The Home of Homes:

Unlocking our

full potential

Dunelm Group plc

Annual Report and Accounts 2024

The Home of Homes:

Committed to being

good & circular

Dunelm Group plc

Sustainability report 2024

corporate.dunelm.com

Strategic report

2 At a glance

3 About us

4 Chair’s statement

6 The home of Balancing

Growth & Grip

8 The home of Ambition

& Innovation

10 Our business model

12 Our market

13 Our strategy

14 CEO’s review

20 Stakeholder engagement

25 Section 172 statement

26 Key performance indicators

28 CFO’s review

32 Sustainability

34 Non-financial and sustainability

information

38 Our approach to risk

management

40 Principal risks and uncertainties

46 TCFD report

55 Going concern and

viability statement

How to use this Annual Report

Where you see QR codes, scan

to watch videos online

Links to other content within

this report

Link to content within

the Sustainability Report 2024

Link to content online

Governance report

57 Chair’s introduction

59 Compliance with the Code

60 Directors and officers

63 Governance dashboard

64 Governance framework

68 Culture and values

71 Board activities

74 Nomination Committee report

81 Audit and Risk Committee report

88 Remuneration at a glance

89 Remuneration Committee report

116 Directors’ report

120 Statement of Directors’

responsibilities

Financial statements

122 Independent auditors’ report

128 Consolidated financial

statements

151 Parent company financial

statements

Other information

157 Alternative performance

measures (‘APMs’)

158 Advisors and contacts

The Home of Homes

Contents

Our market

Learn more about our

plans to further grow

market share

Our people

Discover how we

engage with our

colleagues on page 22

Strong leadership team

Scan the QR code to watch our CEO,

Nick, give a summary of our FY24 results

and future plans

Read our Sustainability Report 2024 to

understand how we are being good and

circular as a business

corporate.dunelm.com/sustainability

Visit our website for

further information about

our business

Unlocking our full potential

as The Home of Homes

We have delivered another good performance despite a challenging

consumer environment, demonstrating the strength and resilience

of our business model. Whilst remaining focused on delivery, we are

constantly looking to learn and adapt, to take advantage of the

exciting opportunities ahead of us. We are extremely confident in

our plans to unlock our full potential and achieve our clear vision to

be the most trusted and valuable brand in homewares and furniture

for UK consumers.

Read more about how we are the home of:

Balancing Growth & Grip

Find out more on page 6

Ambition & Innovation

Find out more on page 8

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

We are The Home of Homes, always seeking to create

beautiful products and getting to know our customers

better, to help them create homes they love.

We are a specialist retailer of homewares and

furniture, with a broad offer for all tastes and budgets,

with thousands of quality products at fantastic prices

sold across our 184 stores and on dunelm.com.

c.85,000

SKUs to suit every style and budget

across our broad range of homewares

and furniture categories

11,500+

colleagues

No.1

market leader in

UK homewares

184

stores

37%

digital sales

At a glance

40yrs

of Dunelm stores

For reflections from some of

our longest-serving colleagues,

see pages 69 and 70

Dunelm Group plc

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Our vision:

To build the UK’s most

trusted and valuable

brand for homewares

and furniture

Our purpose:

To help create the joy of truly

feeling at home, now and for

generations to come

Being Good & Circular:

We are committed to

sustainable growth by being

good and circular, as we seek

to look after all of our homes

Our home the Planet

Our home in Communities

A home for our People

On this journey we are embracing

change and recognise that we must

learn, invest and be both creative

and collaborative.

Our shared values:

Our four key values remain at the heart

of our business and will help unlock

our full potential

Our values evolved from the key business

principles developed 20 years ago, and

reflect the attitudes and behaviours we

encourage at Dunelm.

Stronger together

Act like owners

Keep listening

& learning

Long-term

thinking

Read how we embed and monitor our culture and

values in our Governance report from page 68

Learn more about our good and circular approach

to sustainability on pages 32 and 33

About us

Dunelm Group plc

Annual Report and Accounts 2024

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Performance

Sales of £1,706m were up 4% on last year, driven

by increased volumes. Strong operational grip

has become a characteristic of Dunelm in recent

years and it was demonstrated again this year to

increase gross margin, and support a profit before

tax increase of 7% to £205m. Diluted earnings

per share fell 0.8% to 74.4p, as a result of an

increase in the effective tax rate, largely due to

the rise in corporation tax in April 2023.

Our cash conversion and returns are key

strengths of the business, and during the year

we paid a special dividend of 35p per share.

Our ordinary dividend for the year was up 3.6%

to 43.5p per share, continuing our track record

of impressive cash returns to shareholders, as

well as demonstrating our ongoing confidence

in the business.

Being Good and Circular

Sustainable growth is ingrained in the day-to-

day operations of the Group. Being good and

circular is how we characterise our approach,

considering our impact on the planet, in our

communities and in looking after our people.

Read more about our approach on pages 32

and 33 and in our Sustainability Report 2024

Planet

Central to reducing our impact on the planet

is giving close consideration to the design,

materials and manufacturing processes involved

in our products. In FY24 we have increased the

During the last financial year, both the political

and economic environment have been

turbulent and consumer confidence has been

subdued. Despite this backdrop, Dunelm has

continued to attract new customers and

increase its market share through its broad

and attractive product range and focus on

outstanding quality and value.

Over many years, our business has performed

well in both stronger and weaker economic

cycles. This is credit to the unique, specialist offer

which has been developed for our customers,

and the attractiveness of our business model.

This success is also delivered by the thousands

of amazing people who work in the business;

in my second year as Chair, I’m seeing more and

more of the magic and energy which Dunelm

colleagues demonstrate every day, and which

drives the Company forward.

Over the past year, a focus on being The Home

of Homes has led to a further broadening of our

range of relevant homewares and furniture

products, at outstanding value across all price

points. At the same time, we have been opening

more stores, improving the digital customer

journey, developing our marketing activity, and

using technology and data to improve both our

offer and our infrastructure.

This culture of continuous improvement, led by

a strong and experienced team, has again seen

us grow sales, volumes, customer numbers and

market share.

I’m delighted to report

another strong performance,

with Dunelm again delivering

growth and demonstrating

resilience in what has been

a challenging homewares

market.

number of products that qualify for our

‘Conscious Choice’ range, predominantly by

finding more responsibly sourced materials that

have a proven, reduced environmental impact

compared to their conventional alternatives.

We’re also learning more about the lifecycle of

our products and have developed a circularity

strategy and circular design principles to push

ourselves forward. To increase awareness, during

the year our commercial teams were tasked with

a ‘Circular Product Design Competition’, the

results of which have already led to a number of

products being created, including our Full Circle

sofas, which feature modular design and can be

taken apart for recycling at end of life.

Communities

I am hugely proud of the way in which Dunelm

interacts with our local communities, from both

our stores and support sites.

This year our colleagues selected Age UK as our

new national charity partner, and I’m delighted

that we have committed to work with them for

the next three years to raise at least £2m, with a

mission of creating communities that feel like

home for older people. We have also continued

to build on the success of our ‘Delivering Joy’

campaign. This was first launched in 2019 and

has strengthened each year. Last Christmas our

customers and colleagues donated a remarkable

125,000 gifts across our stores, distribution

centres and offices, which were then distributed

to local communities and causes.

Delivering for our planet, our

communities and our people

Chair’s statement

Dunelm Group plc

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People

During the year we celebrated the 40-year

anniversary of our first store opening in Leicester

Churchgate, as the Adderley family built on

the success of their Leicester market stall.

We celebrated the milestone throughout the

summer, including an extra ‘double discount’ day

for colleagues, a pop-up museum at our Head

Office, and a video celebrating the recollections

of some of our longest-serving colleagues.

We now have c.11,500 colleagues across

distribution, manufacturing, customer contact,

store support centres and 184 stores, and

I thank them all for their ongoing enthusiasm,

commitment and dedication to our success.

We continue to strive to be an inclusive

employer where all our team members can

thrive. Whilst we still have much to do on

diversity, I am pleased that we have increased

the proportion of our ethnic minority ‘role-

model leaders’, which comprises c.300 senior

leaders or those managing large teams, by

2ppts to 5.8%.

During the year we also launched ‘Reach’, a

programme aimed at helping colleagues within

underrepresented ethnic groups achieve their

full potential. The programme focuses on

advancing skills, connections and ultimately

careers, and the first cohort of more than 60

participants graduated in August 2024.

Board

We announced a number of Board changes

during the year. We have welcomed two new

Non-Executive Directors in Ajay Kavan and

Dan Taylor, who bring a wealth of relevant and

complementary experience to the Board.

Both William Reeve and Peter Ruis reached their

nine-year terms as Board directors. Peter left us

earlier in the year and William will be with us

until the AGM, but will not stand for re-election.

I would like to thank both Peter and William for

the very significant contributions that they have

made over their many years of service to Dunelm.

After the year end Kelly Devine stepped down

from the Board, having agreed to join Dunelm’s

Executive Team as Customer Director. I am

pleased to continue to work with Kelly in her

new Executive capacity.

I share further detail on these changes in my

introduction to the Governance section of this

report, and look forward to continue working

with our strong and experienced Board, who

collectively have a fantastic range of skills.

Unlocking our full potential

Looking forward, whilst some of the lead

consumer indicators are beginning to look more

favourable, the sector is yet to show signs of

recovery. Notwithstanding this uncertainty, we

are very confident in the business and our future

plans. We have developed our strategic thinking

to focus on three key pillars: elevating our product

offer; connecting with more customers; and

harnessing our operational capabilities. Further

detail is shared in the Chief Executive’s review,

and we are excited about the opportunities

these bring. We will continue to invest in these

priorities, and are confident in further delivering

on our track record of driving profitable growth

and strong cash returns.

Alison Brittain

Chair

11 September 2024

Performance highlights 2024

Financial Non-financial

Total sales (£m)

1,706

1,639

1,581

1,336

1,058

FY24FY23FY22

FY20 FY21

£1,706m

FY23 £1,639m

Market share

7.7%

7.1%

6.8%

5.1%

5.8%

FY24FY23FY22FY20 FY21

7.7%

FY23 7.1%

Profit before tax

£205m

FY23 £193m

Free cash flow

£132m

FY23 £160m

Active customer growth

+5.1%

FY23 +2.8%

Colleague retention

89%

FY23 87%

Diluted earnings

per share

74.4p

FY23 75.0p

Ordinary dividend

per share

43.5p

FY23 42.0p

Ethnic diversity of our

role-model leaders

5.8%

FY23 3.8%

Scope 1 carbon

intensity vs FY19

–53%

FY23 -32%

1. FY22 included a 53rd week for statutory reporting purposes. On a comparable 52-week basis sales were £1,553.1m.

2. GlobalData UK combined homewares and furniture markets, excluding kitchen cabinetry and bathroom furniture, for the period

July 2023 to June 2024. Prior year comparatives restated.

3. Growth in unique active customers who have transacted at least once in the 12 months to June 2024. Management estimates using

Barclays data.

4. Retention is the percentage of colleagues from the start of the financial year (July 2023) who remained employed until the end of the

financial year (June 2024), excluding any planned leavers.

Read more in the Alternative Performance

Measures table on page 157

Chair’s statement continued

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Balancing

Growth & Grip

YoY volume growth

+6.2%

PBT margin

12.0%

F Y23 11.8%

Read more on page 28 Read more on page 29

The home of

In the last year, we have continued to grow

in what has remained a tough consumer

environment, demonstrating the strength

and resilience of our business model.

We take a balanced approach, regardless

of market conditions, continuing to plan

and invest for long-term, sustainable growth,

whilst maintaining our commitment to

strong operational grip.

Use the QR Code to

see our Spring 2024

TV campaign

Dunelm Group plc

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The home of Balancing Growth & Grip continued

Throughout our history we have consistently

delivered profitable growth alongside strong

cash returns, driven by an enduring commitment

to ‘act like owners’. In a challenging consumer

environment, we continue to balance growth

and grip: staying customer-focused and making

every pound count.

Staying customer-focused

Growth is driven by our focus on offering

outstanding value, relevance and choice for

our customers across our proposition, which

encompasses our broad range of homewares

and furniture products and the convenience

of our total retail system.

We continue to focus on product development

to meet evolving customer tastes. We have

carefully managed our curated range extension,

increasing the number of available products

for our customers, whilst maintaining a focus

on outstanding product quality and value.

Alongside this, we constantly seek to be better

and bolder with our product, increasing

differentiation and cross-category coordination

across our collections, whilst growing the use

of more sustainable materials.

Across our total retail system, we have increased

the proportion of our online range available for

Click & Collect to c.50%. Our goal is to have

nearly all UK-held stock available for next-day

collection, with a small number of specific

exceptions. We have also further expanded

our store footprint whilst making multiple

incremental improvements to dunelm.com

to reduce friction in the customer journey.

Making every pound count

Our strong performance over FY24 reflects the

inherent resilience and strength of our business

model against the backdrop of a subdued

market. In a year where we grew pre-tax profit

ahead of sales, our commitment to tight

operational grip and control was fundamental.

We take a balanced approach to managing

profitability throughout the business. We

maintained pricing discipline across our value

tiers to deliver outstanding value, whilst closely

managing our input costs through good

planning and optimising our product

specifications and sourcing.

Within our operating costs, whilst inflation

continues to be a headwind, we manage this

tightly and take a continuous improvement

approach to productivity to drive savings,

without compromising customer or colleague

experience. Alongside this, we maintain a

long-term view of our priorities and carefully

invest for future growth across our stores and

online offer.

Staying agile

In FY24 we continued to grow sales in a tougher

environment, demonstrating the relevance and

choice on offer for our customers. At the same

time, we expanded our gross margin without

any significant impact from price increases or

reductions, as we closely managed our input

costs including freight, raw materials and

foreign exchange.

Achieving this required an agile approach. In

particular, we faced disruption in the Red Sea,

causing delays to our main shipping route and

additional freight surcharges. This demanded

strong operational management from our

commercial team.

