Along with these robust full-year figures, home furnishings group Dunelm (DNLM) also pleased investors with news of a special 25p a share dividend - to be paid next month from surplus cash.
Indeed, strong cash generation on the back of solid sales growth allowed management to both increase the final dividend and invest £26.5m in the company - yet Dunelm still ended the year with excess cash. Like-for-like sales grew 1.7 per cent in the period, although that was weaker than last year's 3.1 per cent growth, while disciplined inventory management and direct sourcing helped deliver a 40 basis point gross margin improvement to 48.7 per cent. Operating costs grew slightly ahead of sales, but this was largely down to an expansion of the store portfolio by 14 to 126 superstores. Meanwhile, multi-channel sales rose 80 per cent and now generate 4.5 per cent of group revenue.
What's more, Dunelm has overtaken John Lewis as the leader in the UK homewares sector, with a 6.9 per cent market share. Still, brand awareness remains relatively low so, to spread the news, Dunelm is investing £3m over the current financial in a television advertising campaign this autumn.
Broker Peel Hunt expects pre-tax profit of £126m for 2014, giving EPS of 47.1p.
| DUNELM (DNLM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 945p | MARKET VALUE: | £1.91bn | |
| TOUCH: | 940p-945p | 12-MONTH HIGH: | 1,054p | LOW: 576p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 97p | NET CASH: | £44.7m | |
| Year to 29 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 424 | 53.5 | 18.8 | 6.00 |
| 2010 | 492 | 76.8 | 27.1 | 8.00 |
| 2011 | 538 | 83.6 | 29.7 | 11.5 |
| 2012 | 604 | 96.3 | 35.3 | 14.0 |
| 2013 | 677 | 108 | 40.2 | 16.0 |
| % change | +12 | +12 | +14 | +14 |
Ex-div: 27 Nov Payment: 20 Dec | ||||
