Dunelm pays out £43m as profits surge

25th Feb 2010 11:47

Homewares retailer Dunelm is to return £43m or 21.5p per share to shareholders after a bumper first half.The cash payout is in addition to a 50% hike in the ordinary dividend to 3p.Chief executive Will Adderley said the payout reflects the very strong financial position enjoyed by the 100 outlet -strong retail chain, which saw interim profits power forward.First half sales to end December benefited from the winter sale being included for eight days and rose by 26% to £254.2m (£201.8m). Like-for-like sales grew by 15.4%.Profits surged by 69% to £46.2m (2008: £27.3m) as gross margins rose by 2 percentage points to 48%. Operating profits jumped by 76% to £45.9m (2008: £26.1m)."We expect consumer spending to weaken in 2010 compared with 2009 as a result of broader economic and political factors. However, our business is in excellent shape and our customer proposition remains compelling. I am confident that even if LFL growth does prove challenging, overall Dunelm will continue to grow and to become an even stronger business," Adderley said.The first seven weeks of the second half saw sales rose by 9.1%, though reverse of the timing benefit of the winter sale meant a decline 0.2% like-for-like. Adjusting for this, underlying LFL growth was over 6%, Dunelm said.· Interim dividend increased by 50% to 3.0p per share (2008: 2.0p)