Dunelm has reported a fall in full-year profits as the integration of the Worldstores business took a toll.

Dunelm’s underlying pre-tax profit fell 6.7%, before exceptionals, to £102m in the year to June 30.

Group sales climbed 9.9% to £1.05bn and like-for-likes advanced 4.2%.

Dunelm said the performance reflected a full year of trading losses relating to online business Worldstores – its integration is now “virtually complete” – as well as a small reduction in gross margin at the core business and increased operating costs partly a result of a higher mix of online sales.

Chairman Andy Harrison said that the year had been “complicated by a combination of management changes, the integration of Worldstores and a fragile economic environment”.

Dunelm’s unique customer numbers rose 18% online and 5% in-store, and Dunelm.com sales, including Reserve and Collect, rose to account for 13.5% of total sales – up from 11.2% the previous year.

Chief executive Nick Wilkinson, who was appointed in February, said: “Following healthy sales growth over the past year, we are now taking steps to simplify the business under the core Dunelm brand, with one web platform and an integrated supply chain.

“This will allow us to respond more quickly to the changing consumer environment and drive future profitable growth.

“The Worldstores acquisition has given us the key ingredients for a step change in our digital capabilities. We are preparing to launch Dunelm.com on our new proprietary technology to give us much greater agility in improving our customer proposition.

“The UK retail environment remains challenging, but against this difficult background we have traded in line with expectations during the current financial year to date.”