Insider Buying

Insider Buying Report: Dunelm Group PLC (DNLM:LN)

Dunelm Group PLC
(DNLM:LN)
12 months:
-31.87%
Activity:
Bullish
Pattern:
Large purchase from Chairman
News:
Q3 update
Dunelm Group PLC
(DNLM:LN)
12 months:
-31.87%
Activity:
Bullish
Pattern:
Large purchase from Chairman
News:
Q3 update

Top-level corporate insiders such as CEOs and Chairmen tend to have the most up-to-date information on their businesses. If they’re buying company stock, it’s generally a sign that the outlook for the security is attractive.

In this report, we are going to highlight some buying from a top-level insider at Dunelm Group PLC (DNLM:LN). Dunelm is a UK-based home furnishing retailer that has around 175 stores across the country. Specializing in furniture, curtains and blinds, bedding, and lighting, it offers over 50,000 products. The company is listed on the London Stock Exchange and currently has a market capitalization of £2.1 billion.

Dunelm Group: Insider Buying

Our insider transaction data shows that on April 19, Chairman Andy Harrison purchased 28,214 shares at a price of £10.55 per share. This trade cost the insider £297,658 and increased his holding to 444,694 shares.

Trading Skill

This trading activity is worth highlighting for several reasons. Firstly, Mr. Harrison has made a large purchase. Our data shows that this trade represents the largest insider purchase at Dunelm in nearly four years.

Secondly, Mr. Harrison has demonstrated the ability to time purchases well in the past. Back in May 2018, he picked up 92,452 Dunelm shares at a price of £5.47 per share. Over the next 12 months, the share price rose about 50%.

Strong Growth

A recent trading update from Dunelm showed that the company has strong momentum at the moment.

For the 13-week period to 26 March, total sales came in at £399 million, up 69% year on year and up 40% on a two-year basis. Meanwhile, gross margin increased by 30bps compared to the same period a year earlier.

The group noted that performance had been strong across all channels, and that digital sales for the quarter represented 35% of total sales, up from 33% in the prior two quarters.

Looking ahead, management was confident that the company can continue to grow, noting that its new facilities for e-commerce and furniture fulfilment are now fully operational.

“The resilience of the Dunelm business model and the ability of our colleagues to adapt quickly to changing circumstances give us confidence in our plans and we remain well placed to continue to grow market share," said CEO Nick Wilkinson.

It added that it expects FY2022 pre-tax profit to be in line with market expectations.

In light of this update, we see the insider buying here as a bullish indicator.

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