Whilst we saw some small challenges to the

availability of furniture in particular, we carefully

worked through these to minimise the impact

on our customers and ensure that they were

able to get the products they wanted, when

they wanted them.

Dunelm Group plc

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Use the QR Code to

see our Spring 2024

TV campaign

Ambition &

Innovation

The home of

We are a restless business, always keen to

grow by learning and adapting. This brings

big ambitions and a recognition that to

achieve them we cannot stand still. We

continue to test and learn with new ideas

and innovations to our offer so that we

remain as relevant as possible for our broad

customer base. As we look to the future, it is

this approach that will help us unlock our

full potential.

FY24 capex

£40m

FY23 £22m

Own-brand products

now Conscious Choice

c.26%

FY23 c.15%

Read more on page 30 Read more on page 33

Dunelm Group plc

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The home of Ambition & Innovation continued

As market leader, we currently have a 7.7%

share of the combined c.£24bn homewares and

furniture market. Through continued innovation

in our customer proposition and outstanding

execution, we now see a clear pathway to 10%

market share in the medium term. Whilst this is a

medium-term milestone, our ambition does not

stop there, with significant growth opportunities

across all our categories.

Unlocking our full potential

In order to fulfil our ambitions we have evolved

our strategic approach, ensuring we are

developing and investing in the right areas to

unlock our full potential as The Home of Homes.

This is reflected in three strategic pillars:

1) Elevate our product offer

2) Connect with more customers

3) Harness our operational capabilities

We are benefitting from the improvements

we have made to our technology and data

capabilities over recent years, and our growing

confidence and ability to innovate using new

technology across our operations. Our strategic

pillars, in combination with our skilled

colleagues, can transform the way we amplify

our advantaged business model and best meet

the needs of our customers.

Read more on the evolution of our strategy

in the CEO’s review on page 14

Long-term thinking

Ambition and innovation thrives at Dunelm

because we take decisions for the long term,

a principle which has been in the business

since its beginnings and remains one of our

core values. This means we take multi-year

investment decisions, develop our future

leaders and make meaningful choices as we

strive to be good and circular.

Doing the right thing for the long term is key to

driving sustainable growth and value for all of

our stakeholders.

A clear pathway to further market share growth

5.0%

7.7%

10.0%

Medium

term

FY24

FY19

1. GlobalData UK combined homewares and furniture markets,

excluding kitchen cabinetry and bathroom furniture.

Innovation in product design

Product is at the heart of Dunelm and innovation

is central to the way we design our own-brand

ranges. This brings differentiation from the

competition and wider choice for our customers.

We’re accelerating experimentation, exploration

and development and have created ‘Dunelm

Lab’, a dedicated innovation team, focused on

new technologies, new materials, and new

manufacturing techniques to keep us at the

forefront of new ideas in homewares.

We are also working hard to ensure our

products have longevity. In our lighting

category we’ve designed our new Aurora

range to allow customers to replace the LED

component once it reaches the end of its life, as

simply as replacing a bulb, meaning less waste.

And our ‘Full Circle’ Austin sofa range features

modularity, can be fully disassembled and

reassembled, and manufactured using materials

that can be recycled and repurposed.

Dunelm Group plc

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Harness our

operational

capabilities

Connect with

customers

Elevate our

product offer

Our home in

Communities

A home for

our People

Our home

the Planet

Read about it on

the next page

Our business model

Our competitive advantages

Our customer

proposition

Our purpose,

vision and values

Our governance

Stakeholder value

Read more on our six competitive advantages on the next page

Read more on

being good and

circular in our

Sustainability

Report 2024

Read about how we deliver for our stakeholders on the next page

Ensuring we are

The Home of Homes

for the long term

Our business model delivers competitive

advantage and combines our strategy

with our good and circular approach to

sustainable growth. This creates stakeholder

value, guided by our purpose, vision and

values, and strong governance.

Dunelm Group plc

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Our business model continued

By ensuring that customers stay at the very

centre of our thinking, we are confident in

our plans to continue growing our sales and

gaining market share.

Value & choice

Great product quality & style for every budget

We offer customers relevant products across

a broad range of categories with outstanding

value and choice. Our customers are savvy,

so we present attractive price points for every

style and budget and ensure our products are

practical, beautiful, and increasingly, sustainable.

Fast & convenient

Everything easy to find, buy & use

We aim to provide an easy and seamless

browsing, shopping and delivery experience,

whether that’s in our stores, online, or a

combination of the two. We focus on being

efficient throughout the customer journey.

Friendly & expert

Service that is non-judgemental

& knowledgeable

Whether in store, at the end of a phone (or email)

or making a delivery to your home, we train our

colleagues to be friendly, knowledgeable and

helpful. Our investment in technology and data

gives them additional tools to advise on product

choice and availability more effectively.

Good & circular

Positive choices for our planet, communities

and people

We are making it easier for our customers to

make thoughtful choices by using more

sustainable design, materials and manufacturing

techniques, whilst doing the right thing in our

communities and for our people.

Our customer proposition

Market-leading brand

We are the market leader in a large and

fragmented homewares and furniture market,

with a total share of 7.7%

and significant scope

to continue growing across our categories.

Specialist product proposition

Our wide assortment of products offer quality,

choice and value, appealing to a broad range

of customers across different regions, ages

and incomes. We offer good, better and best

options across our assortment and appeal to

a variety of styles, needs and budgets.

Total retail system

Our total retail system combines friendly and

knowledgeable service across our 184 stores,

with the convenience of browsing and shopping

online. This gives customers options to shop their

way and also brings services including Made-to-

Measure, Home Delivery and Click & Collect.

Unique operating model

We are a homewares specialist with largely

own-brand product ranges, giving us a high

degree of control over specification and

sourcing, through long-standing relationships

with our committed supplier partners.

Well-established values

Our colleagues are the heart of our business

and feel a strong sense of belonging. Driven

by our shared values, we create an inclusive

environment for all to thrive.

Financial strength

We have a strong balance sheet and a capital-

light growth model, with a track record of

delivering sustainable, profitable growth and

strong shareholder returns, whilst continuing

to invest for the future.

Our competitive advantages

Customers

We offer a comprehensive range of relevant

homewares and furniture products, at

outstanding value, with the aim of helping our

customers create the joy of truly feeling at

home, now and for generations to come.

+5.1%

increase in active customers

Colleagues

We strive to be a diverse and inclusive employer

for our c.11,500 colleagues, with a strong focus

on progression and a supportive environment.

>60

graduates of ‘Reach’ development programme

Communities

Our stores and sites are a key part of their local

communities, providing friendly service and

advice, a place to refuel and relax in our Pausa

cafes, and contributing to local good causes.

We are opening in new locations, creating

employment and extending our positive impact

on communities across the UK.

190+

local communities serviced by our stores

Stakeholder value creation

Suppliers

We work closely with our suppliers to create

and grow long-term value through mutually

beneficial partnerships, whilst maintaining the

highest ethical standards.

99%

invoices paid on time

Planet

Through design and the selection of materials

and manufacturing processes, we consider and

influence the impact of our products on the

planet. We are increasingly exploring circular

business models whilst ensuring we minimise

the impact of our operations.

–53%

reduction in Scope 1 carbon intensity vs base year

Shareholders

We deliver long-term sustainable growth,

strong cash generation, a progressive ordinary

dividend and excess cash returns to

shareholders in the form of special dividends.

£158m

total dividends paid in the year

Read more on how we engage with our

stakeholders on pages 20 to 24

1. GlobalData UK combined homewares and furniture markets,

excluding kitchen cabinetry and bathroom furniture.

2. Growth in unique active customers who have transacted at least

once in the 12 months to June 2024. Management estimates

using Barclays data.

Dunelm Group plc

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10%

20%

2019 share 2023 share Furniture Homewares

Our market

The UK’s market leader

in homewares

We are the market leader in a large and fragmented market, totalling

c.£24bn1 across a broad range of homewares and furniture categories.

The market

We feel we are unique in our market as a

multi-channel specialist homewares retailer.

The competitive landscape varies significantly

by category, comprising department stores,

supermarkets, retailers with a single online or

physical channel, and many smaller

independent operators.

This substantial market has contracted in the

last two years amidst a generally challenging

macroeconomic environment, but has typically

shown modest annual growth over the

medium term.

Our progress

Our market share is currently 7.7%

, offering

significant headroom for further growth. Against

this backdrop, we have a strong track record of

share gains in our recent, medium and long-term

history, and have increased our share by

270bps

over the last five years. Our highest

category market shares are close to 20%,

typically in heritage areas where we have been

trading throughout our history such as curtains

and bedding. We generally have lower shares in

some of our relatively newer categories,

although still around 10% in the likes of gallery

and dining furniture. Importantly, we are making

share gains regardless of our category maturity,

demonstrating the strength and breadth of

our offer and opportunities ahead.

Our plans

Whilst it is hard to predict customer sentiment

in our market, we are confident in our plans to

continue gaining market share, with an ambition

to reach 10% in the medium term. Our vision is

for more, and we see no ceiling at 10%, particularly

as we have many categories already above this

level and still growing.

We have a significant opportunity to help our

customers discover and shop a wider range of

our categories, given more than half of our

customers only shop across three or fewer.

This opportunity aligns well to our evolved

strategic priorities, both to elevate our product

offer across these categories, and to connect

with more customers through our total retail

system and increasingly personalised marketing.

Each bar represents a Dunelm homewares or furniture category which in total represent c.80% of total sales, mapped to GlobalData UK

market sizes for the calendar year 2023 against calendar year 2019. Excludes certain Dunelm categories which are not part of the GlobalData

UK homewares and furniture markets e.g. rugs.

1. Based on GlobalData UK combined homewares and furniture markets, excluding kitchen cabinetry and bathroom furniture, including VAT.

Our market share by category

£24bn

combined market size

7.7%

FY24 market share

+270bps

growth in share vs FY19

Dunelm Group plc

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Our strategy

Unlocking our full potential

as The Home of Homes

Harness our

operational

capabilities

Using our product mastery to increase

relevance and appeal, extending our

choice, value, design and style

Developing and expanding our channels,

offering an easier and more personalised

experience

Leveraging our skills and systems to

transform our proposition, processes

and productivity

Led by brilliant colleagues, powered by our growing technology and data capabilities

Connect

with more

customers

Elevate

our product

offer

Read more about our strategy in the

CEO’s review on page 14

Our three strategic pillars

Dunelm Group plc

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Introduction

I am pleased to report another strong

performance, in what remained a tough

consumer environment. The homewares and

furniture market was still soft and during the

year we faced both inflationary pressures and

disruption to major shipping routes. Nevertheless,

we have again demonstrated the resilience of

our business model in achieving growth, stable

operating margins and strong cash returns.

At the same time, we continue to invest for the

long-term as we identify growth and productivity

opportunities for the future.

As we assess the changing consumer

landscape, we are evolving our focus areas to

frame our strategic priorities and investment

choices. Entering this next phase of growth,

we are committed to our vision to become the

UK’s most trusted and valuable homewares

and furniture brand, and will achieve this by

unlocking our full potential as The Home

of Homes.

With a focus on further elevating our product

offer, developing and expanding our stores

and digital channels to connect with more

customers and harnessing our operational

capabilities, we are confident in continued

market share gains. Indeed, our plans now give

us a clear pathway to 10% market share in the

medium term.

We were particularly pleased with the quality

of our sales growth, with volumes up 6.2% being

a positive indicator of our overall appeal. With

volume growth ahead of sales, we saw a small

reduction in our average item value, reflecting

a slightly different product mix to the prior year,

with the impact of price changes broadly stable.

The strong volume growth was supported by an

increase in the number of active customers, up

5.1%

. Pleasingly, this growth was seen across all

age, income and geographical cohorts.

Gross margin was strong in FY24, expanding

by 170bps to 51.8% (FY23: 50.1%), ahead of our

expectations at the start of the year. There were

various moving parts within our input costs, and

we particularly benefited from a net tailwind

from lower freight rates which has now largely

annualised. We were also able to avoid any

significant impact from the disruption in the Red

Sea, working closely with our freight providers

to manage the impact of surcharges, whilst

using the capabilities within our commercial

teams to minimise availability issues. Our strong

margin was achieved without price increases,

as we maintained our commitment to offering

outstanding value to our customers. As expected,

operating costs as a proportion of sales increased

to 39.3%, driven by inflation and the investments

we are making to drive future growth.

1. GlobalData UK combined homewares and furniture markets,

excluding kitchen cabinetry and bathroom furniture, including

VAT. Prior year comparative restated.

2. Growth in unique active customers who have transacted at least

once in the 12 months to June 2024. Management estimates

using Barclays data.

A clear pathway to further

market share gains

CEO’s review

As ever, our strong performance and

excitement for the future is due to the support,

adaptability and skills of our committed

colleagues and supplier partners. I would like

to thank them all for everything they continue

to do to grow, adapt and develop. It is due to

them that we achieve these results, and are

well-placed to unlock our full potential.

FY24 Review

A strong performance balancing growth

and grip

In FY24 we successfully balanced delivering

growth with maintaining our firm operational

grip on the business amidst a challenging

consumer environment. We made good

progress against our objectives, expanding our

store estate in different sizes and locations as

planned, continuing to improve our digital

proposition, and enhancing our multi-channel

experience for customers who prefer to shop

both online and in store, including through

a better Click & Collect proposition.

We grew our sales by 4.1%, in a market which

declined, reflecting our ongoing customer

appeal and continuing our consistent track

record of market share gains. We now have

a 7.7%

share of a total addressable market

(combining homewares and furniture) valued at

c.£24bn

, up 60bps year-on-year, and significantly

higher than the 5% we held in FY19, and see

significant scope to increase this further.

We have clear focus areas which

are framing our plans, and are

extremely confident in our

ability to deliver long-term

sustainable growth.

