Proactiveinvestors United Kingdom Dunelm Group https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Dunelm Group RSS feed en Wed, 17 Jul 2019 08:00:36 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190712070004_14145931/ Fri, 12 Jul 2019 07:00:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190712070004_14145931/ <![CDATA[News - Dunelm guides to top-of-the-range profits after better fourth quarter ]]> https://www.proactiveinvestors.co.uk/companies/news/223654/dunelm-guides-to-top-of-the-range-profits-after-better-fourth-quarter-223654.html Dunelm Group PLC (LON:DNLM) said it expects full year profit to be at upper end of its previous guided range, after the homewares retailer enjoyed an easier fourth quarter.

Total revenue for 13 weeks to end-June was up 15.4% on a like-for-like basis thanks to strong underlying growth in stores and online, together with an easier comparison against a weak period last year.

READ: Dunelm raises profit expectations after strong end to the year

For the full year, Dunelm said it now expects profit before tax to be towards the upper end of the range of £124mln-£126mln guided last month, compared to £102mln last year.

Chief executive Nick Wilkinson said: “We continue to invest in the business, particularly in strengthening our digital capabilities and reaching more customers through our brand marketing initiatives.”

Looking forward, he said as the UK's largest homewares retailer, the company sees “significant opportunity for continued growth both from our stores and online”.

In the short-term, while he was cautious about the uncertain political climate and the impact it may have on consumer spending, he expect to make “further progress in the year ahead”.

Special dividend in store

Broker Peel Hunt said Dunelm has enjoyed the double whammy of favourable wet weather this year against a weak performance blamed on last year's heatwave, making "fairly exceptional" in-store LFL sales gains.

With a surprise drop in year-end net debt to just £25.3mln from £124mln a year ago, benefitting from an element of working capital timing, the broker said this means an autumn special dividend "looks highly likely". 

Hannah Thomson, senior retail analyst at GlobalData, said investment in marketing and increased brand recognition from sponsoring ITV's Good Morning programme meant that Dunelm was grabbing spend from homewares shoppers who are deserting John Lewis, where sales of homewares and furniture have fallen 4% since the start of February, and other troubled department stores such as Debenhams and House of Fraser.

The coming year will present a sterner test, she said, as Dunelm annualises a stronger performance of its core business.

Dunelm shares made an early spike on Wednesday morning but were flat at 887p after almost an hour and half of trading. 

-- Adds broker comment and share price --

]]>
Wed, 10 Jul 2019 08:08:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/223654/dunelm-guides-to-top-of-the-range-profits-after-better-fourth-quarter-223654.html
<![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190710070004_14142596/ Wed, 10 Jul 2019 07:00:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190710070004_14142596/ <![CDATA[RNS press release - Fourth Quarter Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190710070002_14142534/ Wed, 10 Jul 2019 07:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190710070002_14142534/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190628070002_14128004/ Fri, 28 Jun 2019 07:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190628070002_14128004/ <![CDATA[News - Dunelm raises profit expectations after strong end to the year ]]> https://www.proactiveinvestors.co.uk/companies/news/222471/dunelm-raises-profit-expectations-after-strong-end-to-the-year-222471.html Dunelm PLC (LON:DNLM) raised its profit expectations for the year after a strong final quarter of trading.

Ahead of its fourth-quarter results on July 10, the homewares retailer said in a trading update that it has seen “very good” like-for-like sales growth since it published its third-quarter statement in April.

READ: Dunelm shares rise as it predicts full-year profits will be “slightly ahead” of forecasts

Trading was particularly robust in May and June but this was flattered by last year’s weak performance and “unseasonably favourable” weather conditions this year.

“What do consumers spend on if they’re not eating out or jetting off on holiday? Curtains, bedding and other household accoutrements, according to homewares retailer Dunelm," said Emma-Lou Montgomery, associate director from Fidelity Personal Investing’s share dealing service.

"The dismal summer weather so far has also encouraged stay-at-homes to beautify their nests and given Dunelm, the self-styled 'the home of homes',  good like-for-like growth, in May and June in particular."

Around the same time last year Dunelm had struggled to sell its discounted product lines during the summer period, resulting in a £3mln dent to its full-year earnings.

For the year ending June 29, the company expects pre-tax profit of £124mln to £126mln, compared to £102mln in 2018.

In its April update, the group had said it sees pre-tax profits being “slightly ahead” of the top range of analysts’ forecasts of £115.6mln to £118.5mln.

Shares rose 4.2% to 942p in morning trading. 

"No numbers have been quoted, but we assume double-digit like-for-like sales and strong online, still at circa 30%+." Peel Hunt said. 

The broker expects pre-tax profit of £125mln for 2019 and £132mln for 2020.

