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Dunelm Group PLC on Wednesday said that it had kept trading in line with market expectations for the full-year, despite conditions remaining challenging for the retail sector. The Leicester, England-based homeware retailer said revenue rose 4.5% to £872.5 million in the six months to December 30, from £835.0 million a year prior. Pretax profit was up 4.8% to £123.0 million from £117.4 million over the same period. Diluted earnings per share dropped to 44.6p from 45.8p. As of December 30, Dunelm had £6.2 million in net cash, down from £18.2 million in December, 2022. Net cash used in investing activities increased to £19.1 million from £12.3 million, as Dunelm said it was accelerating its rate of store openings and investing in the digitalisation of its total retail system. The company also launched the ‘home of homes’ brand platform in September, which also required a ‘significant’ brand marketing campaign. Dunelm achieved a gross margin of 53% in the period, up from 51%, and credits this to its ‘tight commercial grip and disciplined approach to promotional activity’. Inflationary pressures added £10 million to operating costs in the period, which increased to £333 million from £305 million last year. Both inflation and cost-of-living pressures have made consumers ‘increasingly savvy’ in choosing to spend their money on homeware, the company said. However, the company was able to grow its active customer base by 4.2% compared to last year. As a result of its confidence in the business, Dunelm has declared an interim dividend of 16p per share, ahead of last year’s 15p dividend. Further, the company declared a special dividend of 35p, down 13% from 40p a year prior. Looking ahead to the full year ending June 29, Dunelm said that it remains on track to deliver pretax profit in line with market expectations at £202 million. Chief Executive Officer Nick Wilkinson said: ‘Despite ongoing pressures on consumers, we are encouraged by the wide variety of new customers shopping with Dunelm, and existing shoppers also coming back more frequently. Alongside the positive sales performance we have delivered a very strong gross margin, which is testament to our tight operational control and the inherent strength of our business model.’ Shares in Dunelm were down 2.2% at 1,062.00 pence each in London on Wednesday morning. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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