Dunelm Group plc

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What this means for

our investors

Growth

Compelling runway to grow share of a

large, fragmented addressable market

Consistent track record of share gains

over recent and long-term history

Cash returns

High cash conversion

Well-established framework for

returning cash to shareholders

Sustainable profits

Continued investment for sustainable

growth, maintaining stable operating

margins

Resilient track record of performing

through all economic cycles

Cost increases were partly offset by productivity

improvements across the Group. Overall, PBT

grew ahead of sales, up 6.6% to £205m (FY23:

£193m), representing a strong PBT margin of

12.0% (FY23: 11.8%). Diluted EPS fell by 0.8%

to 74.4p (FY23: 75.0p), with our pre-tax profit

growth offset by a higher effective tax rate,

largely the result of increased corporation tax.

Our financial strength, including a healthy

balance sheet and a capital-light growth model,

is one of our core business advantages. This

was reflected in another good year of cash

generation, with free cash flow of £132m

(FY23: £160m) representing 62% of operating

profit. This enabled us to increase our ordinary

dividend once again, and we are proposing a

final dividend of 27.5p per share, bringing the

full year ordinary dividend to 43.5p per share,

up 3.6% year-on-year. In total, we returned

£158m to shareholders during the year,

including a special dividend of 35p announced

at the interim results. This reflects our confidence

in the business and ongoing commitment to

our capital allocation policy and wider principle

of delivering strong cash returns for our

shareholders. Since our IPO in 2006, we have

now returned c£1.5bn

to shareholders.

Delivering for all our stakeholders

As well as a strong financial performance, we

have delivered positive outcomes across our

broad group of key stakeholders. We strive to

make good decisions and ensure what we do

is increasingly sustainable. During the year we

reiterated our good and circular approach to

sustainable growth, and continue to ensure it

is embedded into our strategy and ways of

working so that we are delivering for all of our

stakeholders and focussing on our planet,

communities and people.

CEO’s review continued

Good & Circular approach to sustainable growth

A unique, specialist proposition driving strong returns

A winning and resilient business model:

Market

leader

Low share of a

c.£24bn

highly

fragmented

market

Specialist

product proposition

Broad appeal

across income

and age groups

Total retail

system

Thriving stores and

digital channels

Unique

operating model

Own-brand

product design and

committed supplier

partners

Well-established

values

Growth mindset,

frontline focus

and long-term

decisions

Financial

strength

Strong balance

sheet and capital-

light growth

model

1. Ordinary dividends plus special distributions.

2. Based on GlobalData UK combined homewares and furniture markets, excluding kitchen cabinetry and bathroom furniture, including VAT.

Dunelm Group plc

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In FY24 we were proud to become the first

homewares specialist to have validated SBTi

targets across Scope 1, 2 and 3 carbon

emissions

, which sees us align to the latest

climate science from the Intergovernmental

Panel on Climate Change (IPCC). We have also

made further progress in extending our good

and circular approach into our customer

proposition, increasing the proportion of

own-brand products which have our more

sustainable ‘Conscious Choice’ label, and

introducing the ‘Too Good to Go’ initiative to

our Pausa cafes to help reduce food waste.

Our committed supplier partners are also

helping us to limit our impact on the planet.

Having grown together over several decades,

we see these enduring relationships as a key

strength of our unique operating model. On

sustainability matters, we work together with our

suppliers and continue to learn. Where necessary,

we have been encouraging suppliers to adopt

a data monitoring standard and action planning

tool (the Higg Index) to underpin their improved

manufacturing programmes.

We continue to place importance on and build

momentum in the work our stores and sites do

in their local communities. Originating during

the pandemic and expanding since, all our

stores now support important local organisations

including selected schools, care homes, women’s

refuges and more. Our annual Delivering Joy

campaign is an example of this work in practice.

Last year, I am immensely proud to say that we

delivered 125,000 gifts, to these local causes.

Communities also form the backbone of some

of our circularity initiatives, including our

expanding takeback schemes and ‘Home to

Home’, through which customers can donate

pre-loved homewares items to those in need.

We place great importance on the

development and engagement of our

committed colleagues. Developing our talent

improves retention, enables internal succession,

and increases our productivity and business

resilience. Encouragingly, we saw colleague

retention increase to 89%

during the year

(FY23: 87%). Whilst our colleague engagement

score fell in FY24

, although high by industry

standards, we are actively listening to our

colleagues. We see very strong response

rates to our colleague engagement surveys

throughout the year, which give us detailed and

extensive feedback, from which we are building

positive action plans across the business.

As technology changes the nature of all roles

across our business, we are as committed to

lifetime learning as we are to early careers

recruitment and development. Our data

academy and apprenticeships are good

examples of this. We are also excited about

our ‘Reach’ development programme which

launched during the year and is focused

on increasing the number of ethnically

diverse colleagues in senior positions.

CEO’s review continued

Elevate

our product

offer

Collaborations

and labels

Inspiration

Value and choice Product mastery Sustainability

Increasing our relevance and appeal:

a better and bolder lighting offer

The scope for product elevation is very exciting, and we

know that only the strongest product offer and relevance

hits the mark with our customers.

1. Our targets approved by the SBTi are as follows. Overall Net-

Zero Target: Dunelm Group PLC commits to reach net-zero

greenhouse gas emissions across the value chain by FY40 from

a FY19 base year. Near-Term Targets: Dunelm Group PLC

commits to reduce absolute Scopes 1 and 2 GHG emissions by

50% by FY30 from a FY19 base year. Dunelm Group PLC also

commits to reduce absolute Scope 3 GHG emissions by 50%

within the same timeframe. Long-Term Targets: Dunelm

commits to reduce absolute Scope 1, 2 and 3 GHG emissions

by 90% by FY40 from a FY19 base year.

2. Retention is the percentage of colleagues from the start of the

financial year (July 2023) who remained employed until the end

of the financial year (June 2024), excluding any planned leavers.

3. Colleague engagement score (eNPS) is based on responses to

the question ‘How likely are you to recommend Dunelm as a

place to work’ from our May colleague survey. Our eNPS score

fell 10%pts year-on-year.

Dunelm Group plc

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CEO’s review continued

We have much more to do in this area but

are encouraged that the proportion of our

‘role model’ leaders

from ethnically diverse

backgrounds increased to 5.8% in FY24

(FY23: 3.8%).

Unlocking our full potential as The Home

of Homes

Looking forward, we have three broad focus

areas which frame our priorities and investments.

These are an evolution of the strategy we have

followed over many years, and in combination

will allow us to achieve our full potential as the

Home of Homes, and to be the UK’s most

trusted and valuable brand for homewares

and furniture.

Firstly, in the area of product: we see

opportunity to redouble our focus on product

development, increasing our curated ranges,

bolder design differentiation, enhancing

cross-category coordination in our collections

and innovation in sustainable materials. In

recent times we have been acutely aware of the

importance in having the right product offer, at

the right time, to ensure we remain relevant and

appealing to customers. In the year we saw this

demonstrated with stronger upholstered

furniture collections, combined with 5-day

delivery lead-times.

Secondly, we are building further confidence

in opening more stores and developing our

digital channels to deliver an outstanding and

connected multi-channel shopping experience

for our customers. We know that multi-channel

shopping is the preference for most when it

comes to homewares and furniture, so joining

up our channels as much as possible is a priority.

Thirdly, after building up our skills and

operational capabilities in recent years, we see

significant opportunity to harness them to

achieve both productivity improvements and

further strengthen our customer offer. In light

of elevated wage inflation, and with growing

technology and data capabilities, where

foundational investment has been made over

recent years, there are increasing opportunities

to introduce more automation and productivity

tools throughout the business. These are

already driving efficiencies in parts of our

operations (such as reducing volumes in the

Customer Contact Centre) and our capacity to

successfully implement more of these initiatives

will increase going forward.

Our three focus areas are therefore as follows:

1. Elevate our product offer

2. Connect with more customers

3. Harness our operational capabilities

These focus areas are an evolution of the

strategy that we have followed over many years

and, in combination, will allow us to unlock our

full potential as The Home of Homes. They

support broad-based and long-term sustainable

market share growth which can be delivered

alongside stable operating margins and strong

cash generation. In the medium term they

shape our clear pathway to reaching our next

milestone of 10% market share.

There are various examples which bring to

life the initiatives which sit under each of our

focus areas:

1. Elevate our product offer

Product has always been at the heart of

Dunelm, and we have well-established

capabilities across a broad range of categories,

particularly in textiles and soft furnishings

where our specialism dates back 45 years.

Connect

with more

customers

Developing and

expanding

our channels

We know that the combination

of stores and digital is the

winning formula for our existing

and target customers.

More store openings

We are taking our

existing product

strengths and

elevating them

further through

design and

innovation across

all price and

quality tiers.

1. Regional and store coaches plus all colleagues at ‘Head of’

level and above, of which we currently have around 300 across

the organisation.

More digital

optimisation

More personalised

cross-channel

experiences

Dunelm Group plc

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CEO’s review continued

The scope for product elevation is very exciting,

not just through broadening our ranges, but

also by increasing relevance with more

coordination and style. We are taking our

existing product strengths and elevating them

further through design and innovation across

all price and quality tiers.

Lighting is a good example of the level of

further opportunity we see ahead. We have

consistently grown market share in the last five

years and see headroom for more growth and

innovation. Our in-house design capability

allows us to coordinate across the wider Dunelm

range, including our core textiles collections

and cross-category labels such as Elements and

our National History Museum collaboration.

We are also working to accelerate our product

development cycles to allow us to respond

faster to trends and increase the choice we

offer at all price and quality tiers. Our growing

knowledge of more sustainable materials will

also allow us to offer better choice to customers,

as well as introduce more circular product

design that uses more sustainable materials

and facilitates repair and recycling.

The made-to-measure window treatments

category is another example of our product

elevation opportunity, where taking greater

end-to-end control of the supply chain will

enable accelerated growth and returns.

Alongside our well-established manufacturing

centre for made-to-measure curtains and

Roman blinds, we have chosen to invest in

more vertical integration. In FY24 we brought

the manufacture of custom hard blinds in-house

and started manufacturing roller blinds and

Venetian blinds in the Sunflex business we

acquired two years ago. Looking ahead, we are

bringing shutters into our own manufacturing

facility, with a plan to launch our new offer to

customers in FY25. This will give us differentiated

and advantaged product, the ability to specify

materials and design, shorten UK lead

times relative to competitors, and improve

factory utilisation by aligning demand and

supply capacity.

2. Connect with more customers

As we elevate our product offer, we will further

improve how we connect our products to more

customers through our total retail system. We

have known for many years that the combination

of stores and digital is the winning formula for

our existing and target customers, and we are

continuing to optimise our cross-channel offer,

making the customer experience both easier

and more personalised.

We have continued to open new superstores,

with six new openings (including one relocation)

in FY24, split evenly between our traditional

c.30,000 sq ft size and newer smaller stores of

c.15,000 sq ft. We are pleased with the returns

of our new stores, typically paying back within

three years, giving us confidence to open more

stores in a range of sizes and locations.

We will continue to open 30,000 sq ft

superstores in large catchments given their very

strong returns, however supply of appropriate

sites has become more limited, so we are being

agile in our approach. In the early part of the

new financial year, we completed the freehold

purchase of a tenanted retail site, which we will

look to convert to a Dunelm format in the future.

We are continuing to optimise

our offer across stores and digital,

making the customer experience

both easier and more personalised.

Product master

data management

Supplier

portal

Demand

forecasting

Automated

replenishment

Scaling our commercial operations

From a traditional product life cycle journey to an automated,

efficient operation that powers product mastery.

Our goal

To scale and upgrade our commercial operations and ways

of working while retaining our advantaged commercial model.

Harness our

operational

capabilities

Leveraging our skills and

systems: scaling and optimising

commercial operations

Increasing our focus on harnessing our scale, capabilities and

technology to realise process improvements and productivity.

Dunelm Group plc

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CEO’s review continued

We will also open more smaller superstores,

in smaller catchments and in the white space

between stores in densely populated areas.

Although this footprint is less developed for us,

we are excited by what we have seen in our new

smaller stores and by the opportunity to optimise

sales densities and productivity as we continue

to learn. Overall, having previously guided on

5—10 new openings in FY24 and FY25, we now

see a runway for this rate of growth continuing

into the medium term (expected to be evenly

split between larger and smaller sizes).

In addition, and to better serve our target

customers in inner London boroughs, we are

testing some smaller stores in London. Our first

inner London store, at c.5,000 sq ft, will open in

the first half of FY25, and we are exploring other

locations to unlock the opportunity with this

significant segment of the UK population where

we know we are under-represented.

Complementing our stores, we have made

continued progress in our digital channels,

building strong foundations in our front-end

architecture and customer data platform.

As we move forward, we are advancing through

optimisation and experimentation, with

meaningful opportunities for improving our

proposition. Offering a more personalised

experience to our customers takes many forms,

and using our improved data and technology

will be key to improving our proposition.

One example of this is a change to product

discovery on dunelm.com, where we are

implementing new AI search functionality in the

first half of this year, having carried out testing in

FY24. This will improve the quality, relevance and

presentation of results when searching on our

website, with test results showing fewer ‘zero

results’ searches and more personalised results.

This change moves us from earlier generation

functionality towards an advanced AI solution.

This will increase the appeal of searching on our

site — a significant opportunity given customers

who use search are four times more likely to

complete a purchase than those who do not.

3. Harness our operational capabilities

Though operational grip has been a

characteristic of the Dunelm business for some

time, we recognise an increased opportunity

to harness our operational skills and scale. An

ongoing focus on continuous improvement will

remain, driving annual productivity savings,

and with elevated wage inflation, there is now

more scope for attractive returns from

productivity tools and automation. Here we will

test and learn to ensure we adopt the most

appropriate technologies for our products and

business model.

We are making good progress in scaling our

commercial operations, improving demand

forecasting and replenishment across our stores

and own distribution centres. Having carried out

testing in FY24, we are in the process of rolling

out new technology and ways of working in the

first half of this year, introducing machine

learning, automating low value tasks and

reducing our reliance on manual processes

and spreadsheets.

Going forward, there is more work to do in

relation to our smaller store footprints, specifically

developing our processes and tools for

optimising space, grading and range planning.

