At Dunelm, we love homes and are just as obsessed by the products that go in them. We’re the UK’s No. 1 Homewares retailer offering our customers a wide range of products to enhance every room in their home. We focus on style, quality and value and are always working hard to make our customers’ lives a little easier.

Highlights

Revenue

£m

+9.9%

(2017: +8.5%)

EBITDA*

£m

-1.8%

(2017: -7.8%)

* EBITDA is presented before exceptional costs.

Dividend Per Share

Pence

+1.9%

(2017: +3.6%)

Operational Highlights

Growth in unique customers numbers both online (+18%), and in-store (+5%)*
Integration of Worldstores product catalogue and supply chain completed
Continued gain in Homewares market share to 8.1% (2017: 8.0%)†, further strengthening number one position

Improvement in customer satisfaction scores across all channels
Opening of ten new superstores in the year (including one relocation) and completion of six new format refits
Product range grew in breadth and quality with 90% of customer reviews of products online being rated four or five stars

Financial Highlights

Sales growth of 9.9% including 1.0% like-for-like (LfL) growth in stores and an online LfL sales increase of 37.9%
EBITDA of £139.6m (pre exceptional items), down 1.8% year-on-year reflecting investment for growth and consolidation of Worldstores trading losses

PBT of £102.0m (pre exceptional items), inclusive of an estimated £8.4m of Worldstores operating losses in year which will not repeat in future years
PBT of £93.1m including £8.9m of exceptional costs relating to the integration of the Worldstores businesses

£44.0m capital investment in year including digital technology development, new and refit stores and a new purpose-built manufacturing centre for our made-to-measure offer
Improvement in free cash flow year-on-year to £52.9m (FY17: £14.2m)
1.9% increase in full year dividend to 26.5 pence per share

Performance

Chairman's Statement

"We are now well placed for future profitable growth in a multichannel world. Our strategy will bring continuous improvement online and in stores"

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Business Review

"I see plenty of opportunity for us to drive growth as the leading multichannel specialist, helping more customers to create a home they love... This is a new and exciting chapter for Dunelm as we fully embrace digital retailing"

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Financial Review

"Dunelm continues to deliver strong cash returns from operations providing the opportunity to make investment decisions to deliver long term growth"

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Goal One

Reaching new customers with our brand

Strategic Objective

Increase the number of shoppers at Dunelm

What we're doing

An integrated programme to build brand awareness, consideration and acquisition

Brand building campaign begins in September 2018 with TV sponsorship and advertising
Performance marketing programmes will accelerate under one brand
Developing own channels and unique content (#mydunelm, Salesforce capabilities, emails)
Store roll-out continues with a long term target of around 200 stores in the UK
Product PR and Influencer programme gaining critical mass

Goal Two

Create new reasons for customers to shop with Dunelm

Strategic Objective

Increase customer visit frequency

What we're doing

Improving our product proposition by offering the best choice, quality, value and style

Cultivate win/play/show category ranging strategies including seasonal
Buy more promotional product to complement core ranges and increase newness and value
Use drop-ship capabilities to develop online range, especially in soft furnishings
Build differentiated offer in selected furniture categories (e.g. Fogarty mattresses)

Goal Three

Easy and inspiring multichannel shopping for our customers

Strategic Objective

Increase conversion and basket size

What we're doing

Be the leading multichannel brand in homewares for customer experience

Introduce our new web platform including Click & Collect in Q3 FY19
All range available in-store through customer hosts and mobile tablet selling equipment
Refits to develop inspiration and ease of shopping
Technology teams set up for agile development from Q1 FY19

Goal Four

Simple and low cost – good housekeepers

Strategic Objective

Improve operating leverage and efficiency

What we're doing

Developing our business to be agile and scalable. Instilling the good housekeepers mindset

Simplify to one brand, one platform (for Tech and Supply Chain efficiency)
Develop agile and scalable systems and processes
Improve internal controls around retail basics
Attack third party costs (sourcing, procurement, value engineering)
Re-engineer non-customer facing activities in store

Goal Five

A great place to work for colleagues

Strategic Objective

Improve customer conversion efficiency

What we're doing

Retaining our culture as we embrace a digital future

Restructured commercial teams to increase pace and customer ownership
Always-on colleague listening to enhancing our ability to engage with and make continual improvements for our colleagues
Restructured technology team to enhance technical product ownership and development agility and skillset
Appointed a designated non-executive Director to our Colleague Council to improve engagement with the Group Board

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