Dunelm first half profits up 14.6%
Homewares retailer Dunelm has reported an increase in revenue and profit in the first half of its financial year as it continues to invest in new stores and its multi-channel business.
In the 26 weeks to 29 December 2012, pre-tax profit rose by 14.6% to £59.8 million while revenue climbed 13.4% to £340.1 million.
The retailer’s like-for like sales increased by 2.2% compared to a rise of 1.1% in the previous year. Gross margin was up 30 basis points to 49.5%
Dunelm said it had made good progress in the period despite a challenging consumer environment. The group opened 10 new stores in the half year and has committed to six further sites. Dunelm now operates 123 superstores as well as nine high street shops.
Sales from its multi-channel business from dunelm.com and dorma.com now represent approximately 4% of revenues. Since the retailer launched a mobile-optimised version of its website in early 2012, traffic from smartphones has grown and now accounts for 15% of online visits.
Chief executive Nick Wharton said: "Dunelm has continued to outperform the overall homewares market. We have made good strategic progress during the period, particularly supported by our work to improve customer service, the continued expansion of our store portfolio across the UK and the progress made in our on-line offering."
"The final quarter of our financial year presents some challenging like for like sales comparatives, but with a significant new store growth opportunity and an exciting multi-channel agenda in place, the board remains confident in the overall growth prospects for the business."
George Scott, Consultant at Conlumino, comments: "Dunelm has carried strong momentum into 2013, following a stellar 2012 that saw the retailer significantly outperform the wider UK homewares market. A compelling value proposition, backed by prudent financial management, has ultimately paved the way for a robust growth story and impressive market share gains against the backdrop of subdued consumer demand.
"The retailer is also gaining more traction at the more premium end of the market, benefiting from newer shop-in-shop design environments and the expansion of higher quality lines including Plum Circles and Waters & Noble.
"Looking ahead, Dunelm is leading the way in a market suffering from ongoing downward pressure. In chief executive Nick Wharton, they have a leader intent on driving sustainable growth, effectively reconciling the requirements for brand investment with shareholder prerogatives."
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