TIDMDNLM
RNS Number : 9515T
Dunelm Group plc
12 January 2017
12(th) January 2017
Dunelm Group plc
Second Quarter Trading Update
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading
homewares retailer, reports the following trading update for the
second quarter of its current financial year, comprising the 13
week period ended 31(st) December 2016.
Revenue
Total revenue for the second quarter rose by 6.6% to GBP261.9m.
Total revenue, excluding the acquisition of Worldstores, for the
second quarter rose by 3.3% to GBP253.8m. Total like-for-like (LFL)
growth (combining LFL stores and Home Delivery) increased by 0.2%.
Due to the change in the accounting period end date, the figures
include six days of the Winter Sale, compared to eight days in the
comparative period last year. Without this impact LFL growth would
have been approximately GBP4.0m higher (equivalent to 1.7% in the
quarter and 0.9% over the half year). We expect this to reverse in
the second half of the year.
As expected, we saw an improved second quarter with seasonal
product in particular performing well. The homewares market has
continued to decline but we believe that we are continuing to
outperform the market as a whole.
We also continue to see good growth in the online business,
including a 21.7% increase in home delivery sales for the
quarter.
13 weeks to 31(st) 26 weeks to 31(st)
December 2016 December 2016
-------------------- ---------------------------------- ----------------------------------
Sales YoY Growth YoY Growth Sales YoY Growth YoY Growth
(GBPm) (GBPm) (%) (GBPm) (GBPm) (%)
-------------------- -------- ----------- ----------- -------- ----------- -----------
-1.4
LFL stores 215.6 -3.0 % 389.4 -12.5 -3.1%
-------------------- -------- ----------- ----------- -------- ----------- -----------
Home Delivery 20.1 +3.5 +21.7% 33.7 +5.6 +20.1%
-------------------- -------- ----------- ----------- -------- ----------- -----------
Total LFL 235.7 +0.5 +0.2% 423.1 -6.9 -1.6%
-------------------- -------- ----------- ----------- -------- ----------- -----------
Non-LFL stores 18.1 +7.5 +70.6% 29.3 +11.2 +61.4%
-------------------- -------- ----------- ----------- -------- ----------- -----------
Total Dunelm
excl. Worldstores 253.8 +8.0 +3.3% 452.4 +4.3 +1.0%
-------------------- -------- ----------- ----------- -------- ----------- -----------
Worldstores* 8.1 +8.1 - 8.1 +8.1 -
-------------------- -------- ----------- ----------- -------- ----------- -----------
Total Dunelm
Group 261.9 +16.1 +6.6% 460.5 +12.4 +2.8%
-------------------- -------- ----------- ----------- -------- ----------- -----------
*Worldstores figures represent the five week period post
acquisition on 28th November 2016, until 31st December 2016
Gross Margin
Gross margin percentage for the half year is estimated to be
broadly flat compared with the first half of last financial year.
In the quarter, we started to see some impact from adverse currency
conditions, affecting goods sourced directly or from third parties,
and expect this to increase as we move into the second half of the
year. Overall, we expect gross margin to remain broadly flat in the
second half, compared to the same period last year.
Store Portfolio
We opened five new stores in the period leaving our superstore
footprint at 157 stores. We are now legally committed to a further
seven new stores of which five are due to open in the current
financial year. We have completed three store refits within the
year to date and have at least a further nine planned for the
remainder of the financial year.
Business Investment
We are continuing to develop our strategic plans and invest in
our business, particularly in systems, capability and
marketing.
We have been improving our supply chain with the opening of a
new warehouse and the consolidation of our suppliers. These
initiatives have caused some disruption to in-store availability
during the quarter and we have incurred GBP3m of additional
transitional costs as part of that process. However, availability
has already improved to near normal levels and we should see
significantly less transitional costs in the second half of the
year.
Worldstores
The development of our online business is a key strategic
objective and we firmly believe our acquisition of Worldstores,
which completed on 28(th) November, is an opportunity to accelerate
the growth of our internet operation, more than doubling its size,
and enhancing our position as the destination homewares retailer in
the UK, both online and offline.