This level of commercial transformation will

facilitate our expanding product ranges, the

efficiency of stock management in our

distribution centres and our different store

locations and sizes, and the speed of product

development. These are complicated

developments, but we expect these new

capabilities to help us grow our market share

profitably, while serving more customers and

increasing the advantages of our business model.

Downstream from demand forecasting, we

have an ongoing programme of continuous

improvement to maximise the utilisation of

our network capacity and improve labour

productivity in our supply chain. In FY24 we

focused on a series of tactical initiatives,

including the optimisation of shift patterns for

our colleagues; reducing our rate of returned

products; and diversifying our carrier network

to improve variable costs.

In the coming years we will be working across

our own distribution centres and with our

supplier partners to increasingly automate our

processes. Automation investment is becoming

more attractive and we will find ways to optimise

this for the specific product characteristics of

homewares and furniture. For example, we will

introduce simple automation of parcel packing

and dispatch in our small-parcel home delivery

operation in conjunction with our supply

chain partner.

Technology is moving rapidly, but cannot

provide the solution in isolation. It is the

combination of technology and well-executed

business change, that leads to improvement.

As we continue to test and learn, we are

increasingly confident in our capabilities and

capacity to do this successfully, in ways that

deliver both growth and returns, in balance.

Summary and outlook

We delivered another strong performance in

FY24, successfully balancing growth and

operational grip in a soft market. We achieved

high-quality sales and volume growth, and

increased our PBT ahead of sales, whilst

continuing to make progress against our

strategic objectives.

We are gradually seeing improvements to

economic indicators, however we are yet to see

a meaningful change in consumer spending

habits in our markets. In this context, we have

made a solid start to the new financial year,

against a strong prior year comparator.

We have refined our thinking on the key

opportunities ahead of us, with three clear focus

areas framing our investments and strategic

priorities for the coming years, and we are

confident we can accelerate into a consumer

environment which presents a significant

opportunity for market share growth.

We now have good line of sight to continued

market share gains and expect to reach our next

milestone of a 10% total share in the medium

term. We are very confident in our business

model and clear plans that will continue to

deliver sustainable growth and unlock our full

potential as The Home of Homes.

Nick Wilkinson

Chief Executive Officer

11 September 2024

We recognise an increased

opportunity to harness our

operational skills and scale, and

will test and learn to adopt the

most appropriate technologies for

our products and business model.

Dunelm Group plc

Annual Report and Accounts 2024

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Stakeholder engagement

Understanding our

stakeholders

By understanding what our key stakeholders care about, and considering

their views, we can build more meaningful relationships and take fully

informed decisions that create value for the long term.

Key stakeholders

We engage with a wide range of stakeholders

at a Board level and in the day-to-day running

of our business, seeking to build long-term

relationships based on mutual growth and

respect, consistent with our Code of Business

Conduct, and our shared values and culture.

Our key stakeholders are those who we know

are highly likely to be affected by our actions

and decisions, and vice versa.

Responsibility for engagement at an operational

level sits with members of the Executive Team,

and is described on the following pages 21 to

24. We also set out how the Board is kept

informed about the interests of our key

stakeholders, as well as how our Board

members engage with them directly.

Pages 72 and 73 in the Governance report

provide further detail and examples of how

stakeholder feedback is presented to the Board

for discussion, debate and consideration as part

of its decision-making, alongside metrics such

as those set out on this page.

In May 2023, we undertook a materiality

assessment with a third party to understand

stakeholder perceptions relating to our most

material environmental, social and governance

(‘ESG’) topics. More information about this

research can be found on pages 28 to 29 of our

2023 Annual Report. Stakeholder feedback

from that exercise is included in the ‘what they

care about’ entries on the following pages.

In addition to key stakeholders, we

acknowledge the importance of other

stakeholder groups on page 24.

Read our s.172(1) Companies Act 2006

statement on page 25

Examples of metrics used by the Board to measure the effectiveness

of our engagement

Customers

• Unique active customer

growth

• Total revenue

• NPS/CSAT

• Safety scores

Colleagues

• eNPS

• RIDDOR¹ incidents

• Retention

• Whistleblowing

• Diversity

Communities

• Monies raised for good

causes

• Take-back

• Community social media

followers

Suppliers

• % Tier 1 factories audited

• % Products with responsibly

sourced raw materials

• Whistleblowing

• CO

emissions

Shareholders

• Share price movements

• Profitability

• AGM voting outcomes

1. Reporting of Injuries, Diseases and

Dangerous Occurrences Regulations.

Dunelm Group plc

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Stakeholder engagement continued

What they care about

Value, style, choice and quality

Product safety

A great shopping experience and

responsive customer services

Responsible use and protection of

personal data

Ethical and sustainable sourcing

Key management responsibility

Customer Director

Why we engage

Our business revolves around our customers.

We remain customer-focused in everything

we do, striving to improve our proposition.

We seek to achieve this by delivering great

products, services and experiences.

Engagement improves our customer insight

which, in turn, influences our strategic pillars

and capital allocation. Ongoing investment

in customer data and analysis allows us to

respond more quickly and accurately to

develop relevant product ranges and services,

helps drive brand awareness and grow our

customer base.

How we engage day-to-day

• During the shopping experience and at

point of sale in store, with feedback being

shared as appropriate within the business.

• By means of our customer service team and

the channels by which it communicates with

our customers.

• Social media channels.

• Customer focus groups/panels.

• Customer surveys.

How the Board engages

• Conducts store visits and reviews online

experience.

• Receives customer insights report at every

Board meeting.

• Monitors customer KPIs (including CSAT) and

challenges management to ensure the

customer proposition remains at the forefront

of all development activities.

• Receives regular updates on health and safety,

product quality and ethics, sustainability and

data protection.

How we have listened and learned —

highlights in FY24

• Improved ease of shopping with an interest

free credit offer and improved cross-channel

gift cards.

• Grew our ‘Conscious Choice’ range to c.26%

of own-brand products.

• Continued to invest in data security.

• Expanded our Click & Collect offer.

• Launched new safety campaign messaging

— ‘In Our Home We Put Safety First’ — and

implemented improvements to reduce risk of

incidents in stores.

• Opened new stores outside of our traditional

size and locations and continued to explore

further opportunities to do so.

• Continued to develop our ethical audit

programme, which covers suppliers of

own-brand products.

• Continued to optimise dunelm.com through

faster website and ‘back in stock’ notifications.

5.1%

growth in unique active customers

shopping with us online and in store

1. Growth in unique active customers who have transacted at

least once in the 12 months to June 2024. Management

estimate using Barclays data.

Customers

Dunelm Group plc

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Stakeholder engagement continued

What they care about

Fair pay and reward

Opportunities for progression

A safe, inclusive and diverse workplace

Personal data protection

Opportunities to be listened to and

make a difference

Key management responsibility

Stores and People Director

Why we engage

Committed and ambitious colleagues are at

the heart of our business. We engage with

them to understand how best to recruit, retain,

motivate and reward them, including helping

with their mental and financial wellbeing.

We also use this information to make better

decisions for our customers and communities

and to support our strategic growth.

How we engage day-to-day

• Annual colleague engagement survey,

alongside targeted pulse surveys.

• Two-way ‘always on’ communication via our

Home Comforts intranet.

• Regular CEO updates — ‘Nick’s Note’.

• Colleagues represented through our National

Colleague Voice (see right) and our Local and

Regional Colleague Voice networks (see our

Sustainability Report 2024 for more detail).

• Store colleague roadshow, seminar and

monthly newsletters.

• Regular colleague ‘huddles’.

• 24/7 independent, confidential

whistleblowing hotline.

• End of year events to reflect on the past year

and look ahead to the new financial year.

How the Board engages

• Visits stores and other sites.

• Designated NED for colleague matters and

CEO attend NCV meetings and report to

the Board.

• Receives People update in each CEO report

to the Board.

• Receives overview of whistleblowing reports.

• Reviews key outcomes and actions from

colleague engagement survey.

• Reviews detailed colleague dashboard and

metrics presented by the Stores and People

Director at least twice per year.

• Discusses the gender pay gap disclosure.

How we have listened and learned —

highlights in FY24

• Continued to invest in learning and career

development opportunities to strengthen our

employer value proposition, ‘grow’ talent and

improve succession planning. This included

a new ‘role-model leader’ programme and

a data literacy academy.

• Taken a carefully considered approach to

colleague pay and reward decisions for FY24.

• Launched ‘Reach’ development programme

for colleagues from underrepresented

ethnic groups.

• Provided additional colleague discount to

celebrate 40 years of Dunelm stores.

• Introduced new policy and tools to support

colleagues who are also carers.

• Reviewed our approach to colleague

recognition, to ensure that it continues to

develop in a fair and consistent way.

• Focused further on the cadence and content

of our colleague communications.

National Colleague Voice (‘NCV’)

Our colleague representative body, NCV,

has been running for five years. Members

represent a range of ages, ethnicities,

genders, locations, tenures and levels of

seniority across Dunelm. During FY24, we

held four meetings, led by Nick Wilkinson

and/or members of the People team. Marion

Sears, who is our designated Non-Executive

Director (‘NED’) for colleague matters,

attended and other NEDs often joined,

alongside presenters (as appropriate).

Each meeting comprises three parts:

a business performance update, a ‘What’s

on your mind?’ item for members to raise

concerns, and ‘Big Topics’ where we

communicate and seek feedback on important

matters. In FY24, these were health and

wellbeing, sustainability, diversity and inclusion,

community initiatives and reward. The aim is

to stimulate discussion and debate, with

representatives acting as strong advocates

for their colleagues. This is achieved by

encouraging reps to ask their colleagues for

views both generally and on the chosen ‘Big

Topics’ in advance of meetings. After each

meeting, reps share feedback with colleagues

and views and concerns raised are presented

to the Board.

The NCV is a valuable forum for colleagues

to engage, be listened to and see action as

a result. For example, the suggestion of an

additional discount to celebrate 40 years of

stores came from a NCV meeting, and

feedback on the launch of our ‘Home of You’

campaign, aimed at better understanding the

diverse backgrounds of our colleagues, led to

a review of our communications to ensure that

its purpose more clearly resonates going

forwards. We have also reviewed our

approach to colleague recognition as a result

of NCV discussions.

The NCV continues to be an important part

of the dialogue on colleague pay and reward,

as detailed further on pages 115.

11,500+

colleagues

Colleagues

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Stakeholder engagement continued

What they care about

Services that support their community and

local area

Re-use, repair and recycling services

Local employment and volunteering

opportunities

A business they are proud to have in their

neighbourhood

Charitable initiatives

Key management responsibility

Customer Director

Why we engage

By understanding local community needs and

concerns we build awareness and trust, help

evolve our customer offer, strengthen our local

reputation and provide another reason for

people to shop with us. We have also learned

how much our customers and colleagues

benefit from being involved in meaningful

local initiatives and by having direct means

of communication with their local store.

How we engage day-to-day

• Community champions for each region

facilitate the sharing of internal and external

feedback, learnings and ideas.

• Daily interaction with local store

communities via individual store Facebook

groups (organised by locally appointed

community champions).

• Feedback from local businesses and

community groups who use space in stores

and Pausa cafes.

• Regular meetings with our Group charity

partner, Age UK.

How the Board engages

• Receives updates on charity and community

initiatives.

• Reviews community-related KPIs, including

level of take-back and monies raised for

good causes.

How we have listened and learned —

highlights in FY24

• 125,000 gifts donated to local good causes

through ‘Delivering Joy’ campaign, doubling

the number of donated gifts.

• Schools summer ‘wish-list’ campaign.

• Group and colleague fundraising and

Group cash charity contributions of £1.1m

(FY23: £820k).

• Launched new partnership with Age UK,

committing to raise £2m in three years and,

amongst other things, held our inaugural

company-wide fundraising day.

• Undertook further trials for take-back, which

included rugs.

• Hosted repair workshops, including live

upcycling demonstrations.

• Partnered with ‘Too Good to Go’ in our

Pausa cafes to reduce food waste.

Communities

What they care about

Fair trading and prompt payment terms

Collaborating to maintain high ethical

standards and deliver on sustainability

initiatives

Long-term relationships

A growth opportunity for their business

Key management responsibility

Director of Commercial and Supply Chain

Why we engage

We work closely with our suppliers and

manufacturers worldwide to develop

relationships and business growth

opportunities through regular engagement,

and to ensure that we are aligned on the

importance of upholding our high quality,

ethical and environmental standards.

How we engage day-to-day

• Hold annual stock supplier conference and

regular webinars.

• Regular supplier meetings.

• Regular contact for our committed stock

suppliers with our design and commercial

teams, as well as our product quality,

compliance and sustainability teams.

• Dedicated procurement function engages

with non-stock suppliers.

How the Board engages

• Receives updates on ethical trading, product

quality, modern slavery, supplier payment

terms and whistleblowing reports.

• Receives updates on progress against

sustainability metrics.

• Ad hoc supplier meetings.

How we have listened and learned —

highlights in FY24

• Board held in-person meeting and Q&A

session with key suppliers.

• Held webinars with our key suppliers on

‘Better Manufacturing’, ethical standards

and packaging.

• Reviewed our protocols for non-compliance.

• Provided greater access to shared resources.

• Continued to collaborate on sustainability

initiatives and supported suppliers in

adopting a data monitoring standard and

action planning tool to underpin better

manufacturing.

• Extended whistleblowing service to all

supplier sites in seven different languages.

• Launched our gold supplier programme to

recognise suppliers who demonstrate

effective management of the supply chain

and empower them to become self-managing.

• Reviewed and updated our procurement

processes.

• 99% of invoices paid on time.

Suppliers

190+

local community

catchment areas served

by our stores and sites

1,200+

stock and non-stock suppliers

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Stakeholder engagement continued

What they care about

Strategy, performance and outlook

Returns

Strong leadership

Culture and shared values conducive to

good governance and high standards of

business ethics

Executive remuneration

ESG risks and opportunities

Key management responsibility

CEO and CFO

Why we engage

Meaningful engagement is key to building

trust and driving long-term success. It enables

us to better understand our investors’ priorities

and concerns. We help our shareholders and

their representatives to have a good

understanding of our business model,

strategy, investment opportunities and culture,

and we aim to be transparent and comply with

shareholder governance requirements.

