Will Adderley marked his move back into the chief executive's seat at Dunelm (DNLM) by unveiling like-for-like sales growth of 6.2 per cent, another special dividend and an ambitious expansion plan. Having overseen the home retailer's flotation in 2006, the founder's son became executive deputy chairman in 2011, only to return to the front line following Nick Wharton's resignation last September.
His plan to add about 60 new superstores, widen the product range and expand Dunelm's budding online platform set pulses racing in the Square Mile. Mr Adderley reckons the strategy will enable the group to boost sales by a half in the medium term. A 76 per cent jump in online sales shows early evidence of the potential. Mr Adderley is particularly keen to exploit the trend towards bulky furniture being ordered online.
Continued investment in new stores, advertising and warehousing facilities to support higher levels of stock (particularly furniture) pushed up operating costs by 17 per cent year on year. But that didn’t stop management proposing a special dividend of 70p a share. So long as there is strong cash generation, investors will be rewarded, Mr Adderley says.
For the full year, broker Peel Hunt expects adjusted pre-tax profits of £125m and EPS of 47.5p, up from 43.7p.
| DUNELM GROUP (DNLM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 900p | MARKET VALUE: | £1.83bn | |
| TOUCH: | 899-901p | 12-MONTH HIGH: | 1,045p | LOW: 748p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 107p | NET CASH: | £38.3m | |
| Half-year to 27 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 356 | 61.6 | 23.3 | 5.0* |
| 2014 | 406 | 68.2 | 26.5 | 5.5** |
| % change | +14 | +11 | +14 | +10 |
Ex-div: 19 Mar Payment: 10 Apr *Excludes a special dividend of 25p paid in October **Excludes a proposed special dividend of 70p a share | ||||
