# Dunelm Group plc Customer focus drives strong growth and shareholder returns

- Link: https://www.directorstalkinterviews.com/dunelm-group-plc-customer-focus-drives-strong-growth-and-shareholder-returns/412791945
- Published: 2019-09-04T07:19:31+01:00
- Author: Giles Arbor

**Dunelm Group plc** (LON: DNLM), the UK’s leading homewares retailer, today announced
its preliminary results for the 52 weeks to 29 June 2019.

|   | Year ended           29 June 2019   | Year ended           30 June 2018 Underlying^(1) | Year ended           30 June 2018 Exceptional items | Year ended 30 June 2018  Reported |  Year on year change   Underlying | Year on year change  Reported | 
| Total revenue | £1,100.4m | £1,050.1m | – | £1,050.1m | +4.8% | +4.8% | 
| Gross margin | 49.6% | 48.0% | – | 48.0% | +160bps | +160bps | 
| Profit before tax | £125.9m | £102.0m | (£8.9m) | £93.1m | +23.4% | +35.2% | 
|   |   |   |   |   |   |   | 
| Free cash flow^(2) | £154.4m | – | – | £52.9m | – | +191.9% | 
| Net debt^(3) | (£25.3m) | – | – | (£124.0m) | – | £98.7m | 
|   |   |   |   |   |   |   | 
| Basic EPS | 50.2p | 40.1p | – | 36.3p | +25.2% | +38.3% | 
| Diluted EPS | 49.9p | 40.0p | – | 36.2p | +24.8% | +37.8% | 
| Ordinary dividend | 28.0p | – | – | 26.5p | – | +5.7% | 
| Special dividend | 32.0p | – | – | – | – | – |

**Highlights**

· Total like-for-like (“LFL”) sales increased by 10.7% with strong growth both in
stores (7.7%) and dunelm.com (35.1%)

· Focus on core Dunelm, with improved customer proposition offering more choice,
style and value

· Continuing growth in brand awareness and consideration helped drive an 8.5% increase
in unique active customers4

· Ongoing development of digital capabilities with further plans in progress to 
enhance the multichannel customer experience

· Increased homewares market share5 by 0.6ppts

· Profit before tax of £125.9m up 23.4% (vs FY18 underlying profit before tax), 
reflecting higher sales, improved gross margins (+160bps) and better operational
grip

· Excellent cash flow generation: Free cash flow of £154.4m (+£101.5m vs FY18) and
a significant reduction in net debt to £25.3m (FY18: £124.0m)

· Final dividend of 20.5p brings the full year ordinary dividend to 28.0p, growth
of 5.7%

· Special dividend of 32.0p, bringing total shareholder dividend for the year to
60.0p

**Nick Wilkinson, Dunelm Group plc Chief Executive Officer, commented:**

> “As Dunelm celebrates its 40th anniversary, we are pleased to have delivered a
> strong performance during the year, with an improvement across all our customer,
> operating and financial metrics. In particular, the strong like-for-like revenue
> growth, both in stores and online, demonstrates the progress we are making with
> our multichannel proposition whilst maintaining the breadth and depth of our specialist
> customer offer in homewares.
> “These results reflect our focus on the core Dunelm business and we see further
> opportunities to develop our Customer 1st plans, through extending product choice
> and value, improving our customer experience enabled by technology, and bringing
> more people to the brand.
> “Recent trading performance has continued to be strong, reflecting both weak comparatives
> in the prior year and continued market share growth. However, we remain cautious
> about the full year outlook due to increased Brexit uncertainty and specifically
> the impact it may have on consumer spending as we enter our peak period.
> “Looking to the future, I am excited about the opportunity to grow our business
> as we enhance and extend our specialist and multichannel offer, build on our market
> leading position and fulfil our purpose of helping everyone create a home they
> love.”

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