Dunelm Group Plc Reiterates Expansion Plans As Sales Grow

Homeware retailer Dunelm Group plc (LON:DNLM) reports return to like-for-like sales growth in second quarter.

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The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The shares of Dunelm (LSE: DNLM) recovered from a 7% decline in early London trade this morning after the home furnishing retailer announced a 5% increase in total sales in the second half of 2013.

Dunelm, which operates under the Dunelm Mill brand of shops, enjoyed a return to like-for-like sales growth of 2.9% in the most recent quarter. The company ended the year with 131 superstores and almost £44m in cash.

The FTSE 250 retail group reiterated its plans to expand to 200 UK stores in the medium term. In a statement, Dunelm chief executive Nick Wharton said:

“Dunelm traded robustly during this key period with our trusted “every day low price” positioning retaining a strong appeal for customers. Our home delivery proposition has become much stronger as a result of our new fulfilment centre, and we are beginning to see the benefits from our increased advertising investment to drive brand awareness.”

He went on to add that he expects Dunelm to report pre-tax profits of more than £61m for the second half of 2013. With a market cap of £1.9bn, Dunelm is valued at 20 times its forward earnings, and offers a prospective dividend yield of 2%.

Of course, whether Dunelm shares still offer good value today is for you to decide.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

> Mark owns no shares mentioned in this article.

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