How we engage day-to-day

• Executive Directors meet with investors

during the year.

• Arrange store visits.

• Discuss ESG-related matters on request.

• Via our corporate website.

How the Board engages

• Chair seeks regular engagement with major

shareholders on governance and

performance against strategy.

• Consults as appropriate.

• Attends results presentations and the AGM.

• Non-Executive Directors are available

to discuss any matter with shareholders

on request.

• Reviews AGM voting, shareholder comments

and proxy reports. Reviews investor roadshow

feedback.

• Governance and other meetings arranged

as appropriate.

How we have listened and learned —

highlights in FY24

• Held 69 meetings with shareholders

(excluding our largest shareholder) during

the year. In addition, our Chair met with

institutional investors to discuss a broad

range of topics including governance, strategy

and management.

• Hosted ‘At Home with Dunelm’, an event for

institutional investors and analysts to showcase

our product mastery and technology

development, which was held alongside our

Spring/Summer product show.

• 89.14% of issued share capital voted at FY23

Annual General Meeting.

• Continued strong cash returns, with £158m

paid in dividends.

• Integrated our ‘Good & Circular’ ESG

ambitions into our strategy and ways

of working.

• Continued to develop Board capabilities for

next phase of growth.

Shareholders

1,870+

shareholders including the

Adderley family

‘At Home with Dunelm’ investor event:

Spring/Summer 2024 product show.

Other stakeholders

We work with a number of other stakeholders

whose relationships are important to the

day-to-day running of our business. These

stakeholders tend to impact our business more

than we impact theirs and, in some cases,

engagement may be one-way. We monitor and

evaluate these relationships regularly and the

Board is informed as required. In all cases, our

approach is to seek to build long-term trusted

relationships based on fairness and respect,

consistent with our Code of Business Conduct

and our values.

Other stakeholders with whom we engage

include:

• Local and national UK Government bodies,

including HMRC.

• Industry bodies and working groups, such as

Textiles 2030, Better Cotton and the British

Retail Consortium.

• Regulators, including Leicestershire

County Council and Charnwood Borough

Council with whom we have a Primary

Authority relationship, and other bodies

such as the Health and Safety Executive,

Trading Standards and Environmental

Health Officers.

• Banks and other financial institutions.

• A trusted team of professional advisors (for

example, brokers, financial PR, accountancy

and recruitment firms, environment and

sustainability advisors).

• Shareholder representative bodies, ESG

investment and credit ratings agencies and

potential investors.

• Other business support providers e.g.

logistics, landlords (as the majority of our

stores are leased), technology and

construction/store development companies.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Section 172

Section 172 statement

Board decisions must balance the occasional conflicting needs

and priorities of our key stakeholders, whilst also considering

the likely consequences of such decisions in the long term.

Section 172 of the Companies Act 2006 (‘s.172’)

requires a director of a company to act in good

faith and promote the success of the company

for the benefit of its members as a whole. In

doing so, they must also have regard (amongst

other things) to a range of factors set out in

section 172(1) of the Companies Act, including

the interests of stakeholders.

Engagement with stakeholders plays a hugely

important role in ensuring that our Directors

fully understand their needs and make well-

informed decisions that consider different

priorities. We recognise that not every decision

will benefit all stakeholders, and we inevitably

have to make trade-offs between stakeholder

groups from time to time.

By taking account of the Company’s purpose

and values together with its strategic aims, and

closely following our decision-making process,

we aim to make sure that our decisions are fair

and consistent.

The preceding pages on stakeholder

engagement and pages 71 to 73 of the

Governance report provide examples of how

the Directors performed their s.172 duties

during the year.

The Board confirms that during the year under

review, it has acted to promote the long-term

success of the Company for the benefit of its

shareholders whilst having due regard to the

factors set out in section 172(1) (a) to (f) of the

Companies Act 2006.

Signed for and on behalf of the Board

Nick Wilkinson

CEO

The table below outlines other areas of this report that set out how the Board has had

regard to s.172(1) factors when making decisions:

s.172(1) factor Where to find more information

(a) likely consequences of any decisions in the

long term

Chair’s statement

Business model

CEO’s review

Stakeholder engagement

Board activities

(b) interests of the company’s employees

Stakeholder engagement

Non-financial and sustainability

information

Board activities

Remuneration Committee report

relationships with suppliers, customers

and others

Business model

Stakeholder engagement

(d) impact of the company’s operations on the

community and environment

CEO‘s review

Sustainability

TCFD report

Board activities

(e) desirability of the company maintaining

a reputation for high standards of

business conduct

Sustainability

TCFD report

Our approach to risk management

Governance report

(f) need to act fairly as between members of

the company

Business model

Stakeholder engagement

Directors’ report

116

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Key performance indicators

Measuring our progress

The Board uses a range of financial and non-financial key performance

indicators (‘KPIs’) to measure overall Group performance and the success

of our strategic direction in relation to our priorities.

Employee net promoter score

(‘eNPS’)

Year-on-year improvement ppts

–10ppts

Base

year

-9%

-5%

+1%

FY20 FY24FY23FY22FY21

Basis of measurement

Score based on responses to the

question ‘How likely are you to

recommend Dunelm as a place to

work’ from our colleague survey

which we conduct bi-annually.

The above results are from May

each year, apart from for FY20,

where November 2019 was used

due to postponement of the May

2020 survey.

Why this measure is important

Rates our colleagues’ experience

with us and the survey helps us

understand where we need

to improve.

FY24 progress

Our eNPS is above sector average,

and these scores reflect a high

response rate. Noting the

year-on-year decline, the feedback

received gives us valuable insight

which we are using to implement a

number of actions business-wide.

Scope 1 intensity reduction

% reduction against the base year

–53%

Base

year

-53%

-32%

-20%

FY24FY23FY22FY19

Basis of measurement

The reduction in Scope 1 carbon

emissions in tonnes per £m of

revenue, compared to our baseline

of FY19. For further details on all

carbon emissions, see our TCFD

report on pages 46 to 54.

Why this measure is important

Helps us understand how

successful we are in reducing our

impact on the environment and

progressing towards our long-term

carbon reduction targets.

FY24 progress

We have continued to make

progress in reducing our

Scope 1 emissions. Our store

decarbonisation programme

continues to make headway, and

carbon intensity reduced as a result

of using compressed natural gas

in our trunking fleet throughout

the year.

Market share

Absolute % market share

7.7%

5.1%

7.7%

7.1%

6.8%

5.8%

FY20 FY24FY23FY22FY21

Basis of measurement

Dunelm sales as a proportion of

the GlobalData UK combined

homewares and furniture markets,

excluding kitchen cabinetry and

bathroom furniture. Certain

Dunelm categories which are not

part of the GlobalData UK

homewares and furniture markets

are also excluded, such as rugs

and Pausa.

Why this measure is important

Demonstrates our performance

relative to the wider homewares

and furniture markets.

FY24 progress

We grew market share by 60bps

against a challenging backdrop,

owing to the strength and resilience

of our proposition.

Unique active customer growth

Year-on-year % growth

+5.1%

+3.8%

+5.1%

+2.8%

+8.5%

+12.2%

FY20 FY24FY23FY22FY21

Basis of measurement

Growth in unique active customers

who have shopped in the last 12

months, based on management

estimates using Barclays data. This

measure combines our active store

and online customers.

Why this measure is important

Measures the growth in our active

customer base and therefore our

ability to reach new customers.

FY24 progress

Unique active customers grew by

5.1% in FY24 alongside our market

share gains, demonstrating our

continued and growing customer

relevance and reach.

Net promoter score (‘NPS’)

Year-on-year improvement ppts

+1.9ppts

Base

year

+1.9%

-0.9%

-4.2%

+4.2%

FY20 FY24FY23FY22FY21

Basis of measurement

Weighted average NPS across store

and online channels. FY24 NPS

covers the nine months until

30 April 2024. In May 2024 we began

measuring customer satisfaction

(‘CSAT’), which instead shows the

percentage of customers who rate

their experience with us as 5/5. We

will report against CSAT from FY25.

Why this measure is important

NPS (and in future, CSAT) measures

how customers rate their overall

experience with us. Understanding

this is fundamental to retaining and

acquiring customers and informing

how we develop our offer.

FY24 progress

NPS improved slightly in the year

and going forward, in measuring

CSAT we anticipate driving new

insight into, and understanding of,

customer experience and driving

further improvements.

Diversity of our role-model leaders

% of role-model leaders from an

ethnic minority background

5.8%

3.8%

FY24FY23

Basis of measurement

Proportion of our role-model

leaders that come from ethnic

minority backgrounds. Role-model

leaders are defined as ‘Heads of’

and above and includes our

regional and store coaches, of

which we currently have around

300 across the organisation.

Why this measure is important

Ensuring our leadership and

colleague base is diverse and

representative of wider society

will lead to a better proposition for

our customers.

FY24 progress

The proportion of role-model

leaders from ethnic minority

backgrounds has increased by

2ppts to 5.8% by the end of FY24,

however we maintain a more

ambitious medium-term target.

Non-financial

Exec Rem Exec Rem

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Diluted earnings per share

Pence and growth %

74.4p

42.9

74.4

75.0

83.6

62.9

-14.0%

-0.8%

-10.3%

+32.9%

+46.6%

FY20 FY24FY23FY22FY21

Basis of measurement

Profit after tax attributable to

shareholders divided by the

average number of dilutive

outstanding shares (as per note 8

on page 140). Not that FY22

includes a 53rd week for statutory

reporting purposes.

Why this measure is important

Reflects overall profit after tax for

each share in the Company.

FY24 progress

FY24 dEPS was 74.4p, and -0.8%

on FY23. The slight year-on-year

reduction reflects the growth in

profit before tax offset by an

increase in the effective tax rate,

largely driven by the higher rate

of corporation tax introduced in

April 2023.

Total revenue

£m and growth %

£1,706m

1,058

1,706

1,639

1,581

1,336

-3.9%

+4.1%

+3.6%

+18.4%

+26.3%

FY20 FY24FY23FY22FY21

Basis of measurement

Total reported business revenue.

Note that FY22 includes a 53rd

week for statutory reporting

purposes.

Why this measure is important

Demonstrates our customer

appeal, showing how successful we

are at offering relevant products

through convenient and easy-to-

access channels.

FY24 progress

FY24 sales growth was 4.1%, with

full year revenue of £1.7bn. Both

digital and store channels were in

growth for the year.

Profit before tax

£m and % of sales

£205m

109

205

193

213

158

10.3%

12.0%

11.8%

13.5%

11.8%

FY20 FY24FY23FY22FY21

Basis of measurement

Profit before tax reported in £m and

as a % of total sales. Note that FY22

includes a 53rd week for statutory

reporting purposes.

Why this measure is important

Reflects our underlying financial

performance and the balance of

growth and grip exercised

throughout the year.

FY24 progress

FY24 PBT of £205m was 6.6%

ahead of the prior year, with PBT

margin improving to 12.0%

from 11.8% .

Free cash flow

£m

£132m

175

132

160

153

109

FY20 FY24FY23FY22FY21

Basis of measurement

Free cash flow is net cash

generated from operating activities

less capex (net of disposals), net

interest paid (including leases) and

loan transaction costs, and

repayment of lease liabilities. Note

that FY22 includes a 53rd week for

statutory reporting purposes.

Why this measure is important

Allows the Board to monitor cash

flows to support investment

decisions for long-term profitability,

or to return surplus cash to

shareholders.

FY24 progress

Free cash flow of £132m represents

62% of operating profit. This is

lower than in FY23 due to increased

capex, higher interest and tax rates,

and a working capital outflow, due

to timing on payables and the

impact on inventory of delayed

shipping routes.

Key performance indicators continued

We have long-term remuneration targets for

Executive Directors including a range of

financial and non-financial targets. Where

relevant, we have highlighted where Group

KPIs are also remuneration metrics.

Annually, we review our Group KPIs to ensure

that they remain the most relevant indicators of

the overall effectiveness of the Company, whilst

maintaining consistency. The following metrics

which were previously reported as Group KPIs

can be found in our Sustainability Report 2024:

• Reduction in virgin plastic packaging of

own-brand products.

• Percentage of own-brand products where

we offer a take-back service.

• Percentage of own-brand products which

meet our ‘More Responsibly Sourced

Cotton’ standard.

Measures used in FY24 executive remuneration can be

found in the Annual Report on Remuneration from page 101.

Further information on the performance criteria that apply

to the FY25—27 LTIP award can be found on page 113.

Exec Rem

Financial

Exec Rem Exec Rem Exec Rem

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

CFO’s review

Continued profitable

growth and cash returns

In a challenging market which declined

year-on-year, our combined homewares and

furniture market share increased by 60bps to

7.7%

. This continues our strong track record

of share gains, and we remain confident in our

ability to keep growing our share of this large

and fragmented market.

Total active customers increased by 5.1%

, an

acceleration on the previous year (FY23: +2.8%),

with growth across all customer age, income

and geographical cohorts. In a year where we

invested in brand awareness, we saw particularly

strong growth rates in London and in younger

(16—24 years) demographics. We were also

pleased to see expansion in both multi-channel

shoppers and those who shop only in-store or

online, demonstrating the strength of our total

retail system.

Gross margin

Gross margin was strong at 51.8%, 170bps

ahead of FY23 (FY23: 50.1%). Throughout the

year we benefitted from a freight tailwind (partly

offset by a foreign exchange headwind), despite

Red Sea volatility and resulting surcharges. We

are pleased that sales volumes grew alongside

this strengthened margin, as we worked with

our suppliers and applied operational grip to

maintain our outstanding value proposition

for customers.

Total sales for the period to 29 June 2024 grew

by 4.1% to £1,706m (FY23: £1,639m), with

growth in all quarters of the year, despite ongoing

uncertainty in our market. We are pleased that our

sales progression was again driven by volume,

which was up 6.2% supported by the strength

and relevance of our proposition. The impact

of pricing was broadly stable, and we saw an

overall reduction in average item values driven

by the product mix of sales. Both store and

digital channels grew year-on-year, and digital

participation increased again, up 1ppt to 37%.

