Dunelm's share price jumps as homeware chain declares special dividend

 
Kasmira Jefford
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Dunelm has set out eight targets to drive growth, including opening 50 more stores

Shares Dunelm have surged by as much as 10 per cent after the homeware chain posted a better-than-expected jump in first half profits and declared a £63.9m special dividend.

The retailer, which has 151 stores across the UK selling everything from curtains to bed and sofas, said pre-tax profits grew by 10.7 per cent to £75.5m for the six months to 2 January compared with £68.2m the same period last year.

Dunelm increased the interim dividend by 9.1 per cent to 6.p per share and also declared a special distribution of 31.5p per share on the back of the company's strong cash generation.

News of the dividend cheered investors after a disappointing trading update in January, when the retailer blamed the warm winter weather for disappointing second quarter sales and fewer visitors to its stores.

Under chief executive John Browett, the former Dixons Retail and Monsoon boss who took over the reins at the start of the year, Dunelm plans to open another 50 stores, improve underlying sales and grow its home delivery business over the next few years.

The company has set out eight detailed targets including expanding its presence in London and the south east, where it currently has eight stores. The other targets involve growing its made to measure service and improving it store formats as well as its supply chain.

Browett said: "Our focus remains on growing the business for the longer term. After making good progress so far, we are continuing to work towards our three part growth strategy and are now focused on eight core projects that will enable us to achieve this.

"This will allow us to improve our business substantially for our customers and, as we increase both our store network around London and our online presence, to develop Dunelm into a truly national homewares brand."

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