DJ Dunelm Group plc Year-end Trading Update
Total revenue for the fourth quarter grew by 1.8% to GBP203.8m. Total like-for-like (LFL) growth (combining LFL stores and Home Delivery) decreased by 0.6%, although this was adversely impacted by a combination of an earlier Easter and the fact that the previous financial year included a 53(rd) week. Adjusting for these calendar impacts, underlying LFL performance was +2.9% for the 13 weeks to 2(nd) July 2016.
13 weeks to 2nd July 2016 52 weeks to 2nd July 2016
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Sales YoY Growth YoY Growth Sales YoY Growth YoY Growth
(GBPm) (GBPm) (%) (GBPm) (GBPm) (%)
LFL stores 165.1 -3.4 -2.0% 729.0 7.4 1.0%
Home Delivery 16.0 2.3 16.8% 61.9 11.7 23.2%
Total LFL 181.1 -1.1 -0.6% 790.9 19.1 2.5%
Non-LFL stores 22.7 4.8 90.0 39.1
Total 203.8 3.7 1.8% 880.9 58.2 7.1%
The difference between reported and underlying LFL, predominantly relating to the impact of the 53(rd) week in the prior year, can be summarised for the year as follows:
Q1 Q2 Q3 Q4 FY
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Reported LFL 5.5% 3.9% 1.1% -0.6% 2.5%
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Underlying LFL 3.9% -0.8% 5.1% 2.9% 2.5%
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Variance 1.6% 4.7% -4.0% -3.5% 0.0%
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Final Quarter Underlying performance
Sales performance in the quarter reflected:
A good Easter performance helped by being earlier in the calendar;
Volatile trading through the quarter driven by changeable weather conditions and a general retail slow-down prior to the EU referendum; and
Continuing good growth in the on-line business, including a 16.8% increase in home delivery sales.
Gross Margin Percentage
Gross margin for the quarter was approximately 80bps higher than the comparator period, largely due to improved stock management and end of season product clearance. Our expectation is that gross margin for the full financial year will be approximately 60bps ahead of the prior year.
Store Portfolio
The total number of superstores trading at the period end was 152. We opened two more new stores, in Nottingham and Sheffield, in the final quarter, both replacing existing stores (relocations). This took our total new store openings for the financial year to six, leaving the year-end superstore count at 152. We are currently committed to a further seven new store openings, including one in London, which are likely to take place in the next financial year.
Overall Financial Performance
We anticipate that profit before tax for the 52 weeks ended 2(nd) July 2016 will be in line with market expectations.
The group remains strongly cash generative. After payment of ordinary and special dividends, totalling GBP108m in the last 12 months, our net debt at the year-end is expected to be in the region of GBP80m.
Commenting on Dunelm’s performance, John Browett, Chief Executive, said:
“I am pleased to report another solid quarter of underlying growth, particularly given the more difficult retail trading environment which we believe has seen the Homewares market decline in the quarter. Overall, therefore, we are continuing to increase our share of that market through our focus on delivering everyday value and excellent service for customers.
“The current uncertainty makes the future trajectory of the economy and consumer confidence unclear; however, we are confident that Dunelm, as market leader, will continue to strengthen its position through its low cost operating model, everyday value, consistent cash generation and strong balance sheet.
“We remain focused on delivering key projects across the business and are excited about substantially improving the business for our customers, both in store and online, over the medium term, and continuing to develop Dunelm into a truly national homewares brand.”