Dunelm (DNLM) will not pay a final dividend this year, as coronavirus hit operating profit by almost a tenth to £116m in 2020. However, management has hinted at the prospect of an half-year dividend for 2021, as pent-up demand and a summer sale drove revenues up in July and August by 59 per cent and 24 per cent, respectively, compared to last year.
The national lockdown led to a 13 per cent drop in like-for-like stores growth, with social distancing measures costing the group £1.3m. But the blow was cushioned by a surge in online sales, which more than doubled in the final quarter alone. Gross margins held steady, nudging up to 0.7 per cent to 50.3 per cent.
Meanwhile, free cash flow grew to £175m, supported by around £80m worth of exceptional working capital benefits connected to Dunelm’s coronavirus response - although management noted that it expects this to mostly reverse in 2021.
Broker Peel Hunt forecasts adjusted pre-tax profits of £139.9m and EPS of 551.p in 2021, compared to £109.1m and 42.9p in 2020.
| DUNELM (DNLM) | ||||
| ORD PRICE: | 1,451p | MARKET VALUE: | £ 2.94bn | |
| TOUCH: | 1,448-1,451p | 12-MONTH HIGH: | 1,513p | LOW: 660p |
| DIVIDEND YIELD: | Nil | PE RATIO: | 33 | |
| NET ASSET VALUE: | 86p* | NET DEBT: | 155% | |
| Year to 27 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 0.88 | 129 | 50.5 | 25.1 |
| 2017 | 0.96 | 92 | 36.3 | 26.0 |
| 2018 | 1.05 | 93 | 36.3 | 26.5 |
| 2019 | 1.10 | 126 | 50.2 | 28.0 |
| 2020 | 1.06 | 109 | 43.4 | 0.0 |
| % change | -4 | -13 | -14 | - |
| Ex-div: | na | |||
| Payment: | na |
