Dunelm Group plc : Trading Update

Released: 10/01/2012

RNS Number : 2432V

Dunelm Group plc

10 January 2012

10th January 2012

TRADING UPDATE

26 weeks to 31st December 2011

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading specialist homewares retailer, issues the following trading update in respect of the 26 week period to 31st December 2011.

Revenue

Group revenue for the period was:

	FY12 (H1)	FY11 (H1)
Total sales	£299.9m	£275.7m
Total sales growth	8.8%	8.5%
Contribution from new space	7.7%	9.7%
LFL sales growth/(decline)1	1.1%	(1.2%)

Total revenue for the half year grew by 8.8%, benefitting from the Group's continued development programme. This programme included 11 new superstore openings, one of which was a relocation from an existing superstore unit.

Like for like sales for the half year grew by 1.1%. Within this, LFL sales growth in the second quarter was 3.8%, in part reflecting the more difficult trading environment in the weeks immediately preceding Christmas 2010, when snow was estimated to have dampened sales over the quarter by 200-300bps. The revenue performance for the half year was stronger than for the homewares market, as measured by the BRC home textiles index.

Gross Margin Percentage

Gross margin for the period is estimated to have improved by 10 basis points compared with the same period in the prior year, reflecting a small year on year decline in the second quarter as expected. We continue to anticipate that gross margin over the full year will be broadly in line with the prior year. 

Strategy Progress

After the high level of new store openings during the first half, the total number of superstores trading at the period end was 113. A further eight new store opportunities were committed as at the period end, of which four are anticipated to open in the second half2. Our medium term target remains 150 - 200 superstores across the UK.

We have also significantly enhanced our multi-channel proposition through the successful launch of Reserve & Collect.

Financial Position

As at 31st December 2011 net cleared funds at bank amounted to £40.4m. The average daily net cash position over the half year was £47.6m.

Commenting on Dunelm's performance, Nick Wharton, Chief Executive, said:

"Dunelm has achieved robust trading results in a very demanding retail environment, and has continued to gain market share on a like for like basis. We have also made significant progress on our longer term development plan, not only delivering a very ambitious store opening programme over the last quarter, but also making fundamental improvements to our on-line offer that have been well received by customers. The combination of satisfactory trading and a disciplined approach to operating costs means that the Board anticipates that profit before tax for the half year will be approximately £52m.

"We remain cautious about the impact of the UK consumer environment on our trading in the near term. Nevertheless, with eight further store openings already committed, and with our "Simply Value for Money" proposition resonating with a wide range of customers, we remain confident in the future growth prospects for the business."

Notes

1.   Like-for-like sales represent revenues from stores trading for at least one full financial year prior to 3rd July 2011 and exclude stores with significant change of space in the current or previous financial year.

2.   The committed pipeline of eight stores includes one freehold acquisition and one existing under-sized store to be relocated to a previously acquired freehold site.

3.   Quarterly sales analysis:

	Year to 30th June 2012				Year to 2nd July 2011
	Q1	Q2	H1		Q1	Q2	H1
Total sales	£133.4m	£166.5m	£299.9m		£126.7m	£149.0m	£275.7m
Total sales growth	+5.3%	+11.7%	+8.8%		+11.6%	+5.9%	+8.5%
Contribution from new space	+7.3%	+7.9%	+7.7%		+9.5%	+10.1%	+9.7%
LFL sales growth/(decline)	-2.0%	+3.8%	+1.1%		+2.1%	-4.2%	-1.2%

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