Customers continue to respond well to the

breadth of our ranges, which we expanded

throughout the year, ensuring that it remained

curated and relevant. Overall growth was broad-

based across categories, demonstrating our

customer appeal and the resilience of our

proposition. We continue to benefit from

elevating our product offer, with our ‘Cook &

Dine’ and upholstered furniture categories

maintaining their strong performance from the

first half of the year. We also saw significant

growth in our made-to-measure window

treatments, where we have continued to expand

our capability, bringing more of the manufacturing

in-house and introducing new ranges such as

Venetian blinds. Towards the end of the year,

whilst seasonal ranges saw softer sales during a

cooler spring and summer period, the Summer

Sale performed particularly well, with customers

taking advantage of both the discounted offers

available, and shopping for full-priced products

and new ranges.

FY 2024

Total Group sales

£1,706.5m

+4.1% YoY

Digital % total sales

37%

+1ppt YoY

Market share

£7.7%

60bps YoY

Active customer growth

+5.1% YoY

1. GlobalData UK combined homewares and furniture markets,

excluding kitchen cabinetry and bathroom furniture, for the

period July 2023 to June 2024. Prior year comparative restated.

2. Growth in unique active customers who have transacted at least

once in the 12 months to June 2024. Management estimates

using Barclays data.

We remain confident and

committed to investing in

the business for the long term,

to drive sustainable and

profitable growth.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

CFO’s review continued

Despite the ongoing challenging consumer

environment, we have continued to invest in

the business for the long-term, investing £25m

in the year on new store openings, continuing

to improve our digital proposition, and

strengthening brand awareness and customer

reach with our ‘Home of Homes’ campaigns.

Our new store opening programme accelerated

to six new store openings (including one

relocation) in the year, and we now plan for 5—10

new stores per year over the medium term.

We continue to apply tight operational grip to

cost management, and in the year we generated

productivities and efficiencies of £11m,

including savings from the optimisation of

performance marketing costs, distribution cost

savings from exiting external storage facilities,

and continued process improvements in stores.

As we move forward, as well as focussing on

further continuous improvement initiatives, we

will be investing in programmatic activities to

help mitigate the impact of a wage inflationary

environment. Alongside this, we remain

committed to investment for long-term

profitable growth from our strategic priorities.

Profit and earnings per share

Operating profit of £213m was £14m higher

than the prior year (FY23: £199m), reflecting

sales growth and gross margin expansion

coupled with tight operational cost control in an

environment where wage inflation continues to

be a headwind.

In a year of higher base rates, net finance costs

of £8m (FY23: £6m) included interest on IFRS 16

lease liabilities of £6m (FY23: £5m). Our strong

cash flows and low levels of debt meant other

financing costs did not put pressure on

the business.

spend, and also included the impact of a

non-recurring deferred tax adjustment, as

previously reported. Going forward, we expect

the effective tax rate to trend between 50bps

and 100bps above the headline tax rate of 25%.

Basic earnings per share (EPS) for the period was

74.7 pence (FY23: 75.2 pence). Diluted earnings

per share was 74.4 pence (FY23: 75.0 pence).

Cash generation and net debt

In the period, the Group generated £132m of

free cash flow (FY23: £160m), with conversion

of operating profit to free cash flow of 62%

(FY23: 81%). The lower conversion year-on-year

is driven by higher capex, increased tax paid

and a working capital outflow.

In FY25 we will continue to tightly manage our

input costs to deliver a continued strong gross

margin, alongside outstanding value to

customers. With year-on-year freight benefits

now largely annualised and Red Sea disruption

ongoing, we currently expect FY25 gross

margins to be within a range of 51%—52%.

Operating costs

Total operating costs were £670m (FY23: £622m)

representing an operating costs:sales ratio of 39.3%

(FY23: 38.0%). The year-on-year increase in the

costs:sales ratio reflects ongoing inflationary

pressures, and although we have partially offset

these with productivity gains across our operations,

our commitment to long-term investment in the

business and the volume-driven nature of our

sales growth means that as expected, there has

been an increase in operating costs relative to

sales. We focus on managing operating costs

whilst optimising our overall operating margin

to deliver long-term profitable growth.

The volume-driven nature of our sales growth

resulted in an incremental £14m of variable

costs, primarily across performance marketing

and in our supply chain. Looking ahead, we

expect our sales growth to continue to be

volume driven.

We have seen another year of inflationary

headwinds, which increased costs by £20m for

the year, consistent with the impact we saw in

FY23. The main driver of this was wages, with the

largest element of our cost base being the cost

of hourly-paid colleagues. This cost has been

impacted by the National Living Wage increasing

by close to 10% in each of the last two years.

Whilst we do not have visibility of the National

Living Wage increases going forward, we

expect this inflationary headwind to persist for

some time. Therefore, we expect inflation in our

operating cost base to continue at 3—4% in FY25.

Profit before tax in the period was £205m (FY23:

£193m) with PBT margin of 12.0% (FY23: 11.8%).

In FY25, we expect PBT margin to remain

broadly stable, reflecting the balance of volume-

driven sales growth, strong gross margin and

grip on operating costs in an inflationary

environment, alongside a commitment to

continued investment.

Profit after tax of £151m (FY23: £152m) reflected

an effective tax rate of 26.4% (FY23: 21.2%), the

5.2ppt increase largely due to the annualisation

of the higher UK headline rate of corporation tax

introduced in April 2023. The effective tax rate

was 140bps higher than the 25% headline rate,

as we had slightly more disallowable

expenditures in FY24 due to higher new store

Cash generation and net debt

FY24

£m

FY23

£m

Operating profit 213.3 198.8

Depreciation and amortisation

82.0 79.4

Net movement in working capital (17.7) (4.2)

Share-based payments 4.3 4.8

Tax paid (49.6) (38.2)

Net cash generated from operating activities 232.3 240.6

Capex and business combinations (39.9) (21.8)

Net interest and loan transaction costs

(3.3) (1.1)

Interest paid on lease liabilities (6.1) (5.3)

Repayment of principal element of lease liabilities (50.8) (52.0)

Free cash flow 132.2 160.4

1. Including impairment and loss on disposal

2. Excluding interest on lease liabilities

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

CFO’s review continued

After total dividend payments in the period of

£158m (FY23: £163m), the Group ended the

year with net debt

of £56m (FY23: £31m).

Banking agreements

At the year end, the Group had in place a

£250m unsecured revolving credit facility

(“RCF”). The terms of the RCF included

covenants in respect of leverage (net debt

be no greater than 2.5× adjusted EBITDA

) and

fixed charge cover (EBITDAR

to be no less than

1.75× fixed charges

), both of which were met

comfortably as at 29 June 2024. A one-year

extension to the facility was agreed in August

2024, with a maturity date of September 2028.

The terms are consistent with normal business

practice and the covenants are unchanged.

There is an option to extend by another year at

Dunelm’s request, subject to lender consent.

The Group also maintains £10m of

uncommitted overdraft facilities.

Going concern

At the time of approving the financial

statements, the Board of Directors is required to

formally assess that the business has adequate

resources to continue in operation and as such

can continue to adopt the ‘going concern’ basis

of accounting. To support this assessment, the

Board is required to consider the Group’s current

financial position, its strategy, the market outlook

and its principal risks.

The Directors continue to assess the risks that

climate change poses to the business. Currently,

climate change is not expected to have a

significant impact on the Group’s going concern

assessment or on the viability of the Group over

the next three years.

Reverse stress modelling has demonstrated that

a prolonged sales reduction of 26% in each year

is required to breach covenants by the end of

FY26 and a 42% sales reduction in each year is

required to breach the RCF limit by the end of

FY26, assuming reasonable mitigating actions

have been implemented.

Even in such an event, management would

follow a similar course of action to that initially

undertaken during the COVID-19 pandemic.

Such actions could include reductions in

discretionary spend and delaying investments.

The working capital outflow in the period

was £18m (FY23: £4m outflow). The main

contributing factors driving the outflow were

the timing of a VAT payment and the impact on

inventory of delays in our main shipping route,

which we continue to manage well operationally.

We expect working capital to be broadly neutral

for FY25.

Total capital investment was £40m (FY23:

£22m), in line with our guidance. Capex of

c.£25m related to stores, including the six new

superstores opened in the year, 13 refits of

existing stores and our ongoing decarbonisation

programme. In June 2024 we purchased a

tenanted non-retail freehold property for £8m,

providing current rental income and future

capacity for our support centre.

In FY25 we expect our capital expenditure to

increase to £50m—£60m. In line with previous

guidance, we expect to open 5—10 new

superstores (as in FY24, broadly evenly split

between larger and smaller sites

), and we now

expect new openings to continue at this rate for

the medium term. In the early part of the new

financial year, we secured a freehold tenanted

retail property in an attractive location for £22m

which we plan to convert to a Dunelm format in

the future. Whilst we expect the majority of our

new openings to be leasehold, we have the

capacity to purchase freeholds where there

are sufficiently attractive returns.

Cash tax paid was £50m (FY23: £38m),

reflecting the higher effective tax rate.

In the period, the Group did not purchase

any shares to be held in treasury (FY23: £7m).

The Group held 1.2m shares in treasury as at

29 June 2024, sufficient to satisfy future

obligations under its employee share schemes.

The key judgement that the Directors have

considered in forming their conclusion is the

potential impact on future revenue, profits and

cashflows of a downturn in consumer spending

away from homewares, due to the ongoing

impact of sustained inflation, as well as the

impact of broader economic uncertainty across

a three-year review period. This scenario could

result in no growth in Year 1 and lower sales and

higher costs across all channels throughout the

review period. The Directors have also

considered a deeper downturn in consumer

spending away from homewares, resulting in

negative growth in Year 1 and lower sales and

higher costs across all channels throughout the

review period.

In both downside scenarios Dunelm has

sufficient liquidity to continue trading, including

maintaining the payment of dividends in line

with the business’ dividend policy, and to

comfortably meet financial covenants.

1. Larger superstores c.30,000 sq ft, smaller superstores

c.15,000 sq ft.

2. Excluding lease liabilities. Full definition provided in the table

of alternative performance measures.

3. Excluding lease liabilities. Full definition provided in the table

of alternative performance measures.

4. Adjusted EBITDA defined as EBITDA less depreciation on

right-of-use assets.

5. EBITDAR defined as EBITDA plus rent.

6. Fixed charges are defined as net interest costs plus right-of-use

asset depreciation plus rent.

Our tax strategy

FY24

£m

FY23

£m

Net VAT collected 173.0 164.7

Payroll taxes including National Insurance

60.8 56.2

Corporation tax 49.5 38.2

Plastic packaging tax 0.0 0.1

Total tax contributions 283.3 259.2

7. All Dunelm colleagues are based in the United Kingdom, except for 50 colleagues who work in our store in Jersey. Payroll taxes for

FY22 have been restated.

Dunelm is committed to full compliance with all statutory obligations and full disclosure to tax authorities. The

Group’s tax affairs are managed in a way that is consistent with the Group’s commitment to high standards of

governance. The Board has established a set of principles that form the basis of the management philosophy

and the tax policy of the Group. These principles can be found in full in our Group Tax Strategy which is

published on our corporate website and reviewed each year. Our Group Tax Strategy sets out one shared vision

within the Group of tax compliance and one view of performance.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

FY24

43.5

35.0

FY23

42.0

40.0

FY22

40.0

37.0

FY20 FY21

35.0

65.0

FY19

28.0

32.0

FY18FY16

25.1

31.5

FY17FY15

21.5

70.0

FY14FY12 FY13

16.0

25.0

FY11FY10

8.0

21.5

FY08FY07 FY09

78.5

82.0

77.0

100.0

60.0

26.5

56.6

26.0

91.5

20.0

14.0

41.0

11.5

29.5

5.5

3.8

6.0

CFO’s review continued

Dividends

The Board has proposed a final ordinary

dividend of 27.5 pence per share, recognising

our performance in the year and ongoing

confidence in the business. This takes the full

year ordinary dividend to 43.5 pence per share,

3.6% ahead of the 42.0 pence per share paid in

FY23, with dividend cover

of 1.71×. Whilst

dividend cover is slightly below the range set

out in the Group’s policy, the Board considers

the level of cover appropriate in light of the 6.6%

year-on-year increase in PBT, with earnings

impacted by the increase in effective tax rate,

including a non-recurring impact. The final

dividend will be paid on 26 November 2024

subject to approval by shareholders at the AGM

on 21 November 2024. The ex-dividend date is

31 October 2024 and the record date is

1 November 2024.

We paid total dividends of £158m in the year,

including a special dividend of £71m.

Karen Witts

Chief Financial Officer

11 September 2024

As a result, the Board believes that the Group

is well placed to manage its financing and other

significant risks satisfactorily and that the Group

will be able to operate within the level of its

facilities and meet its liabilities as they fall due,

for at least the next three years. For this reason,

the Board considers it appropriate for the

Group to adopt the going concern basis in

preparing its financial statements.

Capital and dividend policies

The Board policy on capital structure targets

an average net debt level (excluding lease

obligations and short-term fluctuations in

working capital) of between 0.2× and 0.6× the

last 12 months’ EBITDA

. The Group expects

to maintain or steadily increase the absolute

amount of each dividend payment in line with

the growth of the business.

The Group’s dividend policy targets ordinary

dividend cover of between 1.75× and 2.25×

earnings per share during the financial year to

which the dividend relates. The Board may allow

a temporary fall in dividend cover requirements

in order to maintain the dividend.

The Board will continue to consider returning

surplus cash to shareholders if average net

debt, excluding lease liabilities, over a period,

consistently falls below the minimum target of

0.2× EBITDA

, subject to known and anticipated

investment and expenditure plans at the time.

