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Dunelm - Rain-sodden consumers buy more homewares

August 2012

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • DNLM
  • Price:
  • 573p
Dunelm, the retailer of homewares,  has established a reputation as a "boring" growth stock - the kind of boring we like with the company just issuing a strong full year update ahead of results on 13 September. It has clearly benefited from the unseasonably wet weather, which has driven rain sodden consumers to its out of town stores during Q4 when like-for-like sales surged up 10.4%. Consequently, for the year to 30 June, it said overall like-for-like sales improved to 3.1%. Including 14 new superstores opened in the period (to leave 115), overall sales were up 12.1% to £604m. Gross margins are said to have also shown a small improvement (20-30 basis points) whilst net cash has ballooned to £60m.Ten more stores incl ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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