REG - Dunelm Group plc - Preliminary Results
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RNS Number : 4943Y Dunelm Group plc 09 September 2025
9 September 2025
Dunelm Group plc
Preliminary Results for the 52 weeks ended 28 June 2025
Building the Home of Homes: delivery and ambition
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares
retailer, today announces its preliminary results for the 52 weeks to 28 June
2025.
FY25 FY24 YoY
Total sales £1,771.0m £1,706.5m +3.8%
Digital % total sales(1) 40% 37% +3ppts
Gross margin 52.4% 51.8% +60bps
Net operating costs:sales ratio(2) 39.9% 39.3% +60bps
Profit before tax ("PBT") £211.0m £205.4m +2.7%
PBT margin % 11.9% 12.0% (10bps)
Diluted earnings per share 76.8p 74.4p +3.2%
Free cash flow(3) £127.4m £132.2m (£4.8m)
Net debt(4) £102.0m £55.6m +£46.4m
Net debt: EBITDA(5) 0.3x 0.2x n/a
Ordinary dividend per share 44.5p 43.5p +2.3%
Special dividend per share 35.0p 35.0p n/a
Highlights
· Sales of £1,771m, up 3.8% on FY24, delivered with a clear focus on
relevance for our customers:
o Increased share of the combined homewares and furniture markets to 7.9%(6)
(FY24: 7.7%)
o Balanced sales growth, with increases in both volumes and average item
values driven by product and category mix
o Growth in active customers of 80bps(7) year-on-year, alongside higher
frequency
o Digital sales 40% of total sales (FY24: 37%), with strong growth in Click
& Collect
· Strong gross margin of 52.4% (FY24: 51.8%) demonstrating our
commercial and operational grip
· Profit before tax up 2.7% to £211m; stable PBT margin of 11.9%
(FY24: 12.0%) after absorbing inflationary headwinds
· Free cash flow of £127m (FY24: £132m); improved operating cash
flows offset by higher capital investment
· Final ordinary dividend per share of 28.0 pence (FY24: 27.5 pence),
bringing total ordinary dividend per share to 44.5 pence (FY24: 43.5 pence).
Total dividends declared of 79.5 pence per share (FY24: 78.5 pence), including
special dividend paid in April
· Further strategic progress as we continue to invest for long-term
growth:
o Opened six new superstores (including one relocation); plus first store in
inner London
o Completed two acquisitions; a 13-store retailer in Ireland, and the brand
and archive of Designers Guild
o Invested in our own Made-to-Measure blinds and shutters manufacturing
facility
Current trading and outlook
· Pleased with early trading in the new financial year, although yet to
see signs of a sustained consumer recovery
· Continuing to raise the bar on our customer offer, with a positive
response to our new Autumn / Winter product ranges
· Excited about our future plans, with a Dunelm app available to
customers in the autumn, more new stores, and further investment in growth and
productivity drivers
· Confident of gaining further market share as we progress towards our
next milestone of 10% in the medium term
· Well-placed to continue to deliver sustainable, profitable growth
Nick Wilkinson, Chief Executive Officer, commented:
"In my final set of results at Dunelm, I'm pleased to report another
successful year, marked by growth in sales and profits, increased market share
and meaningful strategic progress. Having had the privilege of being a part of
this awesome business, I want to thank our incredible colleagues, whose
commitment and adaptability has driven our performance this year and
throughout our history.
"We've learned to navigate a volatile consumer environment, raising the bar on
what really matters to our customers - delivering amazing value and helping
them to create stylish, joyful and hard-working homes. With a thriving digital
offer, vibrant stores, and a broadening category offer, we're finding new and
meaningful ways to be relevant in our customers' lives.
"This has also been a year of milestones for our business; opening our 200(th)
store and first inner London location, expanding Click & Collect,
extending our UK Made-to-Measure manufacturing, entering our first market
outside the UK, and buying the brand and archive of Designers Guild. All these
investments are centred on creating a better offer and experience for our
customers.
"As I move on, I leave behind a special business, with a strong business
model, well positioned for the future. Dunelm is evolving as a multi-category
and multi-channel specialist, The Home of Homes, making good progress towards
its next market share milestone of 10%. With customers at our heart, and a
commitment to long-term, sustainable growth, Dunelm is still just getting
started."
1 Digital includes home delivery, Click & Collect orders and tablet-based
sales in store
(2) Net operating cost is defined as other operating income less operating
costs. Other income includes rental income and insurance income
3 Free cash flow is defined as net cash generated from operating activities
less capex (net of disposals), net interest paid (including leases) and loan
transaction costs, and repayment of principal element of lease liabilities. A
reconciliation of operating profit to free cash flow is included in the CFO
review
4 Cash and cash equivalents less total borrowings (as shown in note 16).
Excludes IFRS 16 lease liabilities
(5) EBITDA defined as operating profit plus depreciation and amortisation of
property, plant and equipment and intangible assets plus loss on disposal and
impairment of property, plant and equipment and intangible assets plus
depreciation of right-of-use assets
(6) Based on GlobalData UK combined homewares and furniture markets, excluding
kitchen cabinetry and bathroom furniture, for the 12 months to June 2025
7 Year-on-year growth in UK unique active customers who have transacted at
least once in the 12 months to June 2025. Management estimates using Barclays
data
Analyst presentation:
There will be an in-person presentation for analysts and institutional
investors this morning at 9.30am, hosted at Peel Hunt LLP, 100 Liverpool
Street, London, EC2M 2AT, as well as a webcast and conference call with a
facility for Q&A. For details, please contact hugo.harris@mhpgroup.com. A
copy of the presentation will be made available at corporate.dunelm.com
(http://corporate.dunelm.com) .
For further information please contact:
Dunelm Group plc investorrelations@dunelm.com
Nick Wilkinson, Chief Executive Officer
Karen Witts, Chief Financial Officer
Media enquiries: MHP 07770 753 544
Oliver Hughes / Rachel Farrington / Charles Hirst dunelm@mhpgroup.com
Next scheduled event:
Dunelm will release its first quarter trading update on 23 October 2025.
Quarterly analysis:
52 weeks to 28 June 2025
Q1 Q2 H1 Q3 Q4 H2 FY
Total sales £403.2m £490.5m £893.7m £461.9m £415.4m £877.3m £1,771.0m
Total sales growth +3.5% +1.6% +2.4% +6.3% +4.0% +5.2% +3.8%
Digital % total sales 37% 40% 39% 41% 42% 42% 40%
52 weeks to 29 June 2024
Q1 Q2 H1 Q3 Q4 H2 FY
Total sales £389.6m £482.9m £872.5m £434.5m £399.5m £834.0m £1,706.5m
Total sales growth +9.2% +1.0% +4.5% +2.6% +5.0% +3.8% +4.1%
Digital % total sales 35% 37% 36% 37% 40% 39% 37%
Notes to Editors:
Dunelm is the UK's market leader in homewares with a purpose 'to help
create the joy of truly feeling at home, now and for generations to come'. Its
specialist customer proposition offers value, quality, choice and style across
an extensive range of more than 100,000 SKUs, spanning multiple homewares and
furniture categories and including services such as Made-to-Measure window
treatments.
The business was founded in 1979 by the Adderley family, beginning as a
curtains stall on Leicester market before expanding its store footprint. The
business has grown to 202 stores across the UK and Ireland and has developed a
successful online offer through dunelm.com which includes home delivery and
Click & Collect options. 159 UK stores now include Pausa coffee shops,
where customers can enjoy a range of hot and cold food and drinks.
From its textiles heritage in areas such as bedding, curtains, cushions,
quilts and pillows, Dunelm has built a comprehensive offer as The Home of
Homes including furniture, kitchenware, dining, lighting, outdoor, decoration
and DIY. The business predominantly sells specialist own-brand products
sourced from long-term, committed suppliers.
Dunelm is headquartered in Leicester and employs c.12,000 colleagues. It has
been listed on the London Stock Exchange since October 2006 (DNLM.L) and
the business has returned more than £1.5bn in distributions to shareholders
since IPO(8).
Metrics reported from the financial statements are on a consolidated basis;
other metrics are presented on a UK-only basis unless otherwise stated.
(8) Ordinary dividends plus special distributions
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
I am pleased to report another successful year in which we delivered a strong
financial performance, with good sales and profit growth, more investment in
the business, and further cash returns to shareholders.
