Wednesday 12 February 2020 7:21 am

Dunelm posts higher profits as like-for-like sales rise

Profit jumped at furnishings firm Dunelm in the first half of its latest financial year, it said today, as like-for-like sales also improved.

The figures

Profit before tax leapt 19.4 per cent year on year to £83.6m as revenue rose six per cent to £585m. Like-for-like sales climbed 5.6 per cent.

However, free cash flow dropped 29.4 per cent from the same period a year ago to £91.2m. Dunelm trimmed net debt by seven per cent to £67.7m.

Basic earnings per share leapt 21.4 per cent to 33.5p while Dunelm posted an interim dividend of 8p per share, almost seven per cent up from this time last year.

Why it’s interesting

Dunelm delivered on Christmas guidance for higher sales after posting solid numbers last September too. The home furniture business has enjoyed a robust performance despite the struggles of many other retailers.

Today Dunelm also said it has seen “no material hit” from coronavirus to its supply chain. CEO Nick Wilkinson added: “e are monitoring the coronavirus outbreak carefully.”

What Dunelm said

Chief executive Nick Wilkinson said:

We have made good progress over the first half, following a strong performance last year, which is reflected in the significant growth delivered in both sales and profits.

We continue to build strong foundations for future growth. The successful launch of our digital platform accelerates our ability to innovate our customer proposition and we remain focused on operational improvements across all areas of the business.

We also continue to broaden our customer base and following the successful sponsorship of ITV’s This Morning, which concludes in March, we are excited about our new sponsorship deal with Channel 4’s First Dates programme, starting later this week, which will enable us to reach more customers with the Dunelm brand.  

The third quarter has started well, with a successful winter sale across the total retail system. As a result, we expect full year FY20 profit before tax to be slightly ahead of the top of the latest range of analyst expectations. We are monitoring the coronavirus outbreak carefully. To date we have not assumed any material disruption to our supply chain or any financial impact in the year.

We have plenty to look forward to over the remainder of the year as we strengthen the Dunelm offer and help more customers to create the home they love.