Dunelm Group Predicts £108m Full-Year Profit

The shares of Dunelm (LSE: DNLM) climbed 11p to 960p during early trade this morning after the retailer predicted its forthcoming annual results would show a pre-tax profit of £108m.

The FTSE 250 member, which operates 135 stores and sells a wide range of home furnishings, said its sales had advanced 12% to £677m during the 52 weeks to 29 June.

The top-line increase was supported by 14 new stores and existing outlets experiencing a 1.7% like-for-like sales improvement.

Dunlem also said its gross margins had improved by 40 basis points during the year and by 80 basis points during the fourth quarter. The group’s net cash balance averaged £55m during April, May and June, too.

Nick Wharton, Dunelm’s chief executive, said:

With plans in place to develop further our compelling customer proposition, and with a significant opportunity for future growth from both new stores and multi-channel still in front of us, the Board remains confident in the overall prospects for the business.”

Prior to today, City experts were predicting Dunelm’s full-year results would show earnings up 13% to 40p per share and the dividend up 14% to 16p per share.

Such projections would put the shares on a P/E of 24 and income yield of 1.7%.

Of course, whether those ratings, today’s update, as well as the wider outlook for the home furnishings sector, all combine to make Dunelm a ‘buy’ is something only you can decide.

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> Maynard does not own any share mentioned in this article.