We have continued to gain share in a homewares and furniture market which grew
slightly for the first time since FY22. So far, however, we are yet to see
signs of a wider consumer recovery, and consumer confidence has remained
lacklustre. Against this backdrop, we will carry on embracing the reality of
how consumers are feeling, and through continually raising the bar on our
products and the proposition we offer, we are helping more customers create
the joy of truly feeling at home.
We have put our growth plans into action across our three strategic pillars as
we continue to build Dunelm as The Home of Homes. We are elevating our product
offer, expanding the breadth and relevance of our ranges across more
categories, with furniture a good example of our progress. We are connecting
to more customers through our total retail system, opening more new stores,
making further improvements to our digital channels, and expanding our Click
& Collect offer. In addition, we are finding more ways to harness our
operational capabilities, delivering further efficiencies in areas including
our supply chain and store operating model, maintaining the operational grip
which continues to be a core strength of the Dunelm business model.
We have also taken the business into some new areas, which, although initially
small, support our future growth plans. During the year we opened our first
inner London store; took our first steps outside the UK with the acquisition
of Home Focus in Ireland; acquired the brand and design archive of Designers
Guild; and extended UK manufacturing within our Made-to-Measure business.
These exciting developments are bringing new capabilities and new
opportunities to extend our position as a multi-channel, multi-category
specialist.
Implementing our ambitious plans, whilst delivering a consistent performance
over many years, makes me appreciate the skills and values of my colleagues,
and I thank all of them for their continued commitment and ambition to deliver
for our customers.
FY25 Review
We delivered another good financial performance in FY25, growing sales
alongside market share and customer numbers, combined with a stable PBT margin
and higher earnings. We also continued to invest in the business while
delivering strong shareholder returns.
Total sales increased by 3.8% in the year, through a combination of higher
volumes and increased average item values. The rise in average item values was
primarily due to the mix of products sold, rather than headline price
increases, as we continue to work hard on broadening the appeal of our ranges
whilst offering outstanding value for our customers. With our higher sales
also supported by increased customer numbers(9) and shopping frequency, our
growth was well-balanced.
The combined homewares and furniture market grew slightly in the year, having
declined since FY22, with the second half benefiting from stronger growth in
outdoor furniture categories. We again increased our market share, up 20bps
during the year to 7.9%(10), and as ever we see headroom for further share
gains as we progress towards our next milestone of 10% share in the medium
term.
We have again demonstrated strong operational grip, absorbing further
inflationary cost pressures and delivering a PBT margin of 11.9%, broadly in
line with the prior year. Gross margin strengthened by 60bps to 52.4%,
reflecting continued tight control of input costs. Our operating costs as a
proportion of sales increased due to another year of labour cost headwinds and
continued investment in the business, partly offset by meaningful productivity
gains. Overall, and including slightly higher finance costs year-on-year, our
profit before tax of £211m was up 2.7% against FY24; a strong result. Our
diluted earnings per share increased by 3.2% to 76.8p, largely due to the
profit before tax growth and a small benefit from a lower effective tax rate.
We continue to be highly cash generative; FY25 operating cash flow of £256m
(FY24: 232m) was up 10.2% year-on-year, reflecting trading performance and
improved working capital. After taking into account capex, which was higher
than usual due to two freehold property purchases, our conversion of operating
profit to free cash flow was below last year, at 57%. Our ability to invest
for growth and efficiency, alongside an ongoing commitment to returning
surplus cash to shareholders, demonstrates the underlying financial strength
of the business. We again increased our ordinary dividend, and are proposing a
final dividend of 28 pence per share, bringing the full-year ordinary dividend
to 44.5 pence per share, up 2.3% year-on-year. Including a special dividend
announced at our interim results, we declared total dividends of 79.5 pence
per share during the year.
(9) Year-on-year growth in UK unique active customers who have transacted at
least once in the 12 months to June 2025. Management estimates using Barclays
data
(10) Based on GlobalData UK combined homewares and furniture markets,
excluding kitchen cabinetry and bathroom furniture, for the 12 months to June
2025
Growing sustainably
Dunelm has always been a business with a strong focus on making a positive
difference through its operations and I am proud of our ongoing commitment to
growing sustainably. We do this through our Good & Circular approach,
focused on doing the right thing for our Planet; our Communities; and our
People.
As we look to reduce our negative impact on the planet, we relish the
opportunities that come with new materials and technology. 52% of our
own-brand products now meet our 'Conscious Choice' criteria, using more
sustainably sourced materials. We have also made further progress in reducing
our Scope 1 carbon emissions (intensity now down 54% since FY19) and our
primary plastic packaging for own-brand products now contains more than 30%
recycled content.
Our stores, distribution centres and support sites continue to play an
important role in their communities. We have 1.4m Facebook followers across
our store community pages, which have helped us to organise campaigns to
connect generous customers with good local causes, including this winter's
Delivering Joy campaign, where 270,000 gifts were donated. In FY25 we raised
more than £1m in total for charitable causes, and our partnership with Age UK
is thriving.
We now have c.12,000 colleagues driving the business forward, and we remain
committed to their ongoing development and wellbeing. During the year we saw
an improvement in colleague engagement scores, and a further increase in our
high level of retention. Whilst we have more work to do on diversity, we have
made progress, with greater representation from ethnic minority backgrounds in
our leadership population.
Building The Home of Homes
Our vision is for Dunelm to be the most trusted and valued brand for customers
in homewares and furniture. In short, we want to truly become 'The Home of
Homes'. Throughout our history we have grown by winning market share, and from
our current 7.9%(11) we are targeting a medium-term milestone of 10%, with
significant opportunity beyond. To achieve this, our growth plans are
underpinned by three broad focus areas, which in combination frame our
priorities and investments:
1. To elevate our product offer
2. To connect with more customers
3. To harness our operational capabilities
These focus areas are interconnected, and their strength lies in their
compounding benefits. This is illustrated by the successful expansion of our
Click & Collect proposition, which grew by around 30% in FY25, through the
combination of a greater product range being available, the benefit of both a
physical and digital shopping experience, and improved processes to increase
efficiency for both customers and colleagues.
As we start the new financial year, we are accelerating and evolving the parts
of our plan that play to our strengths as a multi-channel and multi-category
specialist, demonstrated through the following examples.
(11) Based on GlobalData UK combined homewares and furniture markets,
excluding kitchen cabinetry and bathroom furniture, for the 12 months to June
2025
1. Elevate our product offer
Product remains at the heart of our customer offer and, as a specialist, we
draw on our experience to increase our relevance and appeal to a broad
customer base. The size of our overall range has also increased over time, and
we now offer more than 100,000 SKUs, almost double the number we had three
years ago. We take care to maintain a curated and coordinated offer, blending
choice, value, design and style across our collections.
Our furniture offer has been a strong contributor to our growth for several
years, benefiting from building capabilities in product design and sourcing.
There is no better example of this than upholstered chairs and sofas, where in
the last five years we have more than doubled our market share in a £3bn(12)
addressable market, with significantly more opportunity ahead. We now have a
well-curated range of best-sellers, including our popular Beatrice snuggle
chairs, available in a variety of colourways and materials, at very
competitive prices.
In our supply chain we are balancing efficiency with customer choice, and most
of our chairs and sofas are now available for quick delivery throughout the
UK. With work also underway on testing an improved furniture presentation in
store, we see plenty of headroom for further growth in this category.
As well as developing newer categories, we maintain an unrelenting focus on
our heritage ranges, working to extend our leadership in areas such as
textiles, where our market shares are much higher. Here, product development
remains the starting point for raising the bar on our customer offer. In our
Egyptian Cotton towels range, we have invested in more quality in the yarn and
manufacturing, enabling us to introduce a slightly higher but competitive
price point, while remaining better value than comparable quality elsewhere.
These changes have delivered good results, with increased sales and gross
margins. Similarly, in curtains, where our collections already span multiple
price/quality tiers, we have now added more quality in the better tier of
hanging pack curtains, with weighted corners, deeper headings, and a wider
colour selection helping to differentiate our specialist proposition from
alternatives.
Doubling down on our specialist authority gives us the opportunity to
increasingly attract customers from non-specialists. Our 'Home of Colour'
campaign showcases the breadth and depth of our ranges, as well as
demonstrating our unique ability to coordinate colour across textiles and many
other product categories, enabling customers to create the look they want.