 

 

]]>
Thu, 20 Jun 2019 07:25:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/222471/dunelm-raises-profit-expectations-after-strong-end-to-the-year-222471.html
<![CDATA[RNS press release - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190620070004_14117501/ Thu, 20 Jun 2019 07:00:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190620070004_14117501/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190531070002_14093189/ Fri, 31 May 2019 07:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190531070002_14093189/ <![CDATA[News - Dunelm shares now fairly priced, says UBS as it downgrades stance ]]> https://www.proactiveinvestors.co.uk/companies/news/218496/dunelm-shares-now-fairly-priced-says-ubs-as-it-downgrades-stance-218496.html Dunelm Group PLC (LON:DNLM) recent share price strength makes the valuation more challenging amid political and economic uncertainty, UBS said as it downgraded the stock.

“The share price has risen 84% since its last 12-month lows in December and we believe the market is now fairly pricing in Dunelm's medium-term growth opportunity,” UBS said.

The investment bank cut its rating on the stock to ‘neutral’ from ‘buy’ but raised its target price to 920p from 810p.

READ: Dunelm shares rise as it predicts full-year profits will be “slightly ahead” of forecasts

UBS said it continues to believe the business has a high-quality growth outlook underpinned by capacity exits, multi-channel enhancements and retail execution.

“However, following a c70% rerating year-to-date in the price-earnings ratio to 18x, we see limited upside to market expectations for medium-term like-for-like (LFL) growth of +4.9% compound annual growth rate to the fiscal year 2023 (vs. UBS estimate +5.2%).”

On Wednesday, Dunelm expects full-year pre-tax profit to be slightly ahead of analysts’ estimates of between £115.6-118.5mln this year after a strong third quarter.

Like-for-like sales climbed 12.5% in the third quarter with online sales up 32.1% and store sales up 9.8%.

Improved sourcing and the “positive impact” of closing the Worldstores businesses helped boost margins by 90 basis points, and that figure is expected to continue to rise throughout the final quarter.

However, Dunelm warned that political and economic uncertainty “remains heightened” as it enters the final quarter.

“With a strong FY19 coming to a close for Dunelm and with an easy LFL comp in 4Q19 of -0.1%, we look ahead to the key drivers for FY20. Top-line momentum looks well supported by 1) circa £1bn of potential capacity exits; 2) the launch of click & collect and a new website in the summer; and 3) continued customer growth from successful advertising,” UBS said.

“We also see scope for circa 20bps of EBIT margin expansion (but this could be tempered by the transition to the new web platform).

“Taken together we expect strong cash generation in FY20 (second consecutive year of more than £100mln free cash flow), resulting in special distributions of circa £100mln in FY21 (equivalent to 50p/share).”

In morning trading, shares in Dunelm were flat at 886.5p.

]]>
Fri, 12 Apr 2019 10:40:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218496/dunelm-shares-now-fairly-priced-says-ubs-as-it-downgrades-stance-218496.html
<![CDATA[News - Dunelm shares rise as it predicts full-year profits will be “slightly ahead” of forecasts ]]> https://www.proactiveinvestors.co.uk/companies/news/218301/dunelm-shares-rise-as-it-predicts-full-year-profits-will-be-slightly-ahead-of-forecasts-218301.html Dunelm Group PLC (LON:DNLM) now expects full-year profits to be “slightly ahead” of forecasts after it enjoyed a “strong” third quarter.

Like-for-like sales at the homeware retailer in the three months ended 30 March climbed 12.5%, driven by a 32.1% jump in like-for-like online revenue and a 9.8% rise in like-for-like store sales. That means total like-for-like sales are up by two-thirds so far this year.

READ: Dunelm dragged lower by Peel Hunt downgrade

Improved sourcing and the “positive impact” of closing the Worldstores businesses helped boost margins by 90 basis points, and that figure is expected to continue to rise throughout the final quarter.

Analysts currently expect Dunelm to post a pre-tax profit of between £115.6-118.5mln this year, but the company is guiding for the actual number to be slightly higher than the top of the range.

“Political and economic uncertainty remains heightened as we enter the final quarter of our financial year,” read Wednesday’s trading update.

“However, if there are no significant changes to current trends in consumer demand, we expect to report full-year profit before tax slightly ahead of the top of the range of current analysts' forecasts.”

In a bid to keep up with the times, Dunelm has been improving its digital capabilities such as click and collect and its website, while shoppers can now also use in-store tablets to place orders.

The FTSE 250 group said the changes had gone down well with customers and that it is looking to increase its investment in digital technologies as it adapts to a “dynamic retail climate”.

Bosses added they would also spend more money on marketing, having recently agreed to sponsor ITV’s flagship daytime TV show This Morning.

‘More customers want to shop at Dunelm’

“We are delighted that customers continue to respond well to our improving homewares offer as we help them create a home they love,” said chief executive Nick Wilkinson.

