Interim Management Statement

RNS Number : 9362B

Dunelm Group plc

10 April 2013

 



10^th April 2013

Dunelm Group plc

Interim Management Statement

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares retailer, provides the following update on trading for the third quarter of its current financial year, comprising the 13 week period ended 30^th March 2013.

Revenue

	13 weeks to 30th March 2013	13 weeks to 31st March 2012	39 weeks to 30th March 2013	39 weeks to 31st March 2012
Total sales value	£177.8m	£154.1m	£517.9m	£454.0m
Total sales growth	+15.4%	+10.7%	+14.1%	+9.4%
LFL sales growth	+5.2%	+0.6%	+3.2%	+1.0%

Total revenue for the third quarter grew by 15.4% benefiting from three store openings in the period, including one re-location of an existing superstore, taking the total store openings in the financial year to date to 13.

Like for like sales for the quarter grew by 5.2%, including the benefits of both a later end to our winter sale and an earlier Easter than in the prior year.

Gross Margin Percentage

Despite the dampening effect of the extended sale period year on year and price investment to accelerate clearance of discontinued merchandise, gross margin for the quarter is estimated to have continued its positive trend with an improvement of approximately 20 basis points compared with the prior year. With a number of initiatives contributing positively to gross margin, we anticipate that year on year growth will strengthen further over the remainder of the financial year.

Strategy Progress

Having committed to two additional new stores in the period, and taking into account the three openings in the period, our pipeline of legally committed new store opportunities now stands at five², of which one is anticipated to open prior to the financial year-end. This will take the number of store openings for the full financial year to 14³ and our superstore portfolio to 126 stores at the year-end, compared with our medium term target to operate from 200 UK superstores.

We have seen continued progress in our multi-channel business with pleasing revenue growth during the period prompted, in part, by the impact from our spring / summer catalogue launched in early March. Our key development activity to create a significantly larger, dedicated web fulfilment centre in the summer of 2013 remains on track.

Financial Position

The Group remains strongly cash generative with closing net cleared funds at bank of £32.7m. Daily average net cleared funds over the period since our return of capital on 30^th November 2012 were £ 50.0m.

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

"After a further period of solid trading and strategic progress, we now annualise our exceptionally strong comparative performance in the final quarter of last financial year. Accordingly, we anticipate that sales growth in like for like stores will become much harder to achieve in the remainder of the current financial year.

"With clear opportunities to strengthen further our customer offer in store, to roll out more new stores and to benefit from our exciting multi-channel agenda, the Board remains confident in the longer term growth prospects for the business."

For further information please contact:

Dunelm Group plc	0116 2644 356
Nick Wharton, Chief Executive
David Stead, Finance Director
MHP Communications	020 3128 8100
John Olsen / Simon Hockridge

Forthcoming Newsflow.

Dunelm's next scheduled trading update will be on 4^th July 2013 followed by the full year preliminary results announcement on 12^th September 2013.

Notes

1.   Like for like sales represent revenues from stores trading for at least one full financial year prior to 30^th June 2012 and exclude stores with significant change of space in the current or previous financial year.

2.   The committed pipeline of five stores includes relocation of one existing under-sized superstore.

3.   The net increase in superstore numbers over the financial year is expected to be 11, as the expected total of 14 openings includes two relocations and one reopening.

4.   Quarterly sales and margin analysis:

	Year to 29th June 2013
	Q1	Q2	H1	Q3
Total sales	£151.8m	£188.3m	£340.1m	£177.8m
Total sales growth	+13.8%	+13.1%	+13.4%	+15.4%
LFL sales growth	+3.0%	+1.6%	+2.2%	+5.2%
Gross margin growth	+40bps	+20bps	+30bps	+20bps*

        ^*estimated

	Year to 30th June 2012
	Q1	Q2	H1	Q3	Q4	H2	FY
Total sales	£133.4m	£166.5m	£299.9m	£154.1m	£149.7m	£303.8m	£603.7m
Total sales growth	+5.3%	+11.7%	+8.8%	+10.7%	+21.2%	+15.6%	+12.1%
LFL sales growth/(decline)	-2.0%	+3.8%	+1.1%	+0.6%	+10.4%	+5.7%	+3.1%
Gross margin growth	+50bps	-20bps	+10bps	+30bps	+80bps	+50bps	+30bps

Notes to Editors

Dunelm is market leader in the £11bn UK homewares market. The Group currently operates 134 stores, branded Dunelm Mill, of which 125 are out-of-town superstores and 9 are located on high streets, and an on-line store, to be found at www.dunelm-mill.com.

Dunelm's "Simply Value for Money" customer proposition offers industry-leading choice of quality products at keen prices, with high levels of availability and supported by friendly service. Core ranges include many exclusive designs and premium brands such as Dorma, and are supported by a frequently changing series of special buys. The superstore format provides an average of 30,000 sq ft of selling space with over 20,000 products across a broad spectrum of categories, extending from the Group's home textiles heritage (bedding, curtains, cushions, quilts and pillows) to a complete homewares offer including kitchenware and dining, lighting, wall art, furniture and rugs. Dunelm is one of the few national retailers to offer an authoritative selection of curtain fabrics on the roll, and owns a specialist UK facility dedicated to producing made to measure curtains.

Dunelm was founded in 1979 as a market stall business, selling ready-made curtains. The first shop was opened in Leicester in 1984 and over the following years the business developed into a successful chain of high street shops before expanding into broader homewares categories following the opening of the first Dunelm superstore in 1991.

Dunelm has been listed on the London Stock Exchange since October 2006 (DNLM.L) and has a current market capitalisation of approximately £1.6bn.

 

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