(12) GlobalData UK upholstered furniture market, for the calendar year 2024
2. Connect with more customers
We connect with more customers through our total retail system, combining the
benefits of physical and digital shopping to increase our reach and improve
customer experience. Our connected channels help to drive frequency and
differentiate our proposition from single channel players.
In recent years we have seen significant growth in our digital sales, which
combine home delivery sales with Click & Collect and tablet-based selling
in stores, and now represent 40% of total sales. Back in FY19, when digital
sales were less than 20% of our total, we were catching up with other
retailers. We had a reliable website, but only relatively basic search tools
and limited customer data. Since then, we have made significant progress in
optimising and scaling this channel. We have aligned payment systems between
stores and online sales; improved our use of data and experimentation; and
delivered better personalisation, including through the introduction of
AI-driven search, all with the aim of better understanding and improving the
shopping experience for our customers.
As we move forward, there is a much greater opportunity to grow. Our app,
which becomes available to customers later this year, is our next significant
development. We deliberately chose not to launch an app until our data and
digital capabilities were sufficiently developed. With those foundations now
in place, we will have the ability to offer relevant, personalised and
inspirational product content to our customers, without the significant costs
that come with generating website traffic to dunelm.com. In time, the app will
also allow us to develop better cross-channel experiences, making it easier to
check stock availability in your local store and access more product
information.
As well as enhancing the online customer experience, we are connecting to more
customers through our physical footprint. We now have 202 stores across the UK
and Ireland, having opened our landmark 200(th) store in Merthyr Tydfil
earlier this year.
London is a significant addressable market where Dunelm remains
underrepresented, therefore offering an exciting growth opportunity. We opened
our first store in inner London in FY25, a 5,000 sq ft site in Westfield White
City, and we will open a similar sized store in Wandsworth in FY26. We also
acquired two freehold properties in London and the South East, which will be
converted to Dunelm stores in the future. These developments are meaningful
steps to connect us to more customers in this part of the country.
The different sizes and locations of our stores are a function of site
availability and catchment size. Where practical, we prefer our standard
larger superstore format of c.30,000 sq ft, which typically pays back in less
than three years. Where this is not possible, we look to smaller alternatives,
often around half the size and in infill catchment areas, and which still
provide a very healthy return. In FY25 we opened six superstores, split evenly
between larger and smaller stores. We expect to open 5 - 10 new superstores
this year, the majority of which will be larger stores.
3. Harness our operational capabilities
Harnessing our operational capabilities refers to how we think about improving
efficiency and effectiveness throughout the business, in order to drive both
growth and productivity.
We continue to see opportunities to be more productive, especially in areas
driven by technology. Whilst ongoing inflationary headwinds partly mask the
visibility of the benefits delivered to date, we have confidence that our
ongoing initiatives support long-term sustainable and profitable growth,
without compromising the customer proposition.
Continuous improvement initiatives contributed the majority of the £22m of
operating cost productivities in FY25. These included further efficiencies in
performance marketing, where we use data and experimentation to drive customer
level transaction profitability. Meanwhile, in store operations our teams are
introducing new processes and technology to improve colleague efficiency and
customer service levels, in growth areas such as Click & Collect.
Similarly, in our supply chain, we continue to drive incremental benefits
through small-scale automation, and the optimisation of customer returns.
We also continue to invest in larger programmes, underpinned by technology and
data, such as the roll-out of assisted self-checkouts across our stores, and a
new forecasting and replenishment system; both moderately sized programmes
that have grown our skills and confidence in delivering technology and
business change.
Looking forward, we are exploring other opportunities that will offer future
potential benefits. This includes further deployment of AI; the use of RFID to
improve stock accuracy and store processes; and the potential for further
mechanisation of our logistics operations. In our usual way, we will approach
these by testing and learning as we go, ensuring we build confidence in our
investment plans.
Summary and outlook
As I look back on my tenure with Dunelm, the unique strengths of this business
have been a constant in an ever-changing world. We have seen significant
political and economic changes both domestically and internationally,
technology advancing at pace, high levels of inflation, disruption to global
supply chains, and, of course, the Covid-19 pandemic. Through all this change,
Dunelm has continued to grow and continued to thrive.
Our digital offer has matured but still has significant potential, and our
stores remain the heartbeat of the business. Alongside broader appeal across
more product categories, these competitive advantages position the business
very well for the future. Dunelm is differentiated through the role it has in
customers' lives, our communities and with our suppliers. We are continuing to
build the positive impact we have as The Home of Homes, as we further
strengthen the business and build greater trust with all of our stakeholders.
Dunelm has always had great ambition, which has seen it go from strength to
strength throughout its history. We are as ambitious and restless now as we
ever have been, and our next milestone of 10% market share is firmly within
sight. With customers at our heart, and an ingrained focus on long-term,
sustainable growth, there is more opportunity than ever.
Nick Wilkinson
Chief Executive Officer
9 September 2025
CHIEF FINANCIAL OFFICER'S REVIEW
Income Statement
FY25 FY24 YoY
Revenue £1,771.0m £1,706.5m +3.8%
Gross profit £928.3m £883.3m +5.1%
Gross margin % 52.4% 51.8% +60bps
Net operating costs (£706.3m) (£670.0m) +5.4%
Operating profit £222.0m £213.3m +4.1%
Net finance costs (£11.0m) (£7.9m) +39.2%
Profit before tax £211.0m £205.4m +2.7%
PBT margin % 11.9% 12.0% (10bps)
Taxation (£54.7m) (£54.2m) +0.9%
Profit after tax £156.3m £151.2m +3.4%
Effective tax rate 25.9% 26.4% (50bps)
Revenue
FY25 FY24 YoY
Digital % total sales 40% 37% +3ppts
Combined market share(13) 7.9% 7.7% +20bps
Active customer growth(14) N/A N/A +80bps
Total sales for the full year increased by 3.8% to £1,771m (FY24: £1,706m).
We were pleased with the strength of our trading performance, in a market
which despite growing slightly in the year, is yet to demonstrate sustained
signs of consumer recovery. We gained further market share through our high
quality sales growth, increasing by 20bps in the full year to 7.9%(13).
Digital participation increased again, up 3ppts year-on-year to 40%,
reflecting the success of our ongoing focus on enhancing customers' digital
experience. Digital participation includes the benefits of our improved Click
& Collect proposition, where we have significantly expanded the number of
products available, whilst simultaneously improving and simplifying in-store
collection processes.
Through fast and convenient channels, we are connecting more customers to more
products and the appeal of our ranges drove increased sales volumes in the
year. We also increased our average item value, driven by product and category
mix, with particularly strong growth in our furniture and Made-to-Measure
categories. With our usual focus on outstanding value, we approach pricing
through a rigorous focus on our good, better and best price and quality tiers,
ensuring that we offer great value at all price points. This year we have
continued to hold retail prices broadly stable, without passing on significant
inflation to our customers.
Our ability to offer value across our product ranges drives very broad
customer appeal. We have continued to offer relevance across categories with
our curated seasonal ranges, from student essentials to outdoor inspiration,
designed to cater to our customers' evolving needs. The number of active
customers was up 80bps(14) in the year, contributing to overall sales growth,
alongside higher shopping frequency. We saw particularly strong growth in our
youngest customer cohort of 16-24 year-olds, as well as in the London region,
reflecting our increasingly broad proposition.
(13) Based on GlobalData UK combined homewares and furniture markets,
excluding kitchen cabinetry and bathroom furniture, for the 12 months to June
2025
(14) Year-on-year growth in UK unique active customers who have transacted at
least once in the 12 months to June 2025. Management estimates using Barclays
data
Gross margin
We have again executed with commercial and operational grip, to deliver a very
strong full year gross margin of 52.4%, up 60bps year-on-year, largely without
passing on inflationary cost increases to our customers. We maintained tight
control of input costs, including proactive management of freight and FX,
which were broadly neutral across the full year (although FX became a small
margin tailwind in the final quarter). Towards the end of the financial year,
we also benefitted from a particularly strong sell-through of our seasonal
ranges, and throughout our Summer Sale we managed our promotional activity
effectively, delivering a strong full price sales performance.