“The strong growth in the third quarter reflects our ongoing focus on attracting more customers to the brand and giving them more reasons to shop with us through great product and service. Our performance was also buoyed by a positive homewares market.

“Our multichannel proposition is improving all the time and we are excited about the opportunities ahead of us as we continue to invest in and develop our digital capabilities.”

Dunelm shares rose 2.3% to 885p on Wednesday morning.

]]>
Wed, 10 Apr 2019 08:25:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218301/dunelm-shares-rise-as-it-predicts-full-year-profits-will-be-slightly-ahead-of-forecasts-218301.html
<![CDATA[RNS press release - Third Quarter Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190410070002_14035103/ Wed, 10 Apr 2019 07:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190410070002_14035103/ <![CDATA[RNS press release - Block listing Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190409070017_14033389/ Tue, 09 Apr 2019 07:00:17 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190409070017_14033389/ <![CDATA[News - Dunelm shares dragged lower by Peel Hunt downgrade ahead of quarterly trading update ]]> https://www.proactiveinvestors.co.uk/companies/news/218049/dunelm-shares-dragged-lower-by-peel-hunt-downgrade-ahead-of-quarterly-trading-update-218049.html Dunelm Group PLC (LON:DNLM) shares were under pressure on Friday after Peel Hunt downgraded its recommendation on the homewares retailer ahead of next week’s third-quarter trading update.

Peel Hunt cut its rating to ‘add’ from ‘buy’ but raised its target price to 1,000p from 800p, noting that Dunelm’s shares have risen sharply since it upgraded the stock in December.

READ: Dunelm stockpiles ahead of Brexit but shares jump on improved interims and dividend hike

“Our enthusiasm for Dunelm remains unchanged, we see significant upside over the next 2-3 years as management unlocks the benefit of a much more aligned, omni channel offering,” the broker said.

“We can also see Dunelm taking market share from the shrinking department store sector and the generalists.

“However, the shares have risen 60% since we upgraded to ‘buy’ in December and now trade on 2020 price-earnings ratio of circa 18 x, a well-deserved structural growth multiple.”

Improved online offering and product ranges boost Dunelm trading and shares 

Dunelm’s trading and share price outperformance has so far been driven by the company’s strategy to focus on an improved core offering and more compelling shopping experience, Peel Hunt said.

Peel Hunt sees the potential for an improved multi-channel offering, click and collect, raised brand awareness and the potential for margins to pick up from relative historical lows on expected cost leverage, to provide the “foundation for sustainable profit growth and cash generation over the next few years”.

The immediate upside is “more limited”, Peel Hunt said, although the broker can see Dunelm continuing to outperform over 2019 into the medium term.

Peel Hunt sees potential return of special dividend  

“With improved cash generation comes the potential return of the special dividend, most likely early in the next financial year,” it said.

On the back of a better multi-channel platform and increase in product ranges, Dunelm’s performance over the first half was much stronger than expected with a 3.8% rise in like-for-like store sales and online growth of 35.8%.

Dunelm said in the interims that its trading momentum had continued into the early part of the third quarter and it was confident of delivering market expectations for the full year for pre-tax profits of between £114mln-£118mln.

“We still don’t want to let our forecasts run away at this early stage, but our assumptions look too conservative, especially in light of the prior year heat wave effect in Q4 that creates a sharp drop off in the comparative,” Peel Hunt said.

In late morning trading, shares fell 1.2% to 890p. 

]]>
Fri, 05 Apr 2019 10:53:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218049/dunelm-shares-dragged-lower-by-peel-hunt-downgrade-ahead-of-quarterly-trading-update-218049.html
<![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190329070002_14020356/ Fri, 29 Mar 2019 07:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190329070002_14020356/ <![CDATA[News - Dunelm stockpiles ahead of Brexit but shares jump on improved interims and dividend hike ]]> https://www.proactiveinvestors.co.uk/companies/news/214526/dunelm-stockpiles-ahead-of-brexit-but-shares-jump-on-improved-interims-and-dividend-hike-214526.html Dunelm Group PLC (LON:DNLM) has said it has begun stockpiling parts of its best-selling lines and was hedging against a “sudden decline” in sterling in preparation for Brexit, although shares jumped in early deals as it reported improved interims and hiked its dividend.

The FTSE 250 homeware retailer’s chief financial officer, Laura Carr, said that the firm imported less than 1% of its goods from the EU, however it had identified “some risks” from potential disruption at ‘deep-sea’ ports in the aftermath period, and as such was taking steps such as purchasing incremental stock and securing additional supply chain capacity.

READ: Dunelm shares surge as investors cheer Christmas trading update

Carr added that like other retailers it was “exposed to any impact Brexit may have on currency and consumer confidence” but the impact of any significant disruption to the homewares market was “difficult to predict”.

