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Management mash-up at Dunelm

It's all change at the top at home retailer Dunelm, but business as usual as far as the numbers are concerned.
September 11, 2015

It's management musical chairs over at Dunelm (DNLM). In June, the home retailer announced that Will Adderley, the founders' son who returned as chief executive following Nick Wharton's resignation last September, would make way for John Browett in January 2016. Mr Adderley will then revert to deputy chairman, while Andy Harrison of Whitbread (and previously easyJet ) fame has taken the reins as chairman from Geoff Cooper. Finally, Keith Down will join Dunelm as chief financial officer in December, having served four years in the same role at transport operator Go-Ahead (GOG).

IC TIP: Buy at 895p

But the board put on a "business as usual" front when reporting 2014-15 annual results. Last year, like-for-like sales rose 5.8 per cent on a 52-week basis. Impressively, this was thanks to both in-store like-for-like growth of 3.4 per cent and a 55 per cent surge in home delivery sales, suggesting the online business is not cannibalising shop sales, as is the case elsewhere in the sector. Despite rising levels of investment and a 30-basis point drop in gross margins, operating profits rose 4.6 per cent to £121m.

Analysts at Peel Hunt have nudged their pre-tax profit forecasts for the current financial year down 3 per cent to £130.5m, which would suggest EPS of about 50.3p (from £123m and 47.3p in FY 2015).

DUNELM (DNLM)
ORD PRICE:895pMARKET VALUE:£1.81bn
TOUCH:893.5-895p12-MONTH HIGH:970pLOW: 710p
DIVIDEND YIELD:2.4%*PE RATIO:19
NET ASSET VALUE:52pNET DEBT:71%

Year to 4 JulyTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201153983.629.711.5
201260496.235.314.0
201367710840.216.0
201473011644.020.0
2015**83612347.521.5*
% change+14+6+8+8

Ex-div: 15 Oct

Payment: 27 Nov

*Does not include special dividend of 70p a share paid in during the period

**53-week period