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Dunelm reports full-year profits rise

Published: 11 September 2008
Home furnishings retailer sees pre-tax profits grow 19.8% and strengthens market share; upbeat on future prospects despite dip in like-for-like sales for last 10 weeks.
Dunelm Mill has reported a pre-tax rise in profits of 19.8% in its preliminary full-year results for the 52 weeks to June 28.

The home furnishings retailer improved performance from £41m to £49.1m as its 'Simply Value for Money' message struck a cord with homeowners in the challenging retail climate.
Sales for the year rose by 10.5% (2.5% on a like-for-like basis).

The directors described the financial year as an 'excellent' one for sales and profit growth and went on to outline opportunities – such as the acquisition of the Dorma brand, the ongoing expansion of the store portfolio and growing Dunelm Direct – as they seek to strengthen the Dunelm brand and grow market share.

The good news was tempered with results for the 10 weeks to September 6, which showed total sales growth of 3% but a like-for-like dip of 6%.


However, Dunelm says cash stores are healthy as it reduced net debt during the period.

It has begun a store refit programme (three so far this year with a target of 5-10 per year), and continues to open new superstores (eight opened in the year).

"We have opened a further store since the year end, in Huddersfield, and are contractually committed to six more units which are due to open this financial year or early next," chief executive Will Adderley said, adding: "We believe that we are well positioned to achieve a solid pipeline of openings in the next few years."

The acquisition of the worldwide rights for bed linen brand, Dorma, for £5m is seen as an opportunity to provide a point of difference while its webstore has been expanded to incorporate more than 9,000 products.
Dunelm is investing in new software to improve the online shopping experience.

In his statement chairman Geoff Cooper said he recognised difficult times ahead and tough comparatives for the group, but believes Dunelm can prosper at the expense of weaker competitors.

He said: "We continue to have great faith in our 'simply value for money' proposition and we expect customers to become increasingly aware of the value we offer."


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