Looking ahead, we will continue to apply a tight grip to our management of
gross margin. We expect a moderate tailwind from FX and a small headwind from
freight in FY26, and other input costs are currently broadly stable. We will
retain optionality over pricing decisions and discounting, whilst prioritising
our overall value proposition through our good, better and best range
architecture, to ensure that we deliver sustainable and profitable growth.
Net operating costs
FY25 FY24 YoY
Operating costs (£711.0m) (£670.0m) (£41.0m)
Other operating income £4.7m - +£4.7m
Net operating costs (£706.3m) (£670.0m) (£36.3m)
Net operating costs:sales % 39.9% 39.3% +60bps
Net operating costs were £706m (FY24: £670m), representing a net operating
costs:sales ratio of 39.9%. This was up 60bps on the prior year (FY24: 39.3%),
primarily driven by inflation and our commitment to continued investment in
the business to support our long-term strategic priorities. The increase in
costs was partly offset by productivity gains which accelerated from the
previous year.
Our volume-driven costs added £18m to operating costs in FY25, driven
particularly by performance marketing and logistics. These cost increases were
especially impacted by Click & Collect and two-person furniture
deliveries, both areas where we have seen strong growth.
We continue to operate in an inflationary environment, which added a further
£21m to our cost base. This was primarily driven by labour cost inflation
linked to increases in the National Living Wage, as well as increased employer
National Insurance contributions in the final quarter of our financial year.
The annualisation of these increases will also impact FY26, when we expect
overall inflation to be 3 - 4% of our operating cost base.
Investment in the business, to support long-term growth and ongoing
efficiencies, remains a priority. We invested £17m through operating costs in
the full year, including the cost of six new superstore openings and the
embedding of the Home Focus business in Ireland into our Group operations.
Cost increases from inflation and continued investment were partly offset by
further productivity gains of £22m. These included performance marketing
efficiencies, where we have benefitted from investment in more advanced AI
technology to improve on-site conversion, whilst enhancing the customer
proposition. To drive efficiencies in our operations, we have reviewed our
in-store operating model to deliver incremental improvements, and have
implemented various tactical initiatives across our supply chain, for example
improving processes associated with customer returns. To ensure these
decisions are made without impacting the customer experience, we have also
introduced a customer satisfaction (CSAT) tool, giving us timely and granular
feedback to which we can appropriately respond.
We are reporting £5m of other operating income, comprising insurance receipts
related to two store fires in FY25, and rental income. Costs associated with
both the store fires and freehold properties are included within operating
expenses.
As we have always done, in FY26 we will continue to invest in the business to
support our strategic priorities, despite inflationary headwinds. We are
confident in our plans to drive long-term, sustainable growth and
efficiencies.
Profit before tax
In FY25, operating profit increased to £222m, £9m higher than the prior year
(FY24: £213m) as our expanded gross margin and productivity gains more than
offset inflationary cost headwinds and ongoing investment activity. Net
finance costs of £11m (FY24: £8m) were £3m higher year-on-year, reflecting
a higher net debt level. Finance costs included interest on IFRS 16 lease
liabilities of £7m (FY24 H1: £6m).
Overall, profit before tax in the period was £211m (FY24: £205m), up £6m
year-on-year and representing a PBT margin of 11.9% (FY24: 12.0%).
This continued our track record of applying operational grip to deliver
sustainable profitable growth. To achieve this over time, we take decisions on
pricing, value and investment whilst managing costs that may be driven by
external factors or associated with growth, and which my impact either gross
profit or operating expenses. Overall we have flexibility across the P&L
to manage to a broadly stable PBT margin over time.
Earnings
Profit after tax of £156m (FY24: £151m) reflects an effective tax rate of
25.9% (FY24: 26.4%). As reported at our half year, we saw a normalisation of
the effective tax rate, in line with our historic range of 50-100bps above the
headline rate - the prior year included the impact of a one-off deferred tax
adjustment. The difference between the effective tax rate and the headline
rate reflected the disallowable expenditure related to property purchases and
intangible asset additions. The impact of the Irish tax rate on the Group is
immaterial.
Basic earnings per share (EPS) for the period was 77.2 pence (FY24: 74.7
pence). Diluted EPS was 76.8 pence (FY24: 74.4 pence), growing 3.2% primarily
due to the increase in profit before tax, with a small benefit from the lower
effective tax rate.
Cash generation and net debt
FY25 FY24 YoY
Operating profit £222.0m £213.3m +£8.7m
Depreciation and amortisation(15) £83.4m £82.0m +£1.4m
Net movement in working capital (£0.5m) (£17.7m) +£17.2m
Share-based payments £5.5m £4.3m +£1.2m
Tax paid (£54.5m) (£49.6m) (£4.9m)
Net cash generated from operating activities £255.9m £232.3m +£23.6m
Capex & business combination (£67.3m) (£39.9m) (£27.4m)
Net interest and loan transaction costs(16) (£10.6m) (£9.4m) (£1.2m)
Repayment of principal element of lease liabilities (£50.6m) (£50.8m) +£0.2m
Free cash flow £127.4m £132.2m (£4.8m)
Net debt(17) £102.0m £55.6m +£46.4m
(15) Including impairment and loss on disposal
(16) Including interest on lease liabilities
(17) Cash and cash equivalents less total borrowings (as shown in note 16).
Excludes IFRS 16 lease liabilities
Operating cashflow for the period was £256m, up 10.2% year-on-year,
reflecting our trading performance and neutral working capital, compared to an
outflow in the prior year. Inventory was broadly flat year-on-year, despite
sales and volume growth, as we saw the benefit of our forecasting and
replenishment system implementation.
Capital expenditure for the year of £67m (FY24: £40m) was higher than our
long-term average, predominantly due to £38m of strategic investment in
acquisitions. These included two freehold property purchases in areas of white
space in London and the South East, the Home Focus business, and the Designers
Guild brand and archive. The freehold properties will be converted to Dunelm
stores in the future, with works commencing later this year. Other capital
expenditure included £22m investment in our store estate, including six new
superstores and one inner London store, eight refits of existing stores, and
our ongoing decarbonisation programme.
We expect FY26 capital expenditure to be around £50m, including 5 - 10 new
superstore openings, at least one inner London store and around ten store
refits. This does not assume any further freehold acquisitions. As previously
guided, we expect the majority of our new store openings to be leasehold, but
will consider freehold investment opportunities in areas where we are
underrepresented, and where financial returns are sufficiently attractive.
Cash tax paid in the year was £55m (FY24: £50m).
Total dividend payments in the period were £159m (FY24: £158m). The Group
also periodically makes share repurchases to hold in treasury to satisfy
obligations under employee share schemes, and in the year repurchased £15m of
shares (FY24: nil). The Group held 2.1m shares in treasury as at 28 June 2025
(FY24: 1.2m).
As a result, free cash flow for the year was £127m (FY24: £132m), reflecting
an operating profit to free cash flow conversion of 57% (FY24: 62%);
maintaining a strong overall free cash flow despite the higher capital
expenditure in FY25.
Banking agreements
At 28 June 2025, the Group had in place a £250m unsecured revolving credit
facility (RCF). The terms of the RCF included covenants in respect of leverage
(net debt(18) to be no greater than 2.5× adjusted EBITDA(19)) and fixed
charge cover (EBITDAR(20) to be no less than 1.75× fixed charges(21)), both
of which were met comfortably as at 28 June 2025. A one-year extension to the
facility was agreed in August 2025, with a maturity date of September 2029.
The terms are consistent with normal business practice and the covenants are
unchanged. The Group also maintains £10m of uncommitted overdraft facilities.
(18) Cash and cash equivalents less total borrowings (as shown in note 16).
Excludes IFRS 16 lease liabilities
(19) Adjusted EBITDA defined as EBITDA less depreciation of right-of-use
assets
(20) EBITDAR defined as EBITDA plus rent
(21) Fixed charges are defined as net interest costs plus right-of-use asset
depreciation plus rent
Going concern
At the time of approving the financial statements, the Board of Directors is
required to formally assess that the business has adequate resources to
continue in operation and as such can continue to adopt the 'going concern'
basis of accounting. To support this assessment, the Board is required to
consider the Group's current financial position, its strategy, the market
outlook and its principal risks.
The key judgement that the Directors have considered in forming their
conclusion is the potential impact on future revenue, profits and cashflows of
a downturn in consumer spending away from the homewares and furniture markets,
due to ongoing macroeconomic uncertainty and subdued consumer confidence. This
scenario could result in lower than planned growth in Year 1, followed by a
lower sales growth trajectory and higher costs to sales ratios throughout the
review period.
