Dunelm Group plc First Quarter Trading Update (8078L)

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RNS Number : 8078L

Dunelm Group plc

06 October 2016

6(th) October 2016

First Quarter Trading Update

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares retailer, reports the following trading update for the first quarter of its current financial year, comprising the 13 week period ended 1(st) October 2016.

Revenue

Total revenue for the first quarter fell by 1.8% to GBP198.7m. Total like-for-like (LFL) growth (combining LFL stores and Home Delivery) decreased by 3.8%.

As expected, unusually warm weather had a dampening effect on store footfall. We did however, continue to see good growth in the online business, including a 17.9% increase in home delivery sales. Overall, we believe that we are continuing to outperform the homewares market as a whole.

 
                            13 weeks to 1(nd)                   13 weeks to 3(rd) 
                               October 2016                        October 2015 
-----------------  ----------------------------------  ---------------------------------- 
                     Sales    YoY Growth   YoY Growth    Sales    YoY Growth   YoY Growth 
                     (GBPm)     (GBPm)         (%)       (GBPm)     (GBPm)         (%) 
-----------------  --------  -----------  -----------  --------  -----------  ----------- 
                                              -5.1 
  LFL stores         173.9       -9.4           %        171.8       7.2         +4.4% 
-----------------  --------  -----------  -----------  --------  -----------  ----------- 
  Home Delivery      13.6        +2.1        +17.9%      11.5        2.4         +25.9% 
-----------------  --------  -----------  -----------  --------  -----------  ----------- 
  Total LFL          187.5       -7.3        -3.8%       183.3       9.6         +5.5% 
-----------------  --------  -----------  -----------  --------  -----------  ----------- 
  Non-LFL stores     11.2        +3.6          -         19.0        12.1          - 
-----------------  --------  -----------  -----------  --------  -----------  ----------- 
  Total              198.7       -3.7        -1.8%       202.3       21.7        +12.0% 
-----------------  --------  -----------  -----------  --------  -----------  ----------- 
 

Gross Margin Percentage

Gross margin is estimated to be broadly flat when compared to the equivalent quarter last year. As yet we have not seen any material impact from adverse foreign exchange markets in relation to goods sourced directly or from third parties.

Store Portfolio

No new stores were opened in the period leaving our superstore footprint at 152 stores. We are now legally committed to ten new stores of which nine are due to open in the current financial year and four before the end of the calendar year. The current year 15 store refit programme has also commenced with three stores due to have been completed before the end of the calendar year.

Financial Position

As at 1(st) October 2016, net debt was approximately GBP83m. Daily average net debt across the period amounted to GBP76.5m.

Commenting on Dunelm's performance, John Browett, Chief Executive, said:

"As expected, the homewares market has fallen due to unusually warm weather and this has correspondingly impacted our store performance over the period given the reduced footfall to our out-of-town superstores. However, we have continued to focus on our value based customer proposition and are increasing our market share in homewares, whilst also seeing good growth in our online business.

"We are looking forward to a stronger second quarter as we continue to invest in extra seasonal space, new till systems, store refits and new store openings. We should also benefit from weaker comparatives.

"We continue to focus on our key initiatives 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    [e-mail] 
  Bell 
 
 

Forthcoming News flow:

Dunelm's next scheduled trading update will be on 12th January 2017 followed by the half year preliminary results announcement on 8th February 2017.

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: 
 
                       13 weeks to 1st October 2016 
--------------  ----------------------------------------- 
                     Q1       Q2   H1   Q3   Q4   H2   FY 
--------------  -----------  ---  ---  ---  ---  ---  --- 
 
 Total sales     GBP198.7m 
--------------  -----------  ---  ---  ---  ---  ---  --- 
 
 Total sales 
  growth           -1.8% 
--------------  -----------  ---  ---  ---  ---  ---  --- 
   LFL sales 
    growth         -3.8% 
--------------  -----------  ---  ---  ---  ---  ---  --- 
 
 Gross margin       0bps 
  growth* 
--------------  -----------  ---  ---  ---  ---  ---  --- 
 

*estimated

 
                                             13 weeks to 3(rd) October 2015 
-----------------  ---------------------------------------------------------------------------------- 
                       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. The Group currently operates 157 stores, of which 152 are out-of-town superstores and 5 are located on high streets, and an on-line store, to be found at www.dunelm.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 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 GBP1.73bn.

This information is provided by RNS

The company news service from the London Stock Exchange

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October 06, 2016 02:00 ET (06:00 GMT)