The Adderley family know how to keep Dunelm Mill’s shareholders on side. The Leicester-based homewares retailer is planning to return nearly £66 million to shareholders as it continues to build up a large cash balance.
The return of capital is equivalent to 32.5p per ordinary share and is in addition to the £20.2 m illion ordinary share dividend of 10p a share for the period up to June 30, 2012. Put simply, the company generates a huge cash flow – more than it needs for its investment and growth strategy, so it is returning the cash to its shareholders.
Dunelm Mill continues to be hugely successful and has ridden out the recession with impressive performances.
The company which the Adderley family founded 33 years ago is growing revenues and profits beyond expectations, while continuing a steady stream of store openings.
In the year to June 2012, the Adderleys’ retail chain reported pre-tax profits up by 15 per cent to more than £96 million. This comes on top of significant growth in the previous year two years. Revenues for the year reached £603.7 million, up 12.1 per cent on the 2011 figure of £538.5 million.
The firm has ambitious plans for the future, intending to increase its number of stores in the UK to 200. The retailer currently has 127 stores, including 118 superstores.
Maintaining sustained growth has meant a big increase in the value of the Leicester-based company which has been led by Mr Adderley for the last 16 years. The firm is now worth well over £1 billion with the Adderley family stake valued at £557 million.
In February 2011 Mr Adderley decided to step down as chief executive to take on a more focused role, carrying the title of executive deputy chairman. West Bromwich-born Nick Wharton, formerly finance director at Halfords, took on the chief executive role, and puts the company’s continuing success down to value for money and retailing excellence.
The company – with its slogan “Simply Value for Money” - has a new high-tech energy efficient headquarters building on the Watermead Business Park in Leicester.
The decision by Mr Adderley – who owns 35 per cent of the business - and his parents Bill and Jean to float Dunelm for £340 million seems a shrewd one. Since flotation in October 2006, the company has expanded rapidly, enjoying a big demand for its soft furnishing products. This has meant big dividends for the family and Dunelm shareholders.
The enterprise, which trades under the Dunelm Mill brand and also includes the Dorma bedding and housewares name, began life as a curtain stall run by Bill and Jean Adderley in a Leicester market. Now it employs almost 5000 people and is growing by the month.
Bill and Jean Adderley opened their first Dunelm store in Churchgate, Leicester in 1984. Their first superstore opened in Rotherham in 1991.
Now Dunelm has stores in town centres and out-of-town locations from Aberdeen in the north to Plymouth in the south, with more planned this year and older stores being refurbished. The company also has a bespoke manufacturing operation and an online business. The company and its staff raise a great deal of money for charity.
Mr Adderley puts the family firm’s success down to high footfalls at its out-of-town locations, a strong management team and the successful commissioning of a central warehouse in Stoke-on-Trent.
Forty-one year-old Will Adderley took over day to day control of the business from his father in 1996. His mother Jean netted £102 million from the sale of her 30 per cent stake in the company. Mr Adderley’s father and mother retain a 24 per cent stake.
Will joined the business in 1993 after gaining a degree in industrial economics at Nottingham University.