The Directors have also considered a deeper downturn in consumer spending away
from homewares, resulting in negative growth in Year 1, again followed by a
lower sales growth trajectory and higher costs to sales ratios throughout the
review period.
In these downside scenarios Dunelm has sufficient liquidity to continue
trading, to maintain the payment of dividends, and to comfortably meet
financial covenants. The Directors continue to assess the risks that climate
change poses to the business.
Reverse stress modelling has demonstrated that a prolonged sales reduction of
30% in Year 1 and 32% in Year 2 would be required to breach covenants by the
end of FY27; and a 45% sales reduction in each year would be required to
breach the RCF limit by the end of FY27, assuming reasonable mitigating
actions have been implemented.
Additionally, the Directors have also reviewed the potential impact of
material disruption to trading in our digital channel (including home
delivery, tablet-based sales in store, and Click & Collect sales) in year
1 reflecting the ongoing cyber security risk to retailers. The Directors are
satisfied the Group maintains appropriate access to short-term cash in the
event of such a circumstance.
Currently, climate change is not expected to have a significant impact on the
Group's going concern assessment or on the viability of the Group over the
next three years.
The Board believes that the Group is well placed to manage its financing and
other significant risks satisfactorily and that the Group will be able to
operate within the level of its facilities and meet its liabilities as they
fall due, for at least the next three years. For this reason, the Board
considers it appropriate for the Group to adopt the going concern basis in
preparing its financial statements.
Capital and dividend policies
The Board policy on capital structure targets an average net debt level
(excluding lease obligations and short-term fluctuations in working capital)
of between 0.2× and 0.6× the last 12 months' EBITDA(22).
The Group's dividend policy targets ordinary dividend cover(23) of between
1.75× and 2.25× earnings per share during the financial year to which the
dividend relates, and expects to maintain or progress, the absolute amount of
each dividend payment in line with the growth of the business. The Board may
allow a temporary fall in dividend cover requirements to maintain the
dividend.
The Board will continue to consider returning surplus cash to shareholders if
average net debt, excluding lease liabilities, over a period, consistently
falls below the minimum target of 0.2× EBITDA(22), subject to known and
anticipated investment and expenditure plans at the time.
The Group's full capital and dividend policies are available on our website at
corporate.dunelm.com
(https://protect.checkpoint.com/v2/r06/___http:/www.corporate.dunelm.com___.ZXV3MjpuZXh0MTU6YzpvOjI3NzI2ZjA5Mjg4MzI1NjRlODY3OWYzMTkwM2IyN2U5Ojc6NTYzODoyZDAyNmNiOTM4NTk1MmQ1M2NhOTdlNWQ3OWI1MTM5ZTAwYzMwNjY1YWI2MTk1YjVlM2UwZmIzYzczZGM1MjMyOnA6RjpU)
.
(22) EBITDA defined as operating profit plus depreciation and amortisation of
property, plant and equipment and intangible assets plus loss on disposal and
impairment of property, plant and equipment and intangible assets plus
depreciation of right-of-use assets
(23) Dividend cover is calculated as earnings per share divided by the total
ordinary dividend relating to the financial year
Dividends
Recognising our performance for the full year and ongoing confidence in the
business, the Board has proposed a final ordinary dividend of 28 pence per
share. This takes the full year ordinary dividend to 44.5 pence per share, an
increase of 2.3% compared to the prior year (FY24: 43.5 pence per share).
Dividend cover of 1.73× is very slightly below the Group's targeted minimum
of 1.75×. The Board considers this level appropriate in order to reflect
ordinary dividend growth broadly aligned to PBT growth of 2.7%. The final
dividend will be paid on 25 November 2025. The ex-dividend date is 30 October
2025 and the record date is 31 October 2025. Including a special dividend of
35 pence per share announced at our interim results, we declared total
dividends of 79.5 pence per share during the year.
Total dividends paid within the year were £159m, including a special dividend
of £70m (35 pence per share).
Principal risks and uncertainties
The Board regularly reviews and monitors the risks and uncertainties which
could have a material effect on the Group's results. The Board confirms that a
robust assessment of the principal risks facing the Group has been carried
out, including emerging risks and those that would threaten its business
model, future performance, solvency, or liquidity. In conducting such a
review, one new principal risk was identified in the year.
The introduction of 'geopolitical uncertainty' as a new principal risk
reflects ongoing global tensions, trade disputes and regional conflicts,
exposing vulnerabilities in retail supply chains and putting additional
pressure on margins and costs. The overall impact, if not managed
appropriately, could lead to detrimental impact on performance and disrupt our
operations.
A summary of the principal risks has been provided below:
Risk Impact
Geopolitical uncertainty The geopolitical landscape is complex and unpredictable. Global tensions,
trade disputes and regional conflicts continue to disrupt supply chains,
driving up costs and creating uncertainty across key markets. These pressures
are compounded by shifting domestic regulations, economic weakness and
expectations around ethical sourcing and social responsibility. Our ability to
anticipate and respond to these pressures is essential to protecting
operations, supporting our colleagues, and sustaining growth.
Customer offer Ongoing macroeconomic uncertainty and inflationary pressure on consumers has
led to significant change in consumer behaviour. Failure to respond to
changing consumer needs and to maintain a competitive offer will undermine our
ambition to increase market share and drive profitable and sustainable growth.
Product reputation and trust Our stakeholders expect us to deliver products that are safe, compliant with
legal and regulatory requirements, and fit for purpose. Our customers are
increasingly aware of the environmental and social impact of their purchases
and want to know that our products have been responsibly sourced and that
their environmental impact is minimised. Failure by our suppliers to uphold
our approach to business ethics, regulatory compliance, human rights
(including safety and modern slavery) and the environment may undermine or
damage our reputation as a responsible retailer and result in a loss of
confidence in Dunelm.
Business change Dunelm recognises that there is significant opportunity in digitalising the
business and has invested and will continue to invest in system improvements
to drive growth and efficiency. Failing to successfully introduce, deliver,
and leverage new technology and systems, along with the associated process,
organisational and people related changes across the business could result in
reduced operational efficiency, competitiveness, relevance and growth.
Furthermore, failure to deliver the expected objectives on time and on budget
and without effective engagement, training and support for colleagues could
risk delivery of the planned business benefits.
People and culture Our business could be adversely impacted if we fail to attract, retain, and
develop diverse colleagues with the appropriate skills and capabilities.
Failing to embed and live our values could impact business performance, the
delivery of our purpose and the long-term sustainability of our business.
IT systems, data and cyber security Our IT systems and infrastructure are critical to managing our operations,
interacting with customers, and trading successfully. A key system being
unavailable or suffering a security breach could lead to operational
difficulties, loss of sales and productivity, legal and regulatory penalties
due to loss of personal data, reputational damage, and loss of stakeholder
trust.
Regulatory and compliance We operate in an increasingly regulated environment and must comply with a
wide range of laws, regulations, and standards. Failure to comply with or take
appropriate steps to prevent a breach of these requirements could result in
formal investigations, legal and financial penalties, reputational damage and
loss of business.
Supply chain resilience We are dependent on complex global supply chains and fulfilment solutions to
deliver products to our customers. Instability in the global supply chain or
failure of a key supplier may impact our ability to effectively manage stock
and satisfy customer demand.
Finance and treasury Progress against business objectives may be constrained by a lack of
short-term funding or access to long-term capital.
Climate change and environment Failure to positively change our impact on the environment would fall short of
the expectations of our customers, colleagues, shareholders, and other
stakeholders which could lead to reputational damage and financial loss.
In addition, an inability to anticipate and mitigate climate change and other
environmental risks could cause disruption in the availability and quality of
raw materials such as cotton and timber, affecting production capacity,
product quality, and overall supply chain resilience. This, and potential
transition risks related to environmental taxation, could result in higher
costs, delays, and potential loss of customers.
Alternative performance measures (APMs)
APM Definition, purpose and reconciliation to statutory measure
Total sales Equivalent to revenue (from all channels). This is net of customer returns.
Digital sales Digital sales include home delivery, Click & Collect and tablet-based
sales in store.
