Shares in Dunelm moved higher as investors warmed to news that budget homeware retailer is to pay a bumper 21.5p a share special dividend.
The £43m payout was unveiled as the group reported a blockbuster set of figures, albeit flattered by an uplift from the timing of its main winter sale - an additional eight winter sale days fell within the accounting period against just two last year. Like-for-like sales jumped 15.4 per cent, while costs climbed just 3 per cent across the same store base, which meant operating profits were 75 per cent higher at £45.9m.
Six new superstores were also opened, taking the total to 100, with five more planned in the second half as Dunelm targets a nationwide footprint of up to 200 stores. To cope with the rollout it's doubling its warehousing capacity in Stoke at a cost of £2m, and plans to build a new head office next year. Dunelm is already number three in a £11bn homewares market, but still only has a 4.6 per cent market share.
The group said that the first seven weeks of its second half are off to a good start, with sales up 9.1 per cent, although management is still concerned that consumer spending could weaken this year Broker UBS expects pre-tax profits of £71.9m and EPS of 25.3p this year (from £53.5m and 18.8p in 2009).
DUNELM GROUP (DNLM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 390p | MARKET VALUE: | £ 781.1m | |
| TOUCH: | 388-390p | 12-MONTH HIGH: | 438p | LOW: 153p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 69p | NET CASH: | £59.2m | |
| Half-year to 2 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 202 | 27.3 | 9.60 | 2.00 |
| 2010* | 254 | 46.2 | 16.1 | 3.00 |
| % change | +26 | +69 | +68 | +50 |
Ex-div:10 Mar Payment:01 Apr *Does not include proposed 21.5p a share special dividend | ||||