The Group’s full capital and dividend

policies are available on our website at

corporate.dunelm.com

1. EBITDA defined as operating profit plus depreciation and amortisation of property, plant and equipment and intangible assets plus loss

on disposal and impairment of property, plant and equipment and intangible assets plus depreciation on right-of-use assets.

2. Dividend cover is calculated as earnings per share divided by the total ordinary dividend relating to the financial year.

3. Ordinary dividends plus special distributions.

Capital and dividend policies

• Target average net debt between 0.2×

and 0.6× the last 12 months’ EBITDA.

• Ordinary dividend cover of between 1.75×

and 2.25× earnings per share during the

financial year to which the dividend relates.

• Return surplus cash if net debt consistently

falls below the minimum target of

0.2×EBITDA.

Dividend history (pence per share)

Ordinary dividend

Special distributions

Significant shareholder

returns since IPO

Ordinary dividend CAGR

15%

Cash returned to shareholders

C. £1.5bn

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

The Home of Homes:

Committed to being

good & circular

Dunelm Group plc

Sustainability report 2024

Sustainability

Our approach to sustainability:

Being Good & Circular

As the UK’s leading homewares retailer, we have both a passion and an

obligation to do the right thing. This means remaining ambitious about being

a company that focuses on growing sustainably. It means long-term thinking

combined with shorter-term, achievable goals. It means being good and

circular, a core part of our customer proposition. Our approach is outlined

below, recognising that we want to look after all our homes:

A home for

our People

We recognise the Planet provides the

resources we use to create our products.

We have a role in the Communities where

our stores and sites operate.

We create a home for People working in both

our business and our wider supply chain.

Our home in

Communities

Our home

the Planet

Protecting all of our Homes

Our strong corporate and ESG governance frameworks, holistic approach to risk management and well-established codes of conduct and policies

protect our stakeholders and preserve value in our business.

Read more on our

commitment to being

good and circular in our

Sustainability Report 2024

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Sustainability continued

Being Good & Circular in FY24: key highlights

• Reduced our overall Scope 1 carbon emissions by 27%

from our FY19 baseline despite strong sales growth of 53%

over the same period.

• Increased the number of own-brand products in our

Conscious Choice range to c.26% from c.15% last year.

Conscious Choice products are made from at least 50%

‘More Responsibly Sourced’ materials (by weight) when

compared to conventional alternatives available

from Dunelm.

• Developed our circularity strategy and worked with

product teams to implement circular design principles into

product development.

• Launched the Higg Facility Environmental Module (‘FEM’)

for our Tier 1 suppliers as part of our Better Manufacturing

programme. At the end of FY24, over 80% of our Tier 1

suppliers completed and disclosed data to the Higg FEM.

• Doubled the number of gifts donated to over 125,000

during our ‘Delivering Joy’ campaign in December 2023,

our biggest year yet.

• Raised £1.8m over three successful years of working with Mind.

In January we launched our new charity partnership with Age

UK, with a commitment to raise £2m over the next three years.

• Expanded our Home to Home scheme, where customers

can donate pre-loved and good quality homewares such as

crockery and glasses in our stores, to 39 stores, with

support from Age UK.

• Continued to run in-store repair pilots with workshops,

drop-in repair cafes and live demonstrations to engage local

customers and communities on extending product lifetimes.

• Grew the popularity of our in-store textile takeback service,

with customers now, on average, bringing c.98 tonnes of

textiles to stores each month.

• Colleague retention increased to 89% from 87% in FY23.

• Further developed our colleague benefits package by

introducing a new £10,000 Life Assurance benefit.

• Built on our Role Model Leadership programme with 86

enrolments to a year-long development scheme.

• Continued to listen and respond to colleagues through an

expanded programme of engagement surveys.

• Launched our ‘Reach’ development programme for

colleagues from underrepresented ethnic groups,

providing skills training, connection and career

advancement opportunities.

• Introduced a data literacy campaign for colleagues to build

knowledge and capabilities within the business.

Our home the Planet A home for our PeopleOur home in Communities

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

In the following pages, we present information

relating to the non-financial reporting

requirements as contained in sections 414CA

and 414CB of the Companies Act 2006. These

include our commitment to and management

of environmental and social matters (as listed in

the requirements) and how these impact our

business and key stakeholders (including, for

these purposes, the Planet). We include links to

some of our relevant policies and references to

where additional information can be found both

within and outside this report. In addition, our

business model can be found on pages 10 to 11

and our principal risks, which are linked to each

stakeholder group (as appropriate), are set out

on pages 40 to 45.

Our approach

Our vision is to build the UK’s most trusted and

valuable brand for homewares and furniture.

We have a legal and moral obligation to

develop and sell products that are safe to use

(and safe to eat from our Pausa cafes) and that

are accurately and fairly labelled, marketed and

sold to our customers. We must also provide a

safe environment for our customers to shop —

whether in store, online or receiving home

deliveries. As we increase our customer

engagement, we have a responsibility to look

after and treat our customers’ personal data

and information with respect and integrity.

Increasingly, we are giving our customers the

option to choose from a range of products that

are sourced ‘more responsibly’ (with strict

qualifying criteria set).

Our outcomes

Alongside measuring customer numbers and

shopping frequency, we predominantly

measure the outcomes relevant to our approach

through our customer Net Promoter Score

(‘NPS’). We will report using a Customer

Satisfaction Score (‘CSAT’) from FY25.

Non-financial and sustainability

information statement FY24

Non-financial and sustainability information

Customers

Some of our relevant policies

(see website: corporate.dunelm.com)

• Data Security and Privacy Policy

• Health and Safety Policy

Where to find more information

and outcomes in this report Page/s

Customer proposition in the

business model 11

Stakeholder engagement

and s.172 statement 20—25

Net promoter score 26

Principal risks and uncertainties 40—45

Additional information outside

this report

• Sustainability Report 2024

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Gender breakdown, year-end FY24 versus year-end FY23

Female Male

Total

FY24FY24 FY23 Change FY24 FY23 Change

Group Board 5 5 0 7 6 +1 12

42% 45% -3% 58% 55% +3%

Senior leadership

12 17 -5 18 17 +1 30

40% 50% -10% 60% 50% +10%

Store

colleagues

6,376 6,499 -123 2,433 2,351 +82 8,809

72% 73% -1% 28% 27% +1%

All

colleagues

7,582 7,669 -87 3,990 3,828 +162 11,572

66% 67% -1% 34% 33% +1%

1. Senior leadership for these purposes means our Executive Team (excluding Executive Directors who sit on the Group Board) and

members of our Dunelm leadership team.

Non-financial and sustainability information continued

Note: This data covers 92% of all colleagues.

Ethnicity data

1. White — British 79%

2. White — Other 6%

3. Asian British 9%

4. Black 3%

5. Multi-ethnic 2%

6. Other 1%

Colleagues

Some of our relevant policies

(see website: corporate.dunelm.com)

• Data Security and Privacy Policy

• Health and Safety Policy

• Equality and Diversity Policy

• Whistleblowing Policy

• Anti-corruption and Anti-bribery Policy

• Domestic Abuse Policy

• Colleague Code of Conduct

• Code of Business Conduct

Where to find more information

and outcomes in this report Page/s

Chair’s statement 4—5

CEO’s review 14—19

Stakeholder engagement,

s.172 statement and

‘Our approach to s.172’ in the

Governance report 20—25,72

Employee net promoter score 26

Sustainability 32—33

Principal risks and uncertainties 40—45

Culture and values 68—70

‘Diversity and inclusion’ in

Nomination Committee report 79

Remuneration Committee

report 89—115

Additional information outside

this report

• Sustainability Report 2024

• Gender Pay Report 2024

• Slavery and Human Trafficking Statement

Our approach

We are committed to treating our colleagues

fairly, to reward them appropriately for the work

they do and to give them opportunities to

develop and learn. We want them to be heard

and feel connected to our business and to feel

‘at home’ in a safe and inclusive working

environment. We continue to support their

mental and financial wellbeing — particularly

given the pressures on our colleagues in the

current UK economic environment.

Our commitment to protecting colleagues can

be found in our Code of Business Conduct and

Colleague Code of Conduct. All colleagues are

obliged to comply with our Anti-corruption and

Anti-bribery Policy and are trained upon induction.

We continue to focus on achieving diversity and

gender balance across all levels of the business.

Our median gender pay gap of 5.5% and our

mean gender pay gap of 16.9% reflect that 70%

of our colleagues are women, 90% of whom are

in hourly-paid, predominantly store roles.

We work with our colleague network groups to

understand possible barriers and challenges to

progression and have adapted policies as a

result. We have expanded our apprenticeship

programme to improve social mobility.

Our outcomes

Alongside a number of colleague and culture

metrics (including colleague retention and

promotion from within) we predominantly

measure the outcomes of the above through

our employee net promoter score (eNPS).

Colleague network groups

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Non-financial and sustainability information continued

Our approach

We are increasingly making more meaningful

connections to support thriving, purpose-driven

communities in and around our stores and other

sites. We want to be known as the brand that

puts community at the heart of its business to

help people feel more at home by expanding

community initiatives and services (including

our take-back services which are highly popular

and valued by our store communities).

Alongside promoting Group-wide fundraising

activities we encourage colleagues to support

local charities, businesses and community

groups. We are also committed to full compliance

with all statutory tax obligations and full

disclosure to tax authorities.

Our outcomes

At a Group level we track the amount of Group

and colleague fundraising and Group cash

charity contributions. Informally, we monitor the

number of store Facebook group followers and

the number of small businesses and community

groups that we support at the store level.

Our approach

We have a responsibility to protect and respect

human rights and to uphold high ethical

standards in our supply chains. We set out our

minimum expectations in our Ethical Code of

Conduct for Suppliers and Partners that applies

to all businesses involved in the production of

goods for Dunelm and we use a risk-based

approach in our ethical auditing programme to

monitor supply chain practices against our

standards. We aim to work collaboratively with

suppliers to achieve continuous improvement

through increased engagement and education

— including environmental and product quality

standards, alongside ethical considerations. We

are committed to treating our suppliers properly

in accordance with agreed terms and conditions

and to paying them promptly.

Our outcomes

We have set a Group target to increase the

roll out of our Conscious Choice range which

promotes more sustainable practices. We have

also set sustainability metrics for other sourced

materials such as timber and palm oil.

Suppliers

Some of our relevant policies

(see website: corporate.dunelm.com)

• Whistleblowing Policy

• Anti-corruption and

• Anti-bribery Policy

• Ethical Code of Conduct for Suppliers and

Partners

• Responsible Animal Welfare Policy

• Responsible Cotton Policy

• Responsible Palm Oil Sourcing Policy

• Responsible Timber Policy

• Competition Law Policy

Where to find more information

and outcomes in this report Page/s

Stakeholder engagement

and s.172 statement 20—25

Sustainability 32—33

Principal risks and uncertainties 40—45

Additional information outside

this report

• Sustainability Report 2024

• Slavery and Human Trafficking Statement

Communities

Some of our relevant policies

(see website: corporate.dunelm.com)

• Tax Strategy

• Responsible Cotton Policy

• Responsible Timber Policy

Where to find more information

and outcomes in this report Page/s

Chair’s statement 4—5

CEO’s review 14—19

Stakeholder engagement

and s.172 statement 20—25

Sustainability 32—33

Principal risks and uncertainties 40—45

Additional information outside

this report

• Sustainability Report 2024

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Non-financial and sustainability information continued

Planet

Some of our relevant policies

(see website: corporate.dunelm.com)

• Environmental Policy

• Plastic and Packaging Policy

Where to find more information

and outcomes in this report Page/s

s.172 statement 25

Scope 1 carbon intensity

reduction 26

Principal risks and uncertainties 40—45

Task Force on Climate-related

Financial Disclosures report 46—54

Streamlined Energy and

Carbon Reporting 53

Chair’s introduction in the

Governance report 57—58

‘Our approach to s.172’

in the Governance report 72

‘Sustainability reporting’ in

Audit and Risk Committee 84

ESG metrics within Executive

remuneration 105,106

Additional information outside

this report

• Sustainability Report 2024

Our approach

Our investment in resources to focus on being

good and circular (a central part of our business

model and overall approach to sustainability)

has increased the level of awareness across the

business for the need to take urgent action to

reduce our impacts on the planet. Our goal is to

reduce our absolute greenhouse gas (‘GHG’)

emissions by 50% by FY30 against a FY19

baseline. We have had our near-term and net

zero targets validated by the SBTi, which sees

us align to the latest climate science from the

Intergovernmental Panel on Climate Change

(IPCC). We support the British Retail Consortium’s

Climate Action Roadmap to achieve net zero by

2040, and we are a partner member of Textiles

2030, with a commitment to meet their carbon

and water footprint reduction targets. We

remain focused on reducing operational waste,

including plastics and other packaging, and

exploring product circularity solutions.

Our outcomes

We have made considerable progress in better

understanding the most significant sources of

GHG emissions along our supply chains, using

our “improve-innovate-advocate” approach.

Metrics relating to Scope 1 carbon emissions

intensity are set as Group KPIs to maintain our

focus. Although we are still at an early stage,

we are making headway in our product

circularity plans.

Greenhouse gas emissions and Streamlined

Energy and Carbon Reporting information can

be found on page 53.

Our approach

We strive to provide our shareholders with as

clear a picture as possible of our business and

our prospects — both financial and non-financial

— in order to enable them to make informed

investment decisions. We give various

opportunities for shareholders to meet our

Board and management through scheduled

meetings and on request. We provide regular

overviews of our governance arrangements and

our progress in non-financial reporting.

Our outcomes

Our focus on sustainable returns has led to

progressive ordinary and special dividends. We

have returned c.£1.5bn since IPO to shareholders

through dividends and special distributions.