Digital % total sales Digital sales (as defined above) expressed as a percentage of revenue. This is
not a measure that we seek to maximise in itself, but we measure it to track
our adaptability to changing customer behaviours.
Ordinary dividend cover Ordinary dividend cover is calculated as earnings per share divided by the
total ordinary dividend relating to the financial year. This measure is used
in our capital and dividend policy.
Gross margin % Gross profit expressed as a percentage of revenue. Measures the profitability
of product sales prior to operating costs.
Net operating costs Other operating income less operating costs. Measures the total cost base net
of operating income, which comprises rent from investment property and
insurance payments.
EBITDA Earnings before interest, tax, depreciation, amortisation and impairment.
Operating profit plus depreciation and amortisation of property, plant and
equipment, right-of-use assets and intangible assets plus loss on disposal and
impairment of property, plant and equipment and intangible assets. Used in our
capital and dividend policy.
Adjusted EBITDA EBITDA less depreciation on right-of-use assets. To measure compliance with
bank covenants.
EBITDAR EBITDAR is calculated as EBITDA plus rent. To measure compliance with bank
covenants.
Effective tax rate Taxation expressed as a percentage of profit before taxation. To measure how
close we are to the UK corporation tax rate and understand the reasons for any
differences.
Capex (net of disposals) Acquisition of intangible assets, property, plant and equipment and investment
properties, less proceeds on disposal of intangible assets, property, plant
and equipment and investment properties.
Free cash flow Free cash flow is defined as net cash generated from operating activities less
capex (net of disposals), net interest paid (including leases) and loan
transaction costs, and repayment of principal element of lease liabilities.
Measures the cash generated that is available for disbursement to
shareholders.
Net cash / (debt) Cash and cash equivalents less total borrowings (as shown in note 16).
Excludes IFRS 16 lease liabilities.
Cash conversion Free cash flow expressed as a percentage of operating profit.
Karen Witts
Chief Financial Officer
9 September 2025
Consolidated Income Statement
For the 52 weeks ended 28 June 2025
2025 2024
52 weeks
52 weeks
Note £'m £'m
Revenue 1 1,771.0 1,706.5
Cost of sales (842.7) (823.2)
Gross profit 928.3 883.3
Other operating income 4.7 -
Operating costs 2 (711.0) (670.0)
Operating profit 3 222.0 213.3
Finance income 5 1.4 2.0
Finance costs 5 (12.4) (9.9)
Profit before taxation 211.0 205.4
Taxation 6 (54.7) (54.2)
Profit for the period 156.3 151.2
Earnings per Ordinary Share - basic 8 77.2p 74.7p
Earnings per Ordinary Share - diluted 8 76.8p 74.4p
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 28 June 2025
2025 2024
52 weeks
52 weeks
Note £'m £'m
Profit for the period 156.3 151.2
Other comprehensive (expense) / income:
Items that may be subsequently reclassified to profit or loss:
Movement in fair value of cash flow hedges (21.5) 0.2
Deferred tax on hedging movements 3.0 (1.0)
Other comprehensive expense for the period, net of tax (18.5) (0.8)
Total comprehensive income for the period 150.4
137.8
Consolidated Statement of Financial Position
As at 28 June 2025
Note 28 June 29 June
2025
2024
£'m £'m
Non-current assets
Intangible assets 9 10.8 3.8
Property, plant and equipment 10 178.7 173.0
Right-of-use assets 11 221.1 222.9
Investment property 12 29.5 7.5
Deferred tax assets 3.2 1.8
Derivative financial instruments - 0.1
Total non-current assets 443.3 409.1
Current assets
Inventories 13 226.3 223.0
Trade and other receivables 14 40.1 26.2
Derivative financial instruments - 0.3
Current tax asset 1.8 -
Cash and cash equivalents 30.0 23.4
Total current assets 298.2 272.9
Total assets 741.5 682.0
Current liabilities
Trade and other payables 15 (220.0) (205.0)
Lease liabilities 11 (53.1) (52.1)
Current tax liability - (1.5)
Derivative financial instruments (13.3) (4.9)
Total current liabilities (286.4) (263.5)
Non-current liabilities
Bank loans 16 (130.2) (77.0)
Lease liabilities 11 (194.4) (197.5)
Provisions (7.7) (5.5)
Derivative financial instruments (4.0) (0.6)
Total non-current liabilities (336.3) (280.6)
Total liabilities (622.7) (544.1)
Net assets 118.8 137.9
Equity
Issued share capital 2.0 2.0
Share premium account 1.7 1.7
Capital redemption reserve 43.2 43.2
Hedging reserve (13.0) (3.8)
Retained earnings 84.9 94.8
Total equity attributable to equity holders of the Parent 118.8 137.9
Consolidated Statement of Cash Flows
For the 52 weeks ended 28 June
2025
Note 2025 2024
52 weeks
52 weeks
£'m £'m
Cash flows from operating activities
Profit before taxation 211.0 205.4
Net financial expense 5 11.0 7.9
Operating profit 222.0 213.3
Depreciation and amortisation of investment property, property, plant and 9,10,12 31.3 30.4
equipment, and intangible assets
Depreciation of right-of-use assets 11 50.9 50.2
Loss on disposal and impairment of property, plant and equipment and 9,10 0.5 0.5
intangible assets
Impairment of right-of-use assets 11 0.7 0.9
Share-based payments expense 5.5 4.3
Operating cash flows before movements in working capital 310.9 299.6
(Increase) in inventories (1.4) (12.0)
(Increase) in trade and other receivables (13.5) (1.9)
Increase / (decrease) in trade and other payables 14.4 (3.8)
Net movement in working capital (0.5) (17.7)
Tax paid (54.5) (49.6)
Net cash generated from operating activities 255.9 232.3
Cash flows from investing activities
Acquisition of intangible assets (9.3) (2.6)
Acquisition of property, plant and equipment (35.2) (29.8)
Acquisition of Investment Property (22.3) (7.5)
Acquisition of subsidiary, net of cash (0.5) -
Interest received 1.4 1.6
Net cash used in investing activities (65.9) (38.3)
Cash flows from financing activities
Proceeds from issue of treasury shares and Ordinary Shares 0.7 0.1
Purchase of treasury shares (14.7) -
Drawdowns on Revolving Credit Facility 152.0 110.0
Repayments of Revolving Credit Facility (99.0) (108.0)
Interest paid and loan transaction costs (4.7) (4.9)
Interest paid on lease liabilities 11 (7.3) (6.1)
Repayment of principal element of lease liabilities (50.6) (50.8)
Dividends paid 7 (159.4) (157.6)
Net cash used in financing activities (183.0) (217.3)
Net increase/(decrease) in cash and cash equivalents 7.0 (23.3)
Foreign exchange revaluations (0.4) 0.4
Cash and cash equivalents at the beginning of the period 23.4 46.3
Cash and cash equivalents at the end of the period 30.0 23.4
Consolidated Statement of Changes in Equity
For the 52 weeks ended 28 June 2025
Note Issued share capital Share premium account Capital redemption reserve Hedging reserve Retained earnings Total equity attributable to equity holders of the Parent
£'m £'m £'m £'m £'m £'m
As at 1 July 2023 2.0 1.7 43.2 (6.9) 97.5 137.5
Profit for the period - - - - 151.2 151.2
Movement in fair value of cash flow hedges - - - 0.2 - 0.2
Deferred tax on hedging movements - - - (1.0) - (1.0)
Total comprehensive income for the period - - - (0.8) 151.2 150.4
Proceeds from issue of treasury shares - - - - 0.1 0.1
Purchase of treasury shares - - - - - -
Share-based payments - - - - 4.3 4.3
Deferred tax on share-based payments - - - - (1.3) (1.3)
Current tax on share options exercised - - - - 0.6 0.6
Movement on cash flow hedges transferred to inventory - - - 3.9 - 3.9
Dividends paid 7 - - - - (157.6) (157.6)
Total transactions with owners, recorded directly in equity - - - 3.9 (153.9) (150.0)
As at 29 June 2024 2.0 1.7 43.2 (3.8) 94.8 137.9
Profit for the period - - - - 156.3 156.3
Movement in fair value of cash flow hedges - - - (21.5) - (21.5)
Deferred tax on hedging movements - - - 3.0 - 3.0
Total comprehensive income for the period - - - (18.5) 156.3 137.8
Proceeds from issue of treasury shares - - - - 0.7 0.7
Purchase of treasury shares - - - - (14.7) (14.7)
Share-based payments - - - - 5.5 5.5
Deferred tax on share-based payments - - - - 1.0 1.0
Current tax on share options exercised - - - - 0.7 0.7
Movement on cash flow hedges transferred to inventory - - - 9.3 - 9.3
Dividends paid 7 - - - - (159.4) (159.4)
Total transactions with owners, recorded directly in equity - - - 9.3 (166.2) (156.9)
As at 28 June 2025 2.0 1.7 43.2 (13.0) 84.9 118.8
Consolidated Accounting Policies
For the 52 weeks ended 28 June 2025
Basis of preparation
The financial statements presented cover a 52-week trading period for the
financial period ended 28 June 2025 (2024: 52-week period ended 29 June 2024).
