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07 Jan 2019 | 07:24

Dunelm Group sees profits 'modestly' ahead of market expectations

Homewares retailer Dunelm Group on Monday expressed caution over its full-year outlook owing to 'unprecedented levels' uncertainty, but said pre-tax profits would be 'modestly' ahead of market expectations should the pace of growth seen in the first half continue. 'If the homewares market continues to grow at a similar rate to that experienced in the first half, we expect to deliver full year PBT modestly ahead of the top of the range of current analysts' forecasts,' the company said. The company did, however, express caution over its full-year outlook, citing unprecedented levels of uncertainty currently facing consumers and businesses in the UK, despite total sales growing 9.6% during the second quarter. For the 13-week period ended 29 December, the total like-for-like revenue grew 9.0%, while like-for-like store revenue increased by 5.7% from a year earlier.

The uptick in sales was supported by 'strong' online revenue growth of 37.9%, and gross margin improved as lower margin sales from the Worldstores businesses ended.

The company said it estimated gross margin had increased by approximately 190 basis points at the Group level compared with the second quarter last year. While gross margins grew 120 basis points at Dunelm.

Profit before tax in the first half of the year was estimated to be about £70m after taking an impairment charge of £3.8m in relation to the Fogarty brand the company said. That would be mark an improvement on the £60.0m before exceptional costs reported a year earlier. 'The positive like-for-like revenue growth both in stores and online, highlights the strength of our customer offer. Our multichannel proposition is improving all the time, and we are looking forward to introducing our new web platform in the summer, using more flexible technology which will allow us to better serve our customers in a changing retail landscape,' said Nick Wilkinson, Dunelm's Chief Executive. 'Despite our strong performance in the year to date, we remain cautious on the outlook for the second half given the ongoing uncertainty in the UK economy. However, in the medium term, we see significant opportunity to grow the business by focusing on our customers and seizing opportunities in a digital world.'

Story provided by StockMarketWire.com
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