Coronavirus Update

Dunelm Group Plc - Issue Final Results

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Dunelm Group plc

Preliminary Results for the 52 weeks ended 27 June 2020

Emerging stronger and accelerating our transition

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares retailer, today announces its preliminary results for the 52 weeks to 27 June 2020.

 

FY20

FY19

YoY

Total sales

£1,057.9m

£1,100.4m

(3.9%)

Gross margin

50.3%

49.6%

+70bps

Profit before tax (PBT) 1

£109.1m

£125.9m

(13.3%)

 

 

 

 

Digital % total sales2

27.0%

19.6%

+740bps

 

 

 

 

Free cash flow 3

£174.7m

£152.8m

+£21.9m

Net cash/(debt) 4

£45.4m

£(25.3)m

+£70.7m

 

 

 

 

Diluted earnings per share

42.9p

49.9p

(14.0%)

Strong performance in an unprecedented environment

  • Response to the crisis highlighted the resilience of our business model, the strength of our balance sheet, the importance of our shared values and our digitally enabled Customer 1st strategy, allowing us to innovate at pace
  • Total sales increased in the eight months to February by 6.8%, supported by an 8.8% increase in rolling 12-month unique active customer numbers 5
  • Online (home delivery) sales grew 105.6% in the fourth quarter
  • Gross margin of 50.3% up 70 bps year on year, with gains from sourcing initiatives partially offset by increased clearance activity following the store closure period
  • Full year reduction in PBT reflects impact of Covid-19 and the store closure period
  • Free cash flow generation of £174.7m, including c.£80m of exceptional working capital benefits related to our response to Covid-19, which are expected to largely reverse in FY21
  • Robust balance sheet with year-end net cash of £45.4m, access to £175m of approved banking facilities, and confirmed Covid-19 Corporate Financing Facility ("CCFF") eligibility
  • With our stores re-opened, we have not made claims under the Job Retention Scheme (JRS) in FY21 and will not claim the "JRS Bonus"

Well positioned in a resilient homewares market, despite ongoing uncertainty

  • Strong recent trading with total year on year sales growth of 59% in July and 24% in August, partly as a result of pent up demand and the timing of our Summer Sale and reflecting a resilient homewares market
  • For the first two months of FY21 store footfall has been positive and digital sales were 31% of total sales, with online (home delivery) sales growth of c.130% compared to the prior year
  • It is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns
  • Our prudent financial approach has served us well during the Covid-19 crisis. The combination of this approach and the highly uncertain outlook means the Board is not recommending a final dividend for FY20, in order to retain maximum liquidity ahead of winter peak trading
  • Assuming no further material impact from Covid-19, the Board anticipates that it will declare an interim dividend in FY21 and return to our published capital policies

Nick Wilkinson, Chief Executive Officer, commented:

"We made good progress before the onset of Covid-19, building our digital capabilities, extending our product choice and value, and broadening and deepening our customer base.

"These unprecedented times have confirmed the strength of the Dunelm business model, with our integrated online and out-of-town stores proposition, broad product range, long-term supplier relationships, strong cash generation and operational grip. Our colleagues have been an inspiration throughout, living our shared values, and I would like to thank them all for their adaptability and resilience.

"These recent months have taught us about our ability to innovate at pace and we are emerging stronger as a result, giving us the confidence to accelerate our strategic priorities, all of which focus on being Customer 1st.

"Growth in the first two months of the new financial year has been significantly ahead of our expectations, reflecting both pent up demand following the store closure period and a resilient homewares market. Our customers have adapted quickly to shopping safely in our mainly out-of-town superstores and we continue to see strong growth in our home delivery offer.

"Whilst the year to date performance has been materially ahead of our initial expectations, it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns. However, we remain confident in our ability to adapt to the environment and are well positioned to continue to grow market share and help even more customers create a home they love."