The annual report and financial statements for the period ended 28 June 2025
were approved by the board of directors on 9 September 2025 along with this
preliminary announcement but have not yet been delivered to the Registrar of
Companies. The financial information contained in this preliminary
announcement does not constitute the Group's statutory accounts within the
meaning of Section 434 of the Companies Act 2006.
The auditor's report on the statutory accounts for the period ended 28 June
2025 was unqualified and did not contain a statement under section 498 of the
Companies Act 2006.
The statutory accounts of Dunelm Group plc for the period ended 29 June 2024
have been delivered to the Registrar of Companies. The auditor's report on the
statutory accounts for the period ended 29 June 2024 was unqualified and did
not contain a statement under section 498 of the Companies Act 2006.
1. Revenue
The Group has one reportable segment, which is the operations to enable the
retail of homewares in the UK and Ireland.
The Group operates a unified retail business model, offering homewares and
furniture products through an integrated multichannel platform. Customers
engage with the Group across various touchpoints including physical stores,
the website, and customer service channels and their journeys can span
multiple channels before completing a purchase. Given this interconnected
customer experience, the Group does not distinguish between the different
operations. Instead, performance is monitored and reported at the Group
level, reflecting the holistic nature of the retail proposition.
This approach aligns with how strategic decisions are made, resources are
allocated, and performance is evaluated by the Chief Operating Decision-maker.
All activities-whether in-store, online, or via support functions-contribute
to a single, cohesive retail offering aimed at delivering value and
convenience to customers.
The Chief Operating Decision-maker is the Executive Board of Dunelm Group plc.
The Executive Board reviews internal management reports on a monthly basis and
performance is assessed based on a number of financial and non-financial KPIs
as well as on profit before taxation.
Management believes that these measures are the most relevant in evaluating
the performance of the Group and for making resource allocation decisions.
All material operations of the Group are carried out in the UK. The Group's
revenue is driven by the consolidation of individual small value transactions
and as a result, Group revenue is not reliant on a major customer or group of
customers.
At the period end the Group had £15.8m (2024: £12.5m) of sales orders placed
that will be recognised in the Consolidated Income Statement when the goods
are despatched in the following financial period.
2. Operating costs
2025 2024
52 weeks
52 weeks
£'m £'m
Selling and distribution costs 560.5 528.6
Tech and Support expenses 150.5 141.4
711.0 670.0
3. Operating profit
Operating profit is stated after charging the following items:
2025 2024
52 weeks
52 weeks
£'m £'m
Cost of inventories included in cost of sales 831.6 812.3
Amortisation of intangible assets 2.3 4.1
Depreciation of owned property, plant and equipment 28.7 26.3
Depreciation of Investment Property 0.3 -
Depreciation of right-of-use assets 50.9 50.2
Loss on disposal and impairment of property, plant and equipment and 0.5 0.5
intangible assets
Impairment of right-of-use assets 0.7 0.9
Expense related to short-term leases 4.7 3.7
The cost of inventories included in cost of sales includes the impact of a net
decrease in the provision for obsolete inventory of £6.0m (2024: £0.6m
increase).
The analysis of the auditor's remuneration is as follows:
2025 2024
52 weeks
52 weeks
£'000 £'000
Fees payable to the Group's auditor for the audit of the Parent and 43 37
consolidated annual financial statements
Fees payable to the Group's auditor and its associates for other services to
the Group
- Audit of the Company's subsidiaries pursuant to legislation 352 322
- Other assurance services 67 50
4. Employee numbers and costs
The average monthly number of people employed by the Group (including
Directors) was:
2025 2025 2024 2024
52 weeks
52 weeks
52 weeks
52 weeks
Number Full time Number Full time
of heads
equivalents
of heads
equivalents
Selling 9,973 5,420 9,591 5,258
Distribution 1,139 1,105 1,148 1,110
Administration 1,196 1,178 1,170 1,153
12,308 7,703 11,909 7,521
The aggregate remuneration of all employees (including Directors) comprises:
2025 2024
52 weeks
52 weeks
£'m £'m
Wages and salaries 275.4 248.0
Social security costs 21.2 17.6
Share-based payment expense 5.5 4.3
Other pension costs 7.3 6.9
309.4 276.8
5. Finance income and costs
2025 2024
52 weeks
52 weeks
£'m £'m
Finance income
Interest on bank deposits 1.4 1.6
Net foreign exchange gains - 0.4
1.4 2.0
Finance costs
Interest on bank borrowings (4.1) (3.0)
Net foreign exchange losses (0.4) -
Amortisation of issue costs of bank loans (0.6) (0.8)
Interest on lease liabilities (7.3) (6.1)
(12.4) (9.9)
Net finance expense (11.0) (7.9)
6. Taxation
2025 2024
52 weeks
52 weeks
£'m £'m
Current taxation
UK corporation tax charge for the period 53.2 51.8
Adjustments in respect of prior periods (1.4) (0.4)
51.8 51.4
Deferred taxation
Origination of temporary differences 2.9 2.9
Adjustments in respect of prior periods - (0.1)
2.9 2.8
Total tax expense 54.7 54.2
The tax expense is reconciled with the standard rate of UK corporation tax as
follows:
2025 2024
52 weeks
52 weeks
£'m £'m
Profit before taxation 211.0 205.4
UK corporation tax at standard rate of 25.0% (2024: 25.0%) 52.8 51.4
Factors affecting the charge in the period:
Non-deductible expenses 3.3 3.2
Adjustments in respect of prior periods (1.4) (0.5)
Profit on disposal of ineligible assets - 0.1
Tax expense 54.7 54.2
The taxation expense for the period as a percentage of profit before tax is
25.9% (2024: 26.4%).
Pillar Two legislation has been enacted or substantively enacted in certain
jurisdictions in which the Group operates. The legislation is effective for
the Group's financial year beginning 30 June 2024. The Group has performed an
assessment of the Group's potential exposure to Pillar Two income taxes. This
assessment is based on the most recent information available regarding the
financial performance of the constituent entities in the Group. Based on the
assessment performed the Group meets the requirements for safe harbour
provisions for Ireland in which the tax rate is currently 12.5% and as such no
top up tax is due here. All other jurisdictions in which the Group operates
are above 15% and management is not currently aware of any circumstances under
which this might change. Therefore, the Group does not expect a potential tax
liability in relation to Pillar Two top up taxes. The Group applies the
exception to recognising the and disclosing information about deferred tax
assets and liabilities related to Pillar Two income taxes, as provided in the
amendments to IAS12 issued in May 2023.
7. Dividends
The dividends set out in the table below relate to the 1 pence Ordinary
Shares:
2025 2024
52 weeks
52 weeks
Dividend type In respect of period ended Pence per share £'m £'m
Final 1 July 2023 27.0 - 54.5
Interim 29 June 2024 16.0 - 32.3
Special 29 June 2024 35.0 - 70.8
Final 29 June 2024 27.5 55.6 -
Interim 28 June 2025 16.5 33.4 -
Special 28 June 2025 35.0 70.4 -
159.4 157.6
The Board is proposing a final dividend of 28 pence per Ordinary Share for the
period ended 28 June 2025 which equates to £56.4m. Subject to shareholder
approval at the AGM this will be paid on 25 November 2025 to shareholders on
the register at the close of business on 31 October 2025. The Ordinary Shares
will be quoted ex dividend on 30 October 2025. The proposed dividend is not
recognised as a liability at year end.
8. Earnings per Ordinary Share
Basic earnings per share is calculated by dividing the profit for the period
attributable to equity holders of the Company by the weighted average number
of Ordinary Shares in issue during the period, excluding Ordinary Shares
purchased by the Company and held as treasury shares.
