Dunelm Group - Appealing offer

Dunelm Group’s (DNLM’s) H124 results demonstrated the benefits of its strategy of broadening its addressable market by strengthening the core offer and expanding into newer categories, while also growing the store base and marketing more effectively. This is driving growth in the active customer base, who shop with greater frequency, leading to further market share gains in a static market. The broadening appeal of its products is demonstrated by growth being broad-based by geography, customer a

Initial Equity Trading Comments - 19 February 2024

Good progress already reflected in price

Dunelm has reported total sales growth of 6.2% and LFL of 5.0% for 2Q, comprising in-store LFL of 1.2% and online LFL of 32%. This compares with 2Q 2018/19 in-store and online LFLs of +5.7% and +37.9%. It has also reported Gross Margin up by 110bps against +190bps in the corresponding quarter.

Opportunity knocks

We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrate

Morning Song

Dunelm Group (DNLM LN) Positive performance puts paid to previous problems – shares to rise | Liontrust Asset Management (LIO LN) Good flows but uncertainty prompts caution | N Brown Group (BWNG LN) Unchanged FY EPS but Product sales weak. FCF/DPS hit by more PPI | Renold (RNO LN) H1 trading in line, FY19 expectations reiterated

Dunelm Group - Getting the house in order

Dunelm’s new CEO is taking steps to address recent underperformance and build the core brand. These include closing or selling the loss-making Worldstores (WS) businesses; developing a new web platform and introduction of ‘click and collect’; and launching a marketing campaign to raise the brand profile and acquire new customers. Assuming plans are executed successfully, we see upside to consensus forecasts.

Morning Song

Advanced Medical Solutions (AMS LN) Interims mixed | Dunelm Group (DNLM LN) Positive strategic update and multi-channel progress report | Findel (FDL LN) Positive take-aways from Xmas press show | Goals Soccer Centres (GOAL LN) Overcoming H1 setbacks to start H2 strongly | Medica Group (MGP LN) Buying opportunity in structural growth market leader | ReNeuron Group (RENE LN) AGM update highlights development progress & licensing discussions | Ten Entertainment Group (TEG LN) Resilient H1 with pos

Morning Song

Dunelm Group (DNLM LN) Resilient Q4 sales but heatwave means higher Sale stock (4% d/grade) | Liontrust Asset Management (LIO LN) FuM +9% in Q1, forecasts unchanged | Mobile Streams (MOS LN) Full year update | ReNeuron Group (RENE LN) In-line FY results highlight hRPC deal & upcoming Phase III start in Stroke | Xaar (XAR LN) Joint investment with Stratasys in newly formed Xaar 3D Ltd

Kiddicare - competitor closures and sales transfer

After an unscheduled warning in May, guidance prudently baked in a continuation of weak end-market demand and consensus EPS reduced by 7%/9% in FY18/FY19 respectively. It would be premature to say this was purely weather-led, but John Lewis weekly data certainly supports this argument. Either way, tough conditions are forcing capacity out of what is still a highly fragmented market with share up for grabs. Mothercare’s downsizing highlights this and Dunelm’s ambitions for Kiddicare are likely to