Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Dunelm Group
Another set of bumper numbers from Dunelm LON:DNLM have been released this morning, covering the quarter to 26th September. Sales jumped 36% from a year earlier, with the proportion of digital sales advancing to 29.7%, up from 17.6%. With the benefit of hindsight, Dunelm’s push into a proper multi-channel strategy couldn’t have been more timely. Margins also improved as a result of less discounting and the net cash position advanced by £200m, too. The company however remains cautious over the outlook, with macroeconomic headwinds and the ongoing challenge of the COVID virus clouding its ability to provide any guidance.
Marston’s
There’s a year end trading update from Marston’s LON:MARS out today, which paints an interesting picture. The pub sector was forced to close for 15 weeks, resulting in a 30% decline in group sales for the year. Support was seen from beer sales through the ‘off trade’ and in the 13 weeks since reopening, pub sales were just 10% lower. However fresh local restrictions are undermining confidence and weighing on the outlook. Cash which is set to be realised from the sale of Marston’s Beer Company into a JV with Carlsberg will provide valuable liquidity and could prove pivotal for the business.
AO World
AO World [LON:AO] has published a half year trading update, covering the six months to September 30th. The company notes a step change in online penetration following the COVID lockdown, with sales holding up despite physical stores reopening. Group revenues are 57% ahead of the previous year’s position, with notable growth being seen in the nascent German division as it moves towards profitability. Assuming current customer behaviours stick – and the macroeconomic headwinds don’t become too strong – then it’s difficult to see why this wouldn’t bode well for the company in the medium term.
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