The new chief of homeware retailer Dunelm Nick Wilkinson started City life on the back foot on Tuesday as he saw its shares slide on squeezed margins.
The retailer, which sells cushions, bedding and furniture, said its profit margins dropped in the second half to December 30.
Pre-tax profits fell to £60 million from £65 million a year ago.
The shares were down 81.5p, or 12.61%, to 565p.
This was due, in part, to Dunelm’s acquisition of loss-making online retailer Worldstores and leftover stock at the end of the year.
Chairman Andy Harrison, however, defended the £1 acquisition, made in 2016. “We bought a business that was loss-making. We’ve made massive progress to turn it around.” He added that the deal has helped lift online orders, taking total revenues up to £545.4 million from £460 million the year before.
Dunelm sought to reassure the City by increasing its dividend by 7.7% to 7p, adding that it expects “a more stable margin” in the second half and profit to grow.
Wilkinson, previously chief executive of Evans Cycles, has been at the helm for 20 days.
He replaced John Browett, who shocked shareholders with his sudden departure in August.
Its chief financial officer Keith Down said today he will step down in June to move closer to his family home.