The group had previously cautioned on the “unprecedented levels of uncertainty” earlier this year but maintained that its pre-tax profits would be modestly ahead of the top range of market forecasts if the homewares market continued to grow at a similar rate.

Dividend hiked amid strong profit and margin growth

For the first half, Dunelm reported pre-tax profits of £70mln, up from £60mln a year ago, while like-for-like (LFL) revenues rose to £506.7mln from £473.9mln.

Gross margins had also risen in the period to 50.3% from 48.6% while net debt had fallen to £72.9mln from £134.3mln.

The interim dividend was raised to 7.5p per share from 7p a year ago.

In a more general outlook, chief executive Nick Wilkinson said that group was “confident” of delivering market expectations for the full year, which were estimated at pre-tax profits of between £114mln-£118mln, provided there was “no material change in the macro-economic environment”.

Firm “rightly conservative” on Brexit risk, says broker

In a note to clients, analysts at broker Peel Hunt said the results had been in line with the upgraded expectations from the trading update in January, adding that Dunelm’s management was “rightly conservative on Brexit risk”.

The broker also reiterated its ‘Buy’ rating on the stock, with special dividends “on track” to return in the 2020 fiscal year.

“Mathematically, following £9mln improvement in core Dunelm profits in [the first half], the consensus is based on a £7mln decline [year-on-year in the second half]; we expect small upgrades to the consensus as a consequence.”

Shares were up 4.6% at 750p.

]]>
Wed, 13 Feb 2019 08:25:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214526/dunelm-stockpiles-ahead-of-brexit-but-shares-jump-on-improved-interims-and-dividend-hike-214526.html
<![CDATA[RNS press release - Interim Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190213070003_13967211/ Wed, 13 Feb 2019 07:00:03 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190213070003_13967211/ <![CDATA[News - Dunelm shares surge as investors cheer Christmas trading update ]]> https://www.proactiveinvestors.co.uk/companies/news/212030/dunelm-shares-surge-as-investors-cheer-christmas-trading-update-212030.html Homewares retailer Dunelm Group PLC (LON:DNLM) expects first-half profit to rise 16.6% despite charges related to the collapse of one of its bedding suppliers as it delivered sales growth over the Christmas trading period.  

In the second quarter ended December 29, like-for-like revenue increased 9.0% to £282.5mln with store sales up 5.7% to £246.4mln and online sales up 37.9% to £36.1mln.

READ: Dunelm cautious over the short-term despite solid start to new financial year

Total group revenue edged up 2% to £303.6mln for the period.

First-half like-for-like sales grew 6.95 to £506.8mln and total revenue gained 1.25 to £551.8mln.

The company estimates first-half pre-tax profit of £70mln after a £3.8mln impairment charge associated with the Fogarty bedding manufacturer entering administration in October.

That compares to pre-tax profit before exceptional costs of £60mln the same period a year ago when Dunelm suffered £6.9mln of trading losses from Worldstores.

Worldstores integration 

Dunelm bought WS Group, which owns the Worldstores, Kiddicare and Achica brands, in 2016 when the business was close to collapse. The group has now closed the Worldstores and Kiddicare websites and moved all business to the Dunelm brand.

The retailer said its gross margin improved following the elimination of lower margin sales from the Worldstores businesses.

It estimates the total gross margin increased by 190 basis points (bps) in the second quarter compared to a year ago. At the Dunelm brand, the gross margin rose 120bps as the impact of the integration of Worldstores’ lines was offset by foreign exchange tailwinds and improved sourcing.

“By focusing back on our core business, under one Dunelm brand, we are improving our trading and financial performance,” said chief executive Nick Wilkinson.

"The positive like-for-like revenue growth both in stores and online highlights the strength of our customer offer.

“Our multichannel proposition is improving all the time, and we are looking forward to introducing our new web platform in the summer, using more flexible technology which will allow us to better serve our customers in a changing retail landscape.”

Dunelm cautious about outlook for rest of the year

Dunelm said it remains cautious about the outlook given the “unprecedented levels of uncertainty” facing consumers and businesses in the UK but expects full-year pre-tax profit to be modestly ahead of the top range of market forecasts if the homewares market continues to grow at a similar rate to that experienced in the first half.

The current range of analysts’ expectations for pre-tax profit in fiscal year 2019 is £108mln to £112mln.

Net debt stood at £78mln on December 29, down from £134mln last year.

"Despite our strong performance in the year to date, we remain cautious on the outlook for the second half given the ongoing uncertainty in the UK economy," said Wilkinson"

"However, in the medium term, we see significant opportunity to grow the business by focusing on our customers and seizing opportunities in a digital world."

Shares jumped 10% to 642.5p in morning trading. 

Broker raises target price after 'strong' second-quarter trading

UBS maintained a ‘buy’ rating on the stock and raised its target price to 650p from 600p.