For diluted earnings per share, the weighted average number of Ordinary Shares
in issue is adjusted to assume conversion of all dilutive potential Ordinary
Shares. These represent share options granted to employees where the exercise
price is less than the average market price of the Group's Ordinary Shares
during the period.
2025 2024
52 weeks
52 weeks
£'m £'m
Profit for the period 156.3 151.2
2025 2024
52 weeks
52 weeks
'000 '000
Weighted average number of shares in issue during the period 202,366 202,355
Impact of share options 1,019 893
Number of shares for diluted earnings per share 203,385 203,248
Earnings per Ordinary Share 2025 2024
52 weeks
52 weeks
£p £p
Basic (pence) 77.2 74.7
Diluted (pence) 76.8 74.4
9. Intangible assets
Software Rights to brands and customer lists Total
development
and licences
£'m £'m £'m
Cost
At 1 July 2023 52.0 11.5 63.5
Additions 2.6 - 2.6
Disposals (0.2) - (0.2)
At 29 June 2024 54.4 11.5 65.9
Additions 2.3 7.0 9.3
At 28 June 2025 56.7 18.5 75.2
Accumulated amortisation
At 1 July 2023 47.1 11.1 58.2
Charge for the financial period 4.0 0.1 4.1
Disposals (0.2) - (0.2)
At 29 June 2024 50.9 11.2 62.1
Charge for the financial period 2.1 0.2 2.3
At 28 June 2025 53.0 11.4 64.4
Net book value
At 1 July 2023 4.9 0.4 5.3
At 29 June 2024 3.5 0.3 3.8
At 28 June 2025 3.7 7.1 10.8
All amortisation is included within operating costs in consolidated income
statement.
Management's review of indicators of impairment did not result in the
recognition of any impairment in the period (2024: £nil).
Within software development and licences there were £2.2m additions (2024:
£2.4m additions) relating to internally generated assets.
Within rights to brands and customers lists £7.0m additions (2024: £nil)
relating to acquired intellectual property and brands.
10. Property, plant and equipment
Freehold land and buildings Leasehold land and buildings Leasehold improvements Fixtures, fittings and equipment Total
£'m £'m £'m £'m £'m
Cost
At 1 July 2023 107.0 - 167.2 140.3 414.5
Transfer (0.2) - 0.2 - -
Additions 0.3 - 13.4 15.8 29.5
Disposals - - (6.8) (4.3) (11.1)
At 29 June 2024 107.1 - 174.0 151.8 432.9
Transfer - - 0.2 (0.2) -
Additions 8.9 0.2 10.7 15.1 34.9
Disposals (0.1) - (1.2) (1.3) (2.6)
At 28 June 2025 115.9 0.2 183.7 165.4 465.2
Accumulated depreciation
At 1 July 2023 21.8 - 105.1 117.7 244.6
Charge for the financial period 1.8 - 14.0 10.5 26.3
Disposals - - (6.7) (4.1) (10.8)
Impairment - - (0.1) (0.1) (0.2)
At 29 June 2024 23.6 - 112.3 124.0 259.9
Charge for the financial period 2.7 - 13.9 12.1 28.7
Disposals (0.1) - (0.2) (0.4) (0.7)
Impairment - - (0.6) (0.8) (1.4)
At 28 June 2025 26.2 - 125.4 134.9 286.5
Net book value
At 1 July 2023 85.2 - 62.1 22.6 169.9
At 29 June 2024 83.5 - 61.7 27.8 173.0
At 28 June 2025 89.7 0.2 58.3 30.5 178.7
All depreciation charges have been included within operating costs in the
Consolidated Income Statement.
The impairment charge of £(1.4)m recognised in the period (2024: £(0.2)m) is
for assets currently not in use.
11. Leases
Right-of-use assets included in the Consolidated Statement of Financial
Position at 28 June 2025 were as follows:
2025 2025 2025 2024
Land and buildings Motor vehicles, plant and equipment Total Total
£'m £'m £'m £'m
At the beginning of the period 201.7 21.2 222.9 231.3
Additions 40.0 9.9 49.9 44.6
Disposals (0.1) - (0.1) (1.9)
Impairment (0.7) - (0.7) (0.9)
Depreciation (44.6) (6.3) (50.9) (50.2)
At the end of the period 196.3 24.8 221.1 222.9
Right-of-use additions included £(0.6)m of lease modifications in the period
(2024: £5.2m).
The impairment charge of £(0.7)m (2024: £(0.9)m) relates to impairment in
respect of leases for properties currently not in use.
Lease liabilities included in the Consolidated Statement of Financial Position
at 28 June 2025 were as follows:
2025 2025 2025 2024
Land and buildings Motor vehicles, plant and equipment Total Total
£'m £'m £'m £'m
At the beginning of the period (228.1) (21.5) (249.6) (258.2)
Additions (42.4) (9.5) (51.9) (46.2)
Disposals 0.1 - 0.1 1.9
Interest (6.2) (1.1) (7.3) (6.1)
Repayment of lease liabilities 54.7 6.5 61.2 59.0
At the end of the period (221.9) (25.6) (247.5) (249.6)
The discount rate applied across all lease liabilities ranged between 0.90%
and 6.76% (2024: 0.90% and 6.76%). The discount rate is determined at the
inception of the lease and the rate reflects our incremental borrowing rate
which we assess by considering the marginal rate on the Group's Revolving
Credit Facility ('RCF'), the Bank of England base rate, the yield on
Government bonds and the term of the lease.
12. Investment Properties
Investment Properties
£'m
Cost
At 29 June 2024 7.5
Additions 22.3
At 28 June 2025 29.8
Accumulated amortisation / depreciation
At 29 June 2024 -
Charge for the financial period 0.3
At 28 June 2025 0.3
Net book value
At 29 June 2024 7.5
At 28 June 2025 29.5
In July 2024, the Group purchased a freehold tenanted retail property in an
attractive location for £22.3m, as it was acquired in the year, no external
valuation has been performed for the period ended 28 June 2025. We expect to
convert this into a Dunelm store in the future.
Investment properties are stated at cost less accumulated depreciation. As at
28 June 2025, all amortisation and depreciation charges have been included
within operating costs in the Consolidated Income Statement.
The external valuation for the property purchased in 2024 was performed by a
professionally qualified, independent valuer. The valuation conforms to
International Valuation Standards and UK national supplement (the 'Red Book').
The valuation was arrived at by reference to market evidence of the
transaction prices paid for similar properties. In estimating the fair value
of the properties, the valuers consider the highest and best use of the
properties.
The fair value of each property has been assessed as being materially in line
with the historical costs.
At 28 June 2025 investment properties rental income was £1.5m included within
other operating income in the Consolidated Income Statement.
13. Inventories
2025 2024
£'m £'m
Raw materials 0.9 1.3
Work in progress 0.1 0.1
Goods for resale 225.3 221.6
226.3 223.0
Goods for resale includes a net realisable value provision of £15.3m (2024:
£21.3m). Write-downs of inventories to net realisable value amounted to
£20.9m (2024: £30.7m). These were recognised as an expense during the period
and were included in cost of sales in the Consolidated Income Statement.
14. Trade and other receivables
2025 2024
£'m £'m
Trade receivables 9.6 3.7
Other receivables 3.6 0.4
Prepayments 13.8 11.6
Accrued income 13.1 10.5
40.1 26.2
All trade receivables are due within one year from the end of the reporting
period.
No impairment was incurred on trade and other receivables during the period
and the expected credit loss provision held at period end is £nil (2024:
£nil). No material amounts are overdue (2024: £nil).
15. Trade and other payables
2025 2024
£'m £'m
Trade payables 93.7 92.3
Accruals 79.6 67.3
Deferred income 15.8 12.5
Taxation and social security 30.8 32.3
Other payables 0.1 0.6
220.0 205.0
16. Bank loans
2025 2024
£'m £'m
Total borrowings 132.0 79.0
Less: unamortised debt issue costs (1.8) (2.0)
Net borrowings 130.2 77.0
17. Commitments & Contingent liabilities
As at the period end date, the Group had entered into capital contracts for
technology, new stores and refits amounting to £5.9m (2024: £1.5m).
The Group had no contingent liabilities at the period end date (2024: £nil).
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