Dunelm gives shareholders £132m payout from bumper year
Homewares chain Dunelm has announced plans to hand a £132 million payout to shareholders after profits soared despite the pandemic closing stores.
But bosses at the firm said there are still no plans to hand back any of the £22 million saved from the Government’s business rates holiday.
The company pointed out it has already repaid the money claimed under the furlough scheme, and has not made any claims under the various grants some retailers have been entitled to.
Different retailers will make different choices about what’s the right balance to take and we think as a business that was closed for a third of the year, this is a balanced position
Its decision comes as the boss also said prices have started to rise as a result of inflationary pressures hitting supply chains and that Dunelm has been offering incentives to HGV drivers to keep trucks moving.
On business rates, chief executive Nick Wilkinson told the PA news agency: “We’ve looked at it in the round. It’s a complicated area and we’ve really considered what’s the right thing to do here. We’re taking a balanced approach.
“We repaid the CJRS (coronavirus job retention scheme) money which we took out in lockdown one. It was a scheme that allowed us to keep going and stay focused.
“We self-funded 8,000 store colleagues on full pay when the stores were closed to customers, we’re not taking advantage of local grants, which were given to non-essential retailers.”
He added: “The business rates relief was applied to all retailers, essential and non-essential. Different retailers will make different choices about what’s the right balance to take and we think as a business that was closed for a third of the year, this is a balanced position.”
Several essential retailers have already repaid the savings made from the business rates holiday introduced during the pandemic, but there have also been a handful of non-essential retailers who made partial payments too, including fashion chain Next.
Dunelm was classed as a non-essential retailer, but managed a strong year despite the closures, with online sales holding up well and click-and-collect services still offered from the front of stores.
In the year to June 26 sales rose 26.3% to £1.34 billion, with pre-tax profits up 44.6% to £157.8 million. Digital sales were 46% of the total, up from 27% a year earlier.
As a result, shareholders will receive a dividend of 35p a share and a 65p a share special dividend. The dividend was scrapped a year earlier at the height of the pandemic.
Bosses said they have seen sales rise across the board and continue to be strong in the first 10 weeks of the new financial year, with emphasis placed on digital innovation.
The company also benefited when stores reopened from being primarily based in retail parks, which have outperformed high streets and shopping centres since Covid-19 restrictions eased.
But Mr Wilkinson said cost pressures from inflation – with global shipping costs, the Brexit-related HGV drivers shortage and rising raw material prices all playing a part.
He said: “We work really hard to try and absorb as much of that as possible in our price structure, so we don’t pass prices on to consumers.
“But that’s not always possible, so we’re super focused on value for money, but we are taking up some retail prices where that’s the necessary thing to do. When we put a price up we’re very clear about that. We don’t go up and down.”
He added: “Most of the inflation pressures you hear about are mitigated within the system, but when we can’t do it fully, and we think it’s necessary to do and we think it doesn’t reduce our value for money and competitiveness, we pass prices on to consumers, and that’s what has started to happen.”