Dunelm, the homewares and furniture retailer, has announced its second special dividend in six months after shrugging off concerns over a consumer spending squeeze to post record half-year profits.
The company said on Wednesday that trading in 2022 had been “encouraging” as it reported a 10.6% rise in sales to £795.6m for the last six months of 2021 on the same period in the previous year.
It posted pre-tax profits of £140.8m – up by 25.3%.
The company credited a margin of almost 53% which it said was lifted by the impact of COVID restrictions on stores during the second half of 2020 and higher full-price sales as it benefited from strong demand online and in store.
0:48 ‘People are really being squeezed – it’s bonkers’, says Nick HewerDunelm, which has 170 sites, reported on its progress as fears grow across the retail sector that demand will be hit as a surge in the cost of living gathers pace.
AdvertisementThe Bank of England predicted last week that inflation would top 7% in April – from its current 30-year high level of 5.4% – when the energy price cap is adjusted to reflect unprecedented increases in wholesale gas costs.
The cost of an average dual fuel bill is to rise by almost £700 on an annual basis.
More on Retail Related Topics: RetailHowever, a report this week by the British Retail Consortium suggested that families were yet to tighten the purse strings completely as sales of items such as furniture drove a leap in sales during January.
0:38 Bank governor explains ‘very big shock’ from inflationDunelm said the outlook “remained uncertain” but insisted that it was well-positioned to navigate its own inflationary pressures as most of its products were own brand.
Shares jumped by 3% at the open.
Nick Wilkinson, the chief executive, said: “When we announced our interim results in 2020, we were weeks away from the world being turned upside down.
“Two years later, we are moving forwards as a bigger, better business, with more capability, more resilience, more ambition, and delivering accelerated growth.”