Since the acquisition, the business has generated GBP8.1m of
revenue. We have invested around GBP6.2m in working capital and
paid GBP1m of the purchase consideration. The additional GBP7.5m
consideration is due at the end of January 2017. The business is
performing in line with our expectations and we will give a further
update in our interim report.
Financial Position
As at 31st December 2016, net debt was approximately GBP103m.
Daily average net debt across the half year amounted to GBP77.6m.
The movement in net debt reflects the investment in Worldstores,
higher capital expenditure on new stores and refits, as well as the
acquisition of two freehold properties.
Commenting on Dunelm's performance, John Browett, Chief
Executive, said:
"Following a difficult first quarter we have seen an improvement
in performance both in our stores and online. It was encouraging to
see customers respond well to our seasonal product lines,
especially our new Christmas offer. We have continued to outperform
the homewares market in what is a challenging and volatile retail
environment.
"We were pleased to complete the acquisition of Worldstores in
the quarter and remain excited by the opportunity it gives us to
accelerate the growth of our online proposition.
"We continue to focus on and invest in our key strategic
initiatives, which will improve the business over the medium term,
whilst ensuring we maintain our unique offer of tremendous value
for money, combined with an unrivalled range and great
service."
Ends
For further information please contact:
Dunelm Group plc 0116 2644439
John Browett, Chief Executive
Keith Down, Chief Financial
Officer
MHP Communications 020 3128 8100
John Olsen/Simon Hockridge/Gina dunelm@mhpc.com
Bell
Forthcoming Newsflow:
Dunelm's half year results announcement will be on 8th February
2017. The Q3 trading update will be on 7(th) April.
Notes
1. Like-for-like (LFL) sales represents revenues from stores
trading for at least one full financial year prior to 2(nd) July
2016 and excludes stores with significant change of space in the
current or previous financial year.
2. Quarterly sales and margin analysis (excluding Worldstores):
13 weeks to 31st December 2016
-------------- ------------------------------------------------------
Q1 Q2 H1 Q3 Q4 H2 FY
-------------- ---------- ---------- ---------- --- --- --- ---
Total sales GBP198.7m GBP253.8m GBP452.4m
-------------- ---------- ---------- ---------- --- --- --- ---
Total sales
growth -1.8% 3.3% 1.0%
-------------- ---------- ---------- ---------- --- --- --- ---
LFL sales
growth -3.8% 0.2% -1.6%
-------------- ---------- ---------- ---------- --- --- --- ---
Gross margin 0bps +10bps +5bps
growth*
-------------- ---------- ---------- ---------- --- --- --- ---
*estimated
13 weeks to 2(nd) January 2016
----------------- ----------------------------------------------------------------------------------
Q1 Q2 H1 Q3 Q4 H2 FY
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total sales GBP202.3m GBP245.7m GBP448.1m GBP229.0m GBP203.8m GBP432.8m GBP880.9m
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total sales
growth 12.0% 8.8% 10.3% 5.9% 1.8% 3.9% 7.1%
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
LFL sales
growth 5.5% 3.9% 4.6% 1.1% -0.6% 0.3% 2.5%
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross margin +20bps +30bps +30bps +90bps +80bps +90bps +60bps
growth/decline
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Notes to Editors
Dunelm is market leader in the GBP11bn UK homewares market. It
currently operates 161 stores, of which 157 are out-of-town
superstores and 4 are located on high streets, and an online store,
to be found at www.dunelm.com.
The company acquired the assets of Worldstores, including Achica
and Kiddicare, on the 28(th) November 2016. Worldstores is one of
the UK's largest online retailers of products for the home and
garden, with over 500,000 products on the site. Achica is a
members-only online store offering furniture, homewares and
accessories, often at significant discounts to RRPs for limited
periods through flash sales. Kiddicare is a multichannel retailer,
selling nursery supplies and merchandise for children and young
families.
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 Fogarty, 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 GBP1.6bn.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTSFEFWFFWSEFF
(END) Dow Jones Newswires
January 12, 2017 02:00 ET (07:00 GMT)
Dunelm (LSE:DNLM)
Historical Stock Chart
From Mar 2024 to May 2024
Dunelm (LSE:DNLM)
Historical Stock Chart
From May 2023 to May 2024
