wilkinson.
Digital sales more than doubled in the first half and represented 35% of total sales, versus just over 20% a year ago.
Dunelm resumed dividends with a 12.0p interim payout, after no dividends were paid in financial 2020. The company said the dividend reflects the strong performance in the first half and its confidence in the medium-term outlook.
The firm said it is unable to provide "meaningful guidance" on the outlook for the full-year due to uncertainty over Covid-19 restrictions. It did add, though, that in the current quarter to date, it has been covering around 70% of prior year sales through home delivery and Click & Collect services. At this level of sales, Dunelm is making a "modest" weekly loss.
By Lucy Heming;Â [email protected]
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