Dunelm has delivered an update on trading for its final quarter and for the financial year ending 4th July 2015, and has announced that Keith Down, currently CFO of The Go-Ahead Group plc, will succeed David Stead as CFO in December.
Sales growth remained strong in Dunelm's final quarter. Total sales grew by 12.1% to £200.1m, with like-for-like sales growth (combining stores and home delivery) of 5.8%. In-store like-for-like sales grew by 3.5%, benefiting from a strong summer sale performance, and continued growth in particular from Dunelm's Made to Measure curtains and blinds service and from its furniture department.
Home Delivery sales grew by 43.4% during the quarter and represented 6.8% of sales, compared to 5.4% in the prior year. Over the financial year as a whole, Home Delivery sales represented 6.1% of total sales – up from 4.4% the previous year.
Non-like-for-like store performance included sales from four new stores opened in the quarter, taking the total openings in the financial year to 12, including one relocation. Dunelm ended the financial year with 148 superstores, compared with its medium-term target of 200.
Total sales for the financial period of 53 weeks to 4th July 2015 were £835.8m. Given the strong trading performance in the final quarter together with increased levels of revenue investment during the year, Dunelm's board anticipates that profit before tax for the 52 weeks ending 27th June 2015 will be within the range of £119 -123m, and, for the 53 weeks ending 4th July 2015, within the range of £121-125m.
Dunelm's pipeline of legally-committed new store opportunities stands at eight, of which at least two are expected to open in the first half of the new financial year. The pipeline includes one committed freehold acquisition which is conditional on planning consent.
Finally, Dunelm's new web platform went live for customers on 1st July.
Will Adderley, chief executive, comments: "We have continued to achieve good like-for-like growth in the final quarter of our financial year, across physical stores as well as our home delivery channel. With a newly strengthened senior team, a recently upgraded website, a sound pipeline of new stores and an ongoing programme of capital and revenue investments in place, I am confident that we will continue to deliver further growth across all our channels going forward."
Keith Down's appointment will see current CFO David Stead retire after a short handover period, having served on the board since 2003. Keith qualified as a chartered accountant with KPMG, and held a number of senior finance roles in convenience retailing and at Tesco Plc, where he was commercial finance director from 2005 to 2007. He was then appointed CFO of JD Wetherspoon Plc, before joining Go-Ahead in 2011. Keith is a non-executive director at Topps Tiles Plc.
Andy Harrison, chairman of Dunelm, says: "Keith brings us a wealth of experience of financial management in retail and other consumer-facing industries. His drive, experience and character will make a significant contribution to our growth, and will provide high quality support to John Browett who, as recently announced, will assume the role of CEO in January 2016 and who has been fully involved in Keith's appointment."
Ken Odeluga, a senior market analyst at www.cityindex.co.uk, comments: "The main news is continuing development of Dunelm’s management team revamp. A new CFO has been announced today, to go with the new CEO designate announced toward the end of June, who will formerly take up his post in January 2016. A former non-exec director took over as chairman yesterday and a number of further exec and non-exec placements are in the works.
"Busy C-Suite personnel activity follows the surprise exit of CEO Nick Wharton in September, to be replaced on an interim basis by a founding family member, Will Adderley (he and other relatives own 54%). The group remains ambitious and has been bolstering its board with management of impressive credentials. At the same time, we note the rate of store openings has declined from 14 in 2012 to just nine last year.
"An expansion push, which seems to be almost ready to roll-out, may offset worries about family influence, especially given Dunelm's ‘low-cost’ focus. The stock’s loss of 10% over the last month signals that investors require both evidence of expansion and profit growth (which is to hand) as the conditions for toleration of tight ownership."
