Preliminary Q4 2024 Dunelm Group PLC Earnings Call Transcript
Key Points
- Dunelm Group PLC (DNLMY) reported a 4.1% increase in full-year sales to GBP1.7 billion, driven by volume growth exceeding 6%.
- The company achieved a gross margin of 51.8%, up 170 basis points year-on-year, benefiting from lower freight costs.
- Profit before tax reached GBP205 million, a 6.6% increase from the previous year, and at the top end of forecasts.
- Active customer numbers grew by 5.1%, with broad-based growth across geography, age group, and income levels.
- Dunelm Group PLC (DNLMY) increased its market share in homewares and furniture to 7.7%, representing an outperformance of around 8 percentage points in a declining market.
- The company's free cash flow decreased by GBP28.2 million from the previous year, impacted by higher CapEx, a higher effective tax rate, and a working capital outflow.
- Net debt increased by GBP24.9 million to GBP55.6 million compared to the previous year.
- The effective tax rate rose to 26.4%, 5 percentage points higher than in FY23, impacting earnings per share negatively.
- Dunelm Group PLC (DNLMY) faces ongoing challenges with wage inflation, which added GBP20 million to costs in FY24.
- The company anticipates continued freight surcharges due to disruptions in Red Sea routes, which could impact future gross margins.
Good morning, and welcome to the Dunelm prelims presentation covering our financial year to the end of June. My name is Nick Wilkinson, and Alison Brittain, Karen Witts, and I are delighted to welcome you to the office of Peel Hunt in London.
Whether you are here in person or joining virtually, I hope you are well, and thank you for your interest in the continuing story of Dunelm. We'll use this presentation to bring to life how we are developing the business and the results we are achieving. We are, as the saying goes, living through interesting times. For a strong business, this creates exciting opportunities, but our excitement is matched with level-headedness and operational discipline.
You'll hear us talk equally about growth and about grip this morning. It's our normal running order. I'll introduce the highlights. Karen will go through the financials and guidance for the next financial year, and I'll be back to share more detail on our plans and how we'll unlock our full potential as the home of homes
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