15 February 2023
Dunelm Group plc
Interim Results for the 26 weeks ended 31 December 2022
Strong performance and seizing the opportunity for sustainable growth
Dunelm Group plc (“Dunelm” or “the Group”), the UK’s leading homewares retailer, today announces its interim results for the 26 weeks to 31 December 2022.
| FY23 H1 | FY22 H1 | YoY | |
| Total sales | £835.0m | £795.6m | +5.0% |
| Gross margin | 51.1% | 52.8% | -170bps |
| Operating costs:sales ratio | 36.6% | 34.8% | +180bps |
| Profit before tax (PBT) | £117.4m | £140.8m | -16.6% |
| Digital % total sales1 | 34% | 33% | +1ppt |
| Free cash flow2 | £102.1m | £106.3m | -£4.2m |
| Net cash3 | £18.2m | £47.7m | -£29.5m |
| Diluted earnings per share | 45.8p | 55.4p | -17.3% |
| Ordinary dividend per share | 15p | 14p | +7.1% |
| Special dividend per share | 40p | 37p | n/a |
Highlights
· Strong sales growth of 5%, with total sales 43% higher than H1 FY20 (pre-pandemic), as we helped customers manage their household budgets
· Customers responded well to the Dunelm offer across our categories, with a significantly increased range on Dunelm.com, where we launched c.10,000 new SKUs
· 160bps market share gain in homewares and continued share gains in furniture4
· Active customers 5.7% higher than last year5, with 4.8% increase in shopping frequency6
· Three new stores opened, including one relocation
· Tripled our ‘Delivering Joy’ campaign, with over 60,000 Christmas gifts donated to local causes
Financial highlights
· Tight commercial discipline and operational grip delivered gross margin of 51.1%
· PBT of £117.4m, down on the prior year as expected, reflecting impact of Sale timing and strong post-pandemic demand in the prior year, and inflationary impacts
· £17m of investment in digitalisation, capability and capacity to support future growth opportunity
· Free cash flow of £102.1m, an excellent cash conversion of operating profit of 84%
· Interim dividend of 15p (FY22 H1: 14p), an increase of 7.1%
· Special dividend of 40p declared to return to target leverage range of 0.2× – 0.6× net debt:EBITDA7
Outlook and current trading
· Strong performance in the first half and a strong Winter Sale
· Whilst customers have been resilient to date, the consumer outlook remains unpredictable
· Our expectations for FY23 PBT remain unchanged8
Nick Wilkinson, Chief Executive Officer, commented:
“We are all learning to live in a new, complex and rapidly evolving economic reality. Recognising this, our focus has been on ensuring that we continue to offer outstanding value to our savvy customers through a proposition which is committed to quality, at the right price, across an expanding range of relevant products. We believe that this is why we have continued to grow our sales, customer numbers and market share.
“In this environment, agility, creativity and innovation are more important than ever and we have endeavoured to make every pound count, both for ourselves and for our customers, helping to mitigate the impact of inflation. While we do this, it is important that we also maintain our long-term thinking, invest for sustainable growth and continue to ensure we are in a position to seize the significant opportunities ahead of us.
“Much like during the pandemic, our customers, colleagues and the communities we operate in will remember how businesses behaved when times were tough, and we are confident that our approach of offering outstanding value and choice for all will enable us to – once again – emerge from this challenging period stronger than ever.”