Western Mail

Dunelm predicted to post higher profits

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INVESTORS will be hoping for a sunny outlook from home retailer Dunelm this week as it reports full-year numbers on Wednesday.

Annual pre-tax profits are expected to be at the higher end of a previously guided £124m to £126m range, after the group benefited from a spate of favourable weather in the fourth quarter.

Last year the group posted a profit of £93.1m before tax, declining compared to performanc­e in 2017.

As the company returns to profit growth, investors will be hoping for a small bump to the dividend from 28.6p to around 29.7p.

In the year to date, Dunelm’s shares have surged by more than 68%, making it one of the bestperfor­ming stocks in the retail sector behind Pets At Home.

On Friday shares were trading at around 865p.

Under chief executive Nick Wilkinson, who joined in 2017, the group has shifted strategy to focus on its core offering.

This included closing the under-performing Worldstore­s and Kiddicare websites to centre efforts on its own online operations.

The roll-out of a new digital platform is now under way, with the full transfer expected to complete in the 2020 financial year after a series of beta phases.

Following a July trading update, analysts at Stifel said: “Dunelm continues to gain market share in a highly competitiv­e market, reporting strong volumedriv­en strong growth across all categories and margin improvemen­ts.

“Management changes have enhanced the group’s credential­s and we see the recent success as the starting point for further momentum.”

Investors will be keeping an eye out for indication­s of the group’s near-term prospects.

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