Dunelm Group
PLC Annual Report KCQs
My KCQs followed from reading the annual
report twice. You can find this report here:
If you follow my Blog there is a brief
description of Dunelm, along with some interesting facts and information. You
can find my blog here:
Dunelm Group PLC and their Annual Report for
2013 is simple, bright and positive. As the second cover page so confidently
states “Welcome to the UK’s number one homewares retailer”, I can’t help but
feel relaxed by the homey backgrounds and neutral colours which flow
throughout. Page 1 hits you with the year’s highlights which seem pretty
impressive, as one of the first thing I learnt about accounting is that a good
cash flow is what everyone wants. Dunelms last financial year appears to be
their biggest yet after what appears to be an extremely successful boom in its
previous 4 financial years. Now, as many of my peers have found, these 100 page
plus documents seem like they’re just filled with gobbledigook. From my own
perspective I found it difficult to sit down and read through the whole thing,
but as dicussed in the chapter 3 reading, I found it quite easy to relate the
report to a living breathing person.
Now if Dunelm was a person and the report was
my link to meeting them, I’d be making sure I got on their bandwagon ASAP. The
key direction I picked up from the report was that, after a few successful years,
Dunelm has been able to progress to a point where it can now focus on expansion
of its facilities (superstores) and development of its infrastructure. It was
relatively easy to find their continuing strategic priorities, which are:
-
Develop our
specialist proposition
-
Expand our
Store Portfolio
-
Grow
multi-channel
-
Develop and
exploit our infrastructure.
To be slightly ego-damagingly honest I didn’t
fully understand how all of those goals will help make more money for the
company. However after reading through the section on key risks and
uncertainties, I feel a little more at ease for myself and for Dunelm as well.
It appears that there is an increase in the market for Dunelm’s home-ware
products (this is something I’m looking into as further research for this
company), hence the growth in Dunelm’s profits. Dunelm is currently rolling out
upgrades to their customer service infrastructure and mainly their online
shopping and home-ware planning services. These all seemed like long-term
projects that Dunelm felt comfortable investing in. Like for example I know
that my own company Herron Todd White is rolling out a new operating system
within our company which will affect everything from mail to calendars to
reports etc. and this is a three year-long project.
The CSR section of the report, which I
thought was a very important section, was probably the most interesting part
for me. From customers, to colleagues and through the range to the environment,
eliminating risk seemed to be another key area of focus for Dunelm in 2013.
As they are a British based company I don’t
really hear much about them aside from the web. Although I am keen on geography
and it does strike me to how big this company really is in the UK (as per the
map on page 3). Mind you, I’m a sucker for the awesome facts and fantastic
figures which these financial statements spam at you in pretty colours and
pictures. Overall the report was concise, easy to understand and really relays
the good news of Dunelms success over the last financial year.
Identify areas of your firm's
financial statements you are having difficulty understanding:
-
I don’t really understand the Financial and Treasury Goals
-
I also struggled with all the terminology like “specialist proposition”.
-
There wasn’t much else I didn’t understand! A lot of clarification was
found in the accounting policies.
Areas of its business that seem
most important or critical to you?
-
I think Dunelm’s business model shows the 4 key areas for the company:
Develop, Buy, Ship and Sell.
-
A key strength of the business is its cash generation and zero debt.
-
As outlined by a graph from a survey, customers found that the range of
home-wares and their affordability was a key driver in sales.
What key challenges does the firm
appears to be facing?
-
Dunelm’s key challenges appear to be Risk and Expansion.
-
Risk is present in their company via market fluctuations, competitors
and especially OHS.
-
Failure to maintain competitiveness could result in losses.
-
If the specialist proposition fails there is a risk that consumers could
lose faith in the brand.
How successful does your company
appear to be in meeting these challenges?
-
The most
obvious gauge of Dunelm’s success it’s continuous growth and profit.
-
With even
more expansion plans and development for the future, Dunelm appears to be quite
successful so far in maintaining its foothold as the UK’s number 1 home-ware
retailer.
