23 May 2024, 05:00
By Furniture News Mar 09, 2017

Dreams announces record 2016 results

Dreams, a leading UK specialist bed retailer, has announced its unaudited results for the 52 weeks to 24 December 2016.

Financial highlights

  • Sales up 20% to £280m (FY15: £234m)
  • Like-for-like sales growth of 14.1%
  • Underlying pre-exceptional EBITDA up 87% to £40m (FY15: £21.3m)
  • EBITDA Margin of 14.4% (FY15: 9.3%)
  • Profit before tax up 136% to £32m (FY15: 13.5m)
  • Strong cash flow generation of 77%
  • Initial £53m capital investment from Sun Capital now repaid in full

Operational highlights

Dreams continues to make progress across all of its strategic initiatives:

Store estates

  • 14 new stores opened in the period, including three relocations, taking total to 181
  • 10 stores refurbished in the period meaning that every Dreams store has been refreshed and refurbished to our successful “Comfort by Colour” format

Product

  • Continued refreshment and investment in product lines, technology and ranges
  • Successful launch of Hyde & Sleep “bed in a box” mattress
  • Successful launch of M Line Orthopaedic mattress range in conjunction with Victoria Pendleton, Joe Root and Billy Vunipola

E-commerce

  • Investment in digital offer resulting in 16.7m website visits in the period
  • E-commerce sales up 34%
  • Sleep matters app launched in May providing customers with sleep analysis and recommendations

Factory and distribution 

  • Over £1m investment into the Dreams Bed Factory, based in Oldbury, has provided latest machinery and enhanced quality testing facilities.
  • Completed replacement of all 130 delivery vans and investment in drivers to deliver better customer service

People

  • Investment in all staff, structured training programmes introduced
  • Implementation of Pillow Talk survey to monitor customer feedback, customer satisfaction levels at 94%

Brand and marketing 

  • Completion of new brand rolled out across the estate, factory, distribution network and head office
  • Re-launch of “Replace Every 8” campaign to educate consumers on mattress replacement cycle initially introduced in 2015
  • Awarded “most recommended bed company” by Trustpilot, with a rating of 9.4
  • Recognised by Superbrands in 2017 as one of the UK’s strongest brands

Current trading and outlook

Dreams has had a strong start to the year and is currently well-positioned to take advantage of further growth opportunities.

The company will launch a new store concept later this year as part of the drive to continually evolve and improve the shopping experience for customers. A new digital store format will also be launched later this year.

Mike Logue, CEO of Dreams, says: “2016 was a pivotal year for Dreams, building on the last three years of growth. Our significant investment, matched by the incredible efforts of our 1,850 colleagues across the UK in our factory, our 181 shops and our delivery centres have enabled us to achieve these record results.

“We attribute this performance to our continued determination to make, sell and deliver the most comfortable beds, provide market leading quality, value and choice and to always put our customers first. I want to thank everyone at Dreams for their passion, hard work and dedication over the year.

“Whilst potential future challenges to the UK consumer economy are well documented, we are confident that we will continue to successfully execute our strategy and that it will be another year of significant progress for Dreams.”

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