Dunelm pulls final dividend as it forecasts a brighter 2021
Home furnishings retailer Dunelm has said it will not be issuing a final dividend this year, but said it had outperformed expectations despite the pandemic.
It added that it expects to pay an interim dividend next year, provided it faces no further hits from renewed lockdown measures.
Dunelm said today that profit before tax fell 13.3 per cent to £109.1m for the year to the end of June, after mandated store closures hurt its sales.
Full-year revenue dipped almost four per cent to £1.06bn, while its net cash position improved significantly to £45.4m from a negative £25.3m last year.
However July and August have so far provided strong trading figures, with sales up 59 per cent and 24 per cent respectively.
Digital sales represented 31 per cent of overall revenue, while it reported home delivery sales growth of 130 per cent compared to the same two months in 2019.
“We made good progress before the onset of Covid-19, building our digital capabilities, extending our product choice and value, and broadening and deepening our customer base,” said chief executive Nick Wilkinson.
“Whilst the year to date performance has been materially ahead of our initial expectations, it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns.
“However, we remain confident in our ability to adapt to the environment and are well positioned to continue to grow market share.”
The retailer also said it expects an increase of around £15m in operating costs this financial year, as it invests in growth plans.
Investor reaction to the results was mixed, with Dunelm’s share price edging down 0.55 per cent as markets opened this morning.
“The resilience of the Dunelm business model is evident from these results as the company emerges from the last six months in a stronger position to pursue its strategy,” said analysts at Shore Capital Markets in a note.
“Despite an uncertain consumer outlook we believe that Dunelm can continue to leverage its market leading position and continue to prosper, despite difficult economic conditions.”