September 13, 2012 / 10:10 AM / 5 years ago

UPDATE 1-Dunelm sales shine amid UK retail gloom

By Monika Shinghal

Sept 7 (Reuters) - Homewares retailer Dunelm Group Plc bucked trends with a 15 percent rise in full-year profit as its merchandise, typically sold most in winter, drew people to its stores amid unusually wet and cold weather in Britain earlier this year.

The company, which sells items such as bedding, curtains, kitchenware and lighting at its Dunelm Mills stores, said sales in its last quarter picked up substantially.

“The nature of the product that we sell is actually more of a winter type product than spring-summer. We actually have our strongest quarters in winter,” Chief Executive Nick Wharton told Reuters.

Dunelm’s like-for-like sales for the year increased 3.1 percent but grew 10.4 percent in the final quarter.

The company’s strong results come as most retailers struggle with the wettest summer in Britain in years that has forced people indoors and dampened consumer sentiment further.

“Without doubt Dunelm is outperforming the homewares market and it is gaining traction with customers keen to make their hard earned cash go that bit further in these straightened times,” Oriel Securities analyst Eithne O‘leary said in a note.

Dunelm, a family-run business, on Thursday confirmed that it was looking at increasing the total number of stores in the UK to 200 from 120.

“Store expansion remains a key driver of future growth. With many areas of the UK not covered, Dunelm has significant headroom for expansion and scope to double the portfolio to over 200,” analysts at Singer Capital Markets said in a note.

“This expansion potential is a key differentiator between Dunelm and many of its retail peers and is the core driver behind the investment case.”

While the company does not have a clear timeline for its targeted store footprint, it expects to open 12 stores on an average every year.

Dunelm also proposed a final dividend of 10 pence per share as against 8 pence last year. It said it would also return excess capital worth 32.5 pence per share, or a total of 65.8 million pounds, to shareholders.

July-June pretax profit rose to 96.2 million pounds from 83.6 million pounds a year ago. Revenue rose 12.1 percent to 603.7 million pounds.

Shares in the company were up 1.60 percent at 635 pence at 1007 GMT on the London Stock Exchange on Thursday.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below