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Dunelm defers FY'20 earnings outlook due to coronavirus uncertainty

U.K-based homeware retailer Dunelm Group PLC said March 24 it will not provide financial guidance for full year 2020 and beyond due to the uncertainty resulting from the coronavirus outbreak.

The group said its board has decided to fully draw down against its revolving credit facility due to the heightened uncertainty and will place surplus cash on deposit.

The group has access to £175 million of financing facilities through a committed revolving credit facility of £165 million and a £10 million overdraft. Its net cash position was £11 million as of March 21.

Dunelm also decided to cancel its interim dividend payable in April but said its "capital policy is unchanged and we remain committed to returning surplus cash to our shareholders."

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The furniture-maker also closed all its stores, beginning March 23, with plans of temporarily shutting down all of its customer-facing operations, in compliance with the British government's stricter lockdown measures.

Dunelm added that its board has taken immediate steps to protect the company's cash flow, including waiving their nonexecutive fees or take cuts in their executive pay for the next three months.

For the first 10 weeks of the third quarter ended March 7, Dunelm's comparable sales were up 6.5% and gross margin also continued to improve year on year.

However, over the past two weeks ended March 21, comparable sales were down 8.8%, driven by a reduction in footfall as a result of the COVID-19 pandemic.