The investment bank also lifted its forecast for full-year like-for-like revenue growth to 7.5% from 7.5%. It now estimates a gross margin of 150 basis points, compared to 100 basis points previously, and raised its forecast for pre-tax profit to £116mln from £108mln.

“Dunelm has seen strong trading in Q2 as new management focus on the core business,” UBS said.

“Worldstores is no longer a major distraction as the acquired websites have been closed and the online capabilities rolled into dunelm.com.”

RBC Capital Markets said it thinks the outlook for the UK homewares market has improved but consumer uncertainty remains.

"While there are opportunities going forward, we think Dunelm’s medium term’s £2bn sales and market share target look ambitious," it said.  

"Dunelm is trading at c.12.4x 2019 calendar year price/earnings and offers a circa 5% dividend yield."

]]>
Mon, 07 Jan 2019 07:59:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/212030/dunelm-shares-surge-as-investors-cheer-christmas-trading-update-212030.html
<![CDATA[RNS press release - Second Quarter Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190107070003_13924981/ Mon, 07 Jan 2019 07:00:03 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20190107070003_13924981/ <![CDATA[RNS press release - Gift of shares and Director/PDMR holding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070016_13895089/ Fri, 07 Dec 2018 07:00:16 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070016_13895089/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070013_13895091/ Fri, 07 Dec 2018 07:00:13 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070013_13895091/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070010_13895076/ Fri, 07 Dec 2018 07:00:10 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070010_13895076/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070005_13895063/ Fri, 07 Dec 2018 07:00:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181207070005_13895063/ <![CDATA[News - Dunelm shares surge as Peel Hunt upgrades to ‘Buy’ on “clear catalysts” for recovery in 2019 ]]> https://www.proactiveinvestors.co.uk/companies/news/210390/dunelm-shares-surge-as-peel-hunt-upgrades-to-buy-on-clear-catalysts-for-recovery-in-2019-210390.html Shares in FTSE 250 homeware retailer Dunelm Group PLC (LON:DNLM) surged in late-morning trading Monday after it was upgraded to ‘Buy’ from ‘Hold’ by analysts at City broker Peel Hunt as they cited “clear catalysts” for a recovery following a difficult year for the firm.

In a note to clients, the broker said that while the acquisition and integration of Worldstores in the previous fiscal year had negatively impacted the business, the companies core offering had “visibly sharpened up” since late summer, noting “a sharp step-up in trading performance in [the first quarter] against very tough comparatives”.

READ: Dunelm cautious over the short-term despite solid start to new financial year

In October, the firm reported that in the 13 weeks to September 28, like-for-like (LFL) sales were up 4.2% on the same period a year earlier (when LFL sales were up 9.3% on the same period of 2016).

Analysts also noted an acceleration in Dunelm’s online offering with “strong autumn traffic growth, improved brand traffic and a pick-up in Google Trends data”.

“Only 13.5% of Dunelm’s sales are generated online and there is still no click & collect offer for customers. Playing catch-up, online sales are accelerating as Dunelm drives range, digital marketing spend, brand awareness and focuses on conversion.”

At the start of the fiscal year, Dunelm reported that online LFL revenues were up 33.3% as it remained on track to launch its new web platform in the third quarter.

READ: Dunelm to simplify the business as annual profit falls

Peel Hunt also said special dividend payouts were “back on the agenda” for the current year.

“Dunelm has a stated policy of paying out special dividends when average debt/EBITDA falls to 0.25x (sub £40mln), gearing up to 0.75x debt/EBITDA. Assuming no acquisitions or capital projects, then we forecast special dividends to return after the current financial year, potentially doubling the already attractive c5% yield”.

The broker also upped its price target for Dunelm to 750p from 550p, saying the business was built on “strong foundations; a UK market leader with a 5% rent-to-sales ratio, 10%+ EBIT margins, 15% [return on capital employed], 10% [free cash flow] yield and one of the lowest levels of operational gearing in the sector”.

Dunelm suffered a number of setbacks in the previous financial year, including a £3mln hit to its bottom line as it struggled to offload discontinued items in its summer sale which piled pressure on its margins.

Dunelm shares were up 13.5% to 615p, an 18% discount to Peel Hunt's new target price.

