Dunelm suffered a fall in pre-tax profits but said sales increased in its second and final full year under former boss John Browett.
The homeware specialist’s underlying pre-tax profit fell 15.2% to £109.3m in the year to July 1 – a 28.3% drop on a reported basis.
This figure includes costs of around £28m relating to its acquisition of the Worldstores group last year.
Dunelm full-year sales rose 8.5%, despite operating in what the retailer described as “subdued” homewares and furniture markets. Excluding Worldstores, revenue nudged up 2.3%.
The retailer said that Worldstores, which includes the Kiddicare brand, has given it a “springboard for online growth and range development” and insisted the integration process is well under way.
Dunelm told Retail Week earlier this year it plans to open Kiddicare shop-in-shops in up to 50 of its stores.
It said today that it expects to reach near break-even in the Worldstores businesses in its current financial year, and anticipates it will generate a £10m boost to pre-tax profits in the financial year to follow.
Changes at the top
The retailer is currently on the hunt for a new chief executive after John Browett made a surprise exit from the business last month after just two years at the helm.
Chairman Andy Harrison, who is helping run the company in the absence of a chief executive, said: “Dunelm has made good strategic progress over the year, most notably with the acquisition of Worldstores, which moves us closer to our goal of being the biggest and best multichannel homewares retailer in the UK.
“Over the medium term we are aiming to double our sales to £2bn, with 30%-40% from our increasingly important online channel.
“The Worldstores acquisition provides a step change in our online scale, product range and capability. The integration is going well and we remain confident in the benefits that it will generate.”
Dunelm said the start of its current financial year had been “encouraging” with good like-for-like sales growth boosted by favourable weather comparatives.
However, Harrison warned that the trading environment would “remain challenging” as the disposable income of UK consumers comes under pressure.
“Nevertheless, we have a full programme of management actions under way to further improve the Dunelm customer proposition, both online and in-store, increase our business efficiency and support our colleagues,” he added.
Dunelm plans to have opened a total of eight new stores by the end of the first half.