The Group reported sales growth of 8.5% in "challenging and subdued Homewares and Furniture markets."
Companies: Dunelm Group plc
Dunelm (LON: DNLM) has seen its shares up 9% in morning trading with the release of its preliminary results for the year to July 2017.
Despite tough market conditions sales are up over 8%, but underlying PBT and EPS are both down c. 15%. EBITDA is also down 8%, reflecting the purchase of online furniture and home & garden retailer Worldstores in November.
The prelims come less than two weeks after the sudden announcement of Group CEO John Bowett's departure from the top job.
Singers note today regarding the Group's performance remains optimistic about the future of the DNLM...
"The acquisition and investment provide levers for growth despite the tougher backdrop. DNLM’s medium term plan is to double sales to £2bn (vs cons FY3 c£1.2bn)... A significant amount of infrastructure and investment work is now bedded in, which is a key factor behind better forward looking prospects vs historical growth, especially online."
Singers also said "now is a good entry point."
Chairman Andy Harrison is also positive, commenting on the Group's performance in Q1 of FY18...
"Sales in the first two months of the new financial year have started positively, with good LFL sales boosted by favourable weather comparatives. We expect to open a total of 8 new stores in the first half of the year of which 4 are already open. An encouraging start."
Dunelm currently trades at a PE ratio on par with the industry median of 12x, with a 4.5% yield. Share prices have fallen considerably since their peak in January 2016, trading around 670p today.
Despite this, revenue growth and operating margins have risen steadily, both hovering around 10% CAGR, with consensus predicting this average growth to continue into 2018 and beyond.