]]>
Mon, 03 Dec 2018 11:34:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/210390/dunelm-shares-surge-as-peel-hunt-upgrades-to-buy-on-clear-catalysts-for-recovery-in-2019-210390.html
<![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181203070102_13888053/ Mon, 03 Dec 2018 07:01:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181203070102_13888053/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181203070008_13888000/ Mon, 03 Dec 2018 07:00:08 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181203070008_13888000/ <![CDATA[RNS press release - Result of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181129124001_13885520/ Thu, 29 Nov 2018 12:40:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181129124001_13885520/ <![CDATA[RNS press release - Confirmation of Board Changes ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181129070013_13884380/ Thu, 29 Nov 2018 07:00:13 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181129070013_13884380/ <![CDATA[RNS press release - Sharesave option granted to Nick Wilkinson ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181116081431_13869843/ Fri, 16 Nov 2018 08:14:31 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181116081431_13869843/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181030070004_13846669/ Tue, 30 Oct 2018 07:00:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181030070004_13846669/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181018070008_13833125/ Thu, 18 Oct 2018 07:00:08 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181018070008_13833125/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181015070005_13827916/ Mon, 15 Oct 2018 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181015070005_13827916/ <![CDATA[News - Dunelm cautious over the short-term despite solid start to new financial year ]]> https://www.proactiveinvestors.co.uk/companies/news/206864/dunelm-cautious-over-the-short-term-despite-solid-start-to-new-financial-year-206864.html Home-wares flogger Dunelm Group PLC (LON:DNLM) said the new fiscal year has got off to a good start, though it remains cautious about the future.

In the 13 weeks to September 28, like-for-like (LFL) sales were up 4.2% on the same period a year earlier (when LFL sales were up 9.3% on the same period of 2016).

READ Dunelm to simplify the business as annual profit falls

LFL shop revenues rose 1.3% year-on-year while online revenues were up 33.3% on an LFL basis. The retailer is on track to launch its new web platform in the third quarter of the current financial year (i.e. the first quarter of calendar 2019).

Total group revenue edged up 0.1% to £248.2mln from the year before.

As of September 29, net debt was roughly £109mln, compared with net debt of £130mln a year earlier.

"We delivered a good trading performance in the first quarter. Our positive LFL growth highlights the strength of our customer offer which we are continually working hard to improve as we focus on our core business again under one brand, with one platform and one supply chain,” said Nick Wilkinson, Dunelm's chief executive:

"We continue to improve the multichannel experience for our customers and our stores play a vital role in this. I am pleased at the progress we are making with tablet-based selling in store to offer our full product range to all our customers,” he added.

Dunelm has tablets in its store that enable home delivery orders to be placed by customers.

"Whilst we are cautious about the months ahead due to the level of market and customer uncertainty, I see plenty of opportunity over the medium term as we continue our journey to become the leading multichannel retailer in our sector, helping our customers create homes they love.,' Wilkinson said.

Dunelm cautions about market and customer uncertainty in coming months, reporting slowdown in Q1 like-for-like revenue growth due to tough comparative

— Mike van Dulken (@Accendo_Mike) October 11, 2018 ]]>
Thu, 11 Oct 2018 08:01:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/206864/dunelm-cautious-over-the-short-term-despite-solid-start-to-new-financial-year-206864.html
<![CDATA[RNS press release - First Quarter Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181011070005_13824286/ Thu, 11 Oct 2018 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181011070005_13824286/ <![CDATA[RNS press release - Annual Financial Report ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181009070002_13820839/ Tue, 09 Oct 2018 07:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181009070002_13820839/ <![CDATA[RNS press release - Block listing Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181005070004_13817483/ Fri, 05 Oct 2018 07:00:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20181005070004_13817483/ <![CDATA[News - Dunelm to simplify the business as annual profit falls ]]> https://www.proactiveinvestors.co.uk/companies/news/204703/dunelm-to-simplify-the-business-as-annual-profit-falls-204703.html Dunelm PLC (LON:DNLM) shares rose on Wednesday after the homewares retailer said it was taking action to simplify the business after its annual profit was hit by continued tough trading conditions on the high street and the impact of its Worldstores acquisition.

The FTSE 250-listed group said its pretax profit for the year to the end of June fell 6.7% to £102mln on sales 9.9% higher at £1.05bln. Dunelm nudged up the dividend by 1.9% to 26.5p.

READ: Dunelm to take £3mln hit as it struggles to get rid of clearance items in summer sale

It said store like-for-like sales increased by 1.0%, while like-for-like online sales were up 37.9%, reflecting its increased focus on this channel as customer shopping behaviour continues to move online. Like many of its bricks-and-mortar peers, Dunelm has been growing its online business as it reacts to changing consumer habits.

Analysts at UBS had forecast pretax profit of £102mln, in line with guidance issued in July when Dunelm said it had struggled to sell its discounted product lines during the summer period, resulting in a £3mln dent to its earnings.

The Swiss bank added that the market was weaker than expected a year ago, with continued pressure on discretionary incomes as well as lower consumer confidence and a weaker housing market recently showing up in the figures of fellow retailer John Lewis.

Future profitable growth drive

"Following healthy sales growth over the past year, we are now taking steps to simplify the business under the core Dunelm brand, with one web platform and an integrated supply chain. This will allow us to respond more quickly to the changing consumer environment and drive future profitable growth,” Dunelm’s CEO Nick Wilkinson said in a statement.

