Soft furnishings retailer, Dunelm, reported impressive full-year growth. Like-for-like sales jumped 8 per cent year-on-year, while the gross profit margin rose 190 basis points to 46.8 per cent.
But the trading performance was overshadowed by news that chief executive Will Adderley is stepping aside to become executive deputy chairman. He’ll be replaced in December by Halfords’ current finance director, Nick Wharton. That has been greeted enthusiastically, with analysts praising Mr Wharton’s robust retail background. “We believe Nick Wharton, who has an outstanding track record at Halfords, will be a very able successor,” remarked analyst Freddie George of Seymour Pierce.
Indeed, Mr Wharton’s appointment is perceived as positive for the group’s expansion plans - Dunelm opened ten new superstores in the financial year, and a further two units since the period end. Longer-term, management wants to grow the existing 94 superstores to between 150 and 200. What’s more, even though each store opening requires roughly £1.2m of investment, Dunelm was still able to return £43.2m of surplus capital to shareholders in the period.
Seymour Pierce expects 2011 pre-tax profits of £82m and EPS of 28.4p (2010: £76.8m/26.9p).
| DUNELM (DNLM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 388p | MARKET VALUE: | £780m | |
| TOUCH: | 385-388p | 12-MONTH HIGH: | 435p | LOW: 278p |
| DIVIDEND YIELD: | 2.1%** | PE RATIO: | 14 | |
| NET ASSET VALUE: | 56p | NET CASH: | £15.4m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 315 | 38.0 | 13.1 | * |
| 2007 | 355 | 37.8 | 12.3 | 3.8 |
| 2008 | 392 | 49.1 | 16.8 | 5.5 |
| 2009 | 424 | 53.5 | 18.8 | 6.0 |
| 2010 | 493 | 76.8 | 27.1 | 8.0** |
| % change | +16 | +44 | +44 | +33 |
Ex-div:24 Nov Payment:10 Dec *Prior to listing **Excludes 21.5p per share special dividend | ||||