"The UK retail environment remains challenging, but against this difficult background we have traded in line with expectations during the current financial year to date,” he added.

The company, which issued a profit warning in May, attributed some of the fall in earnings to its acquisition of Worldstores but said the integration of the business was on track.

Neil Wilson, chief market analyst at Markets.com commented: “The chief concern is that Dunelm is heavily discounting to maintain market share, generating positive headline like-for-like sales growth at the expense of profit.”

He added: “The acquisition of lower margin Worldstores has been earnings dilutive but management is progressing with the integration of the business under the core Dunelm brand. UK retail market remains tough, especially physical stores, whilst the softer property market undoubtedly means people are updating soft furnishings less often.”

In mid-afternoon trading, Dunelm shares were 8% higher at 551p.

 -- Adds analyst comment, share price --

]]>
Wed, 12 Sep 2018 07:28:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/204703/dunelm-to-simplify-the-business-as-annual-profit-falls-204703.html
<![CDATA[RNS press release - Final Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180912070004_13787260/ Wed, 12 Sep 2018 07:00:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180912070004_13787260/ <![CDATA[RNS press release - Board Changes ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180829070006_13770586/ Wed, 29 Aug 2018 07:00:06 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180829070006_13770586/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180823104929_13766130/ Thu, 23 Aug 2018 10:49:29 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180823104929_13766130/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180802094110_13741393/ Thu, 02 Aug 2018 09:41:10 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180802094110_13741393/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180723070007_13726724/ Mon, 23 Jul 2018 07:00:07 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180723070007_13726724/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180713105100_13717269/ Fri, 13 Jul 2018 10:51:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180713105100_13717269/ <![CDATA[News - Dunelm to take £3mln hit as it struggles to get rid of clearance items in summer sale ]]> https://www.proactiveinvestors.co.uk/companies/news/200665/dunelm-to-take-3mln-hit-as-it-struggles-to-get-rid-of-clearance-items-in-summer-sale-200665.html Dunelm Group PLC (LON:DNLM) is having to take a £3mln hit as it struggled to get rid of its discontinued lines during the summer sale.

The homeware retailer usually clears out its soon-to-be out of season products during the sale but “disappointing footfall” meant it wasn’t able to sell as much as it had hoped.

READ: Dunelm downgraded by JP Morgan Cazenove

As a result, it has had to chop the prices of some of those sale items even further, meaning it will bring in £3mln less from the clearance merchandise than it had originally anticipated.

The reduced prices will weigh on the group’s gross margin for the year ended June 30, which is expected to have fallen 90 basis points to 48.0%.

Like many of its bricks-and-mortar peers, Dunelm has been growing its online business as it reacts to changing consumer habits.

Like-for-like sales from its website surged by almost a third over the past year to £105.4mln, while the stores also returned to growth with LFL sales climbing 8.2% to £805mln.

Including new stores and the addition of Worldstores.co.uk and Kiddicare.com – purchased at the end of 2016 – total group sales jumped 9.9% to £1.05bn.

Profits set to fall

The rise is revenues won’t offset the drop-off in margins though, with full-year profit before tax forecast to fall to £102.0mln (2017: £109.3mln). Net debt is expected to be broadly similar to last year at £122mln.

“I am delighted to have joined Dunelm as it gathers pace on the journey to becoming a truly multi-channel business,” said chief executive Nick Wilkinson, who took up his role earlier this year.

“I firmly believe that our homewares authority, combined with our increasing ability to adapt to evolving consumer trends, means that there is very significant potential for growth of the Dunelm brand.”

He added: “We have expanded our customer reach and digital capabilities significantly over the last twelve months and will continue to do so as we exploit the technology assets which we acquired with Worldstores.”

Dunelm shares fell 2% to 161.1p in early deals.

]]>
Thu, 12 Jul 2018 09:01:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/200665/dunelm-to-take-3mln-hit-as-it-struggles-to-get-rid-of-clearance-items-in-summer-sale-200665.html
<![CDATA[RNS press release - Year-end Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180712070004_13714729/ Thu, 12 Jul 2018 07:00:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180712070004_13714729/ <![CDATA[News - Dunelm downgraded by JPMorgan Cazenove as profit warning and market conditions weigh ]]> https://www.proactiveinvestors.co.uk/companies/news/197912/dunelm-downgraded-by-jpmorgan-cazenove-as-profit-warning-and-market-conditions-weigh-197912.html Dunelm Group PLC (LON:DNLM) has been downgraded to ‘Neutral’ from ‘Overweight’ by JPMorgan Cazenove as a profit warning issued in May coupled with an uncertain market outlook dented forecasts.

The investment bank said: “We believe that the UK consumer environment is uncertain and that big-ticket spending, in particular, remains weak. Dunelm’s performance has historically been correlated to housing transaction levels, and, with the group’s now higher weighting into big-ticket following the acquisition of Worldstores, we see greater risk than historically to a softer market outlook.”

READ: Dunelm expects lower profits as difficult retail market hits sales

Analysts also questioned whether the FTSE 250 retailer could continue to compete effectively in the UK homewares and furniture markets as they were unsure whether the company’s offering provided “enough inspiration and uniqueness”.

The bank also cut its price target for the firm to 620p from 710p, in addition to a reduction in its 2018 and 2019 financial forecasts by 5% and 10% respectively: “reflecting a combination of softer top line growth and negative operational gearing, as well as higher gross margin risk which we think continues into FY 19.”

On May 24, Dunelm said it expected its underlying profits for 2018 to be “moderately below” the previous year after weak consumer demand affected its sales figures.

The company reported a 4.7% drop in like-for-like store sales for the fourth quarter to date, saying trading conditions have been “materially more challenging than had been expected, within a soft homewares market”.

In mid-morning trading Wednesday, Dunelm shares were up 0.28% at 546.5p.

]]>
Wed, 30 May 2018 10:12:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/197912/dunelm-downgraded-by-jpmorgan-cazenove-as-profit-warning-and-market-conditions-weigh-197912.html
<![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180529070015_13657094/ Tue, 29 May 2018 07:00:15 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180529070015_13657094/ <![CDATA[News - Dunelm expects lower profits as difficult retail market hits sales ]]> https://www.proactiveinvestors.co.uk/companies/news/197720/dunelm-expects-lower-profits-as-difficult-retail-market-hits-sales-197720.html UK homewares retailer Dunelm Group PLC (LON:DNLM) sees 2018 underlying profits falling “moderately below” last year’s after weak consumer demand hit sales.

The company reported a 4.7% drop in like-for-like store sales for the fourth quarter to date, saying trading conditions have been “materially more challenging than had been expected, within a soft homewares market”.

Online like-for-like sales jumped 43.7% but the weak sales at stores meant overall sales rose just 0.1% in the period.

In mid-afternoon trading, shares plunged 14% to 522p.

Dunelm has become the latest victim to a difficult retail environment, with consumers tightening their purse strings due to the squeeze of higher inflation and sluggish wage growth.

Bricks and mortar retailers have particularly suffered as more consumers do their shopping online. 

READ: Dunelm shares rise as retailer sees good third quarter sales performance

Chief executive Nick Wilkinson said: “We have seen an unexpectedly challenging start to the fourth quarter, with continuing softness in the homewares market and reduced footfall to our stores.”

But Wilkinson said the group is making good progress on its strategic plans to be a multi-channel retailer and has been improving its customer offerings.

"We will learn from recent trading and I remain optimistic about our ability to deliver strong sales and profit growth in the future,” he said.

Dunelm expects total sales for the full year of around £1.05bn, up 9.8% on the prior year’s £955mln. It said it is also on track to achieve “strong gross margin growth” from trading in the fourth quarter.

]]>
Fri, 25 May 2018 14:26:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/197720/dunelm-expects-lower-profits-as-difficult-retail-market-hits-sales-197720.html
<![CDATA[RNS press release - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180525115656_13656040/ Fri, 25 May 2018 11:56:56 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180525115656_13656040/ <![CDATA[News - Dunelm appoints Laura Carr as new chief financial officer ]]> https://www.proactiveinvestors.co.uk/companies/news/197263/dunelm-appoints-laura-carr-as-new-chief-financial-officer-197263.html Dunelm Group PLC (LON:DNLM) has announced that Laura Carr will be appointed as chief financial officer of the company in autumn.

The FTSE 250-listed firm said Laura Carr is group Financial controller of Compass Group (LON:CPG), and prior to this role she was CFO of Indigo Books & Music, and held a number of senior finance roles with Japan Tobacco International. She qualified as a Chartered Accountant with PriceWaterhouseCoopers.

Read: Dunelm shares rise as retailer sees good third quarter sales performance

Laura Carr succeeds Keith Down, who is stepping down to take up a role closer to his family home. Meanwhile David Stead, Dunelm’s former CFO, has joined the group as interim CFO to help smooth the transition, which has allowed Keith Down to step down from the board earlier than expected, on 24 May.

Andy Harrison, chairman of Dunelm said: “ We are looking forward to Laura joining the Dunelm team to work with Nick Wilkinson, our new CEO.”

He added: “Laura brings a breadth of business and finance experience, which will really help us to achieve our ambitious business plans to become the leading multi-channel retailer in our space."

]]>
Fri, 18 May 2018 08:19:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/197263/dunelm-appoints-laura-carr-as-new-chief-financial-officer-197263.html
<![CDATA[RNS press release - Appointment of Chief Financial Officer ]]> https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180518070005_13646122/ Fri, 18 May 2018 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3443/LSE20180518070005_13646122/