Shareholders

Some of our relevant policies

(see website: corporate.dunelm.com)

• Capital and Dividend Policy

• Employment of Former Employees of the

External Auditor Policy

• Tax Strategy

• Anti-corruption and Anti-bribery Policy

Where to find more information

and outcomes in this report Page/s

Stakeholder engagement

and s.172 statement 20—25

Principal risks and uncertainties 40—45

‘Our approach to s.172’ in the

Governance report 72

‘Sustainability reporting’ in

Audit and Risk Committee

and s.172 statement 84

ESG metrics in Executive

remuneration 105,106

Additional information outside

this report

• Sustainability Report 2024

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Risks and risk management

Our approach to

risk management

The Board as a whole is responsible for the management of risk throughout the

Group and ensures that our strategic objectives are in line with our risk appetite.

Risk governance

The Board is supported by the Audit and Risk

Committee, which monitors the ongoing

effectiveness of our risk management

framework and receives independent assurance

on the effectiveness of our approach to risk

management and internal control systems

through the activities of internal audit.

For more information on the management

of our internal controls see page 86

There is a formal process for setting the risk

appetite and for identifying, assessing, and

reviewing risks, as described further on the

following pages. Risks inevitably evolve and

change over time and the Board acknowledges

that the risk management framework, and our

system of internal controls, are designed to

manage such risks appropriately, rather than

eliminate them.

Risk management

We have an established Risk and Resilience

Committee (‘R&R Committee’) which is chaired

by the CFO and meets monthly. It comprises

risk owners from various business areas and

senior representatives from our compliance

functions. A representative from internal audit

also attends the meetings to provide additional

insight and challenge.

R&R Committee meetings also consider regular

reports from key compliance areas (such as data

protection and information security, regulated

credit, health and safety, ethical sourcing, store

security and business conduct) as well as status

updates on any outstanding internal audit

actions. A summary of the R&R Committee’s

activities and findings is reported on a regular

basis to the Audit and Risk Committee.

A review of the structure and role of the R&R

Committee during the year, and its attendees,

provided assurance that there is a strong and

sound foundation of risk management practices

within the business, supported by a regular

cadence of updates and reporting activity.

Risk identification and prioritisation

We adopt a top-down and bottom-up

approach to ensure that there is an overarching

view of Group risks. This is considered monthly

by way of the KRIs presented to the R&R

Committee, and also more formally by way of

a biannual review of the key operational risks

(presented by each respective operational risk

(presented by each respective principal risk

owner). As part of the assessment, the key

operational risks are mapped to the principal

risks to enable appropriate challenge to those

previously identified as most material to

the Group.

The R&R Committee’s key purpose is to develop

and review the risk management framework to

ensure that it is effective and assist the Board

and Audit and Risk Committee in their oversight

of risk management. At each meeting there is

a review of the leading and lagging key risk

indicators (‘KRIs’) associated with Dunelm’s

principal risks, enabling management to discuss

and take proactive steps to further mitigate as

may be appropriate. In addition, on an ad hoc

basis, the R&R Committee conducts deep dives

into specific risks that may be trending upwards

or retaining a high residual risk impact.

Individual members of the Executive Team

and senior leadership have responsibility for

managing the risks and mitigating controls

for their respective business areas, as well as

considering any new and emerging risks

specific to their own areas of the business and

on a wider enterprise basis. They do this by

maintaining their own operational risk registers

and having responsibility for ensuring that any

material issues, trends or emerging risks are

escalated to the R&R Committee as appropriate.

They are also responsible for ensuring that there

has been appropriate consideration of all

relevant risks when defining strategy, proposing

business cases and implementing decisions.

The assessment considers both the inherent risk

(before mitigation) and residual risk (after mitigation

is applied). The output of the assessment is

reported to the Audit and Risk Committee for

challenge and consideration ahead of being

presented to the Board for review and approval.

Risk appetite

The Board sets the risk appetite for the Group,

taking into consideration the expectations of

our shareholders and other stakeholders and

our internal culture. The clear articulation of our

risk appetite provides an effective mechanism

to inform investment decisions, facilitate the

discussion of risk, set parameters within which

objectives must be delivered, and support

the awareness of risk by our colleagues and

partners. The Board reviewed the Group risk

appetite in the year and confirmed that it

remains appropriate.

Key operational risks are

mapped to the principal

risks to enable appropriate

challenge to those

previously identified as

most material to the Group.

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Annual Report and Accounts 2024

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Risk management framework

Risk governance

Group Board

• Overall responsibility for the risk

management framework.

• Sets the risk appetite for the Group.

• Responsible for ensuring that effective

internal control and risk management

systems are embedded within

the business.

• Conducts assessment of

principal risks.

Audit and Risk Committee

• Responsible for assessing the ongoing

effectiveness of the Group’s risk

management framework, controls

and processes.

• Approves the internal audit programme

and undertakes an independent

review of action plans to mitigate

and manage material risks.

• Reviews principal risks for

presentation to the Board.

Independent assurance

Internal audit

• Provides independent assurance to

the Board, Audit and Risk Committee

and management on the effectiveness

of risk management and internal

control systems.

• Conducts independent audits of risks

to the business in accordance with

risk-based internal audit programme.

Risk-based reviews

• Conducts specialist third-party reviews

as required.

Risk and Resilience Committee

• Responsible for developing and

reviewing the risk management

framework and processes.

• Supports the Board and Audit and

Risk Committee in their oversight of

risk management.

• Conducts reviews of the principal risks.

• Identifies and manages risks as

they arise.

• Monitors Key Risk Indicators.

• Provides a forum to assess progress

under action plans to mitigate and

manage risks.

• Conducts deep dives into areas of

operational risk.

• Reviews reports on key compliance

areas: health and safety; data

protection and information security;

regulated credit; ethical sourcing;

store security and business conduct.

Risk and control owners

Individual members of Executive Team or senior leadership

• Primary responsibility for identifying,

assessing and managing risk in area of

responsibility within risk appetite.

• Maintains operational risk register

in area of responsibility.

• Escalates key risks and concerns

as appropriate.

Bottom-up

review of risks

Top-down

review of risks

Risks and risk management continued

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Principal risks and uncertainties

The Board confirms that a robust assessment

of the principal risks facing the Group has been

carried out, including emerging risks and those

that would threaten its business model, future

performance, solvency, or liquidity. In

conducting such a review, we identified two

principal risks where the potential impact is

deemed to be increasing.

’Business change’ risk reflects our ongoing

investment in change programmes that are key

to our strategy and the delivery of further

growth and efficiencies. We consider this an

increasing risk in the short term as we continue

to take on larger and more complex projects.

However, it is anticipated that the risk will

stabilise as we continue to deliver.

‘Supply chain resilience’ risk is considered to be

increasing due to ongoing geopolitical pressure

and tensions around key trade routes. Whilst we

adopt a proactive approach to supply chain

management, the situation remains volatile and

events continue to be challenging to predict

and plan for.

The Board’s assessment of the principal risks

and uncertainties facing the Group as at the

date of this report and how we mitigate them is

set out on pages 41 to 45. The principal risks are

not set out in any order of priority and do not

represent all risks associated with the Group’s

activities. Additional risks that are not currently

deemed principal risks are nevertheless

monitored for their impact on the Group.

Emerging risks and opportunities

Risks continue to evolve and change, and an

awareness of emerging risks is important in

driving effective strategic planning.

Understanding the potential implications of

emerging risks and monitoring them enables

us to consider them appropriately within our

decision-making processes.

We identify emerging risks by reviewing

customer and market metrics and insights,

relevant publications and consultation papers,

with the assistance of both internal and external

subject matter experts.

While no significant emerging principal risks

were identified in the year, we recognise that

there continues to be a heightened level of

socio-economic risk and geopolitical uncertainty

beyond our control, in relation to which we

continue to closely monitor the potential impact

so far as it relates to Dunelm. We also continue

to consider the impact of technological change

and monitor the pace of regulatory change and

stakeholder sentiment in relation to environmental

and other sustainability-related matters.

Task Force on Climate-related Financial

Disclosures (‘TCFD’)

Climate change has been considered a principal

risk for the Group since FY19, and continues to

be so. The process of reviewing this risk and

how we mitigate, alongside preparation of this

year’s TCFD report, has enabled us to take stock

of our approach to data collection and reporting,

our achievements so far and where further work

is required.

We are proud of our progress during the year,

notably strengthening our governance

framework, improving the effectiveness of our

controls and the ongoing integration of climate

change considerations into day-to-day business

activities. However, in reflecting on what we

have achieved, we are also reminded of the

challenges in this area and the need to maintain

focus in order to achieve our sustainability goals.

For more information on how we manage our

climate-related risks see our TCFD report on

pages 46 to 54

Principal risks at a glance

Principal risks Risk trend

Customer offer

Product reputation and trust

Business change

People and culture

IT systems, data and cyber security

Regulatory and compliance

Supply chain resilience

Finance and treasury

Climate change and environment

Risk trend

Stable Increasing Decreasing

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Principal risks and uncertainties continued

Customer offer

Description of risk

Ongoing external uncertainty and inflationary

pressure on consumers has led to significant change

in consumer behaviour. Failure to respond to

changing consumer needs and to maintain a

competitive offer (value & choice, friendly & expert,

fast & convenient and good & circular) will undermine

our ambition to increase market share and drive

profitable and sustainable growth.

Stakeholder groups Risk trend

Link to strategy Risk owner

Customer Director

How we mitigate

• Increased utilisation of customer and market

insights enabling us to understand more about our

existing and potential new customers and adapt as

appropriate to their changing needs.

• Continued review and development of our strategy

to become a more trusted and valuable brand (see

pages 10 and 11 for business model).

• Continued investment in digitalising our business

to improve our customer offer.

• Focus on new product development, particularly

own brand, in both existing and new categories,

as well as continued product innovation in existing

categories with ‘sustainability’ being a key element

to strengthen our customer offer.

• Ongoing review of supply chain capacity and

capability, investing as needed.

• Continued expansion of our range of products to

appeal to every budget and style and regular

review of price points.

• Strong focus on engagement through social media

and community involvement.

Strategic pillars

Elevate

our product

offer

Connect

with more

customers

Harness our

operational

capabilities

Stakeholder groups

Customers Colleagues Communities

Suppliers Planet Shareholders

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Principal risks and uncertainties continued

Business change

Description of risk

Dunelm recognises that there is significant

opportunity in digitalising the business and has

invested and will continue to invest in system

improvements to drive growth and efficiency.

Failing to successfully introduce, deliver and leverage

new technology and systems, along with the

associated process and organisational changes

across the business to further improve our

proposition and operations could result in reduced

operational efficiency, competitiveness, relevance

and growth. Furthermore, failure to deliver the

expected objectives on time and on budget could

impact delivery of the planned business benefits.

Stakeholder groups Risk trend

Link to strategy Risk owner

Chief Technology and Information Officer

How we mitigate

• Continued investment in digitalisation aligned to

strategic priorities.

• Structured and disciplined delivery methodology

applied to business change programmes, led by

experienced project managers.

• Executive Team transformation forum to ensure that

we deliver on strategic business priorities (both

customer and efficiency driven) that will drive

longer-term growth.

• Refreshed ways of working and allocation of

resource to key change programmes (supported by

external expertise as needed) to ensure clear

ownership of projects and enable ongoing

knowledge-build, supporting rapid and agile

system development.

• Regular review of roadmaps and workstream

prioritisation by cross-functional leaders to ensure

ongoing alignment with delivery of strategy.

• Focus on building and developing strong

third-party relationships to enable effective

collaboration, communication and

ongoing delivery.

• Ongoing simplification and rationalisation of

processes and systems.

• Regular reviews of progress using appropriate KPIs

with all stakeholders, including identification and

management of risks to delivery.

Product reputation and trust

Description of risk

Our stakeholders expect us to deliver products

that are safe, compliant with legal and regulatory

requirements, and fit for purpose. Our customers are

increasingly aware of the environmental and social

impact of their purchases and want to know that our

products have been responsibly sourced and that

their environmental impact is minimised.

Failure by our suppliers to uphold our approach

to business ethics, regulatory compliance, human

rights (including safety and modern slavery) and the

environment may undermine or damage our reputation

as a responsible retailer, and result in a loss of

confidence in Dunelm.

Stakeholder groups Risk trend

Link to strategy Risk owner

Director of Commercial and Supply Chain

How we mitigate

• Mandatory training, a range of policies and our

Ethical Code of Conduct for Suppliers and Partners

govern, amongst other things, the quality of

products and production processes, and our

expectations in relation to responsible sourcing,

anti-corruption and anti-bribery and modern slavery.

• A dedicated and experienced team, supported by

third-party specialists, monitors compliance with

our policies, codes and applicable regulations.

• Ongoing expansion of our ethical audit

programme.

• Provision of enhanced training to commercial teams

and suppliers on identifying and utilising sustainable

materials in our products and packaging.

• Annual supplier webinar and awareness training at

which compliance with policies and the Ethical

Code of Conduct for Suppliers and Partners are

a key topic.

• Focus on collation of data from suppliers in

connection with sustainability targets for products

and packaging.

• Regular review by senior colleagues of product

recalls and product safety-related issues, with clear

procedures in place to enable swift action to be

taken as appropriate.

• Whistleblowing procedure and independently

administered hotline enables concerns to be raised

in confidence.

• Third-party mapping and risk assessment of our

cotton and timber supply chains.

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Principal risks and uncertainties continued

IT systems, data and cyber security

Description of risk

Our IT systems and infrastructure are critical to

managing our operations, interacting with customers,

and trading successfully. A key system being

unavailable or suffering a security breach could lead

to operational difficulties, loss of sales and

productivity, legal and regulatory penalties due to

loss of personal data, reputational damage, and loss

of stakeholder trust.

Stakeholder groups Risk trend

Link to strategy Risk owner

Chief Technology and Information Officer

How we mitigate

• Continued investment and roadmap for further

investment in systems development and security.

• Ongoing programme of works to decommission

outdated applications, platforms, and

infrastructure.

• Assessment of the robustness of security and data

protection controls required when onboarding new

suppliers or undertaking contract renewal.

• Data protection and information security policies

and procedures in place and governed by subject

matter experts, including a dedicated specialist

information security team, data protection officer

and head of data management.

• Mandatory training and ongoing awareness

programmes keep colleagues informed and aware

of data protection and information security risks.

• Restricted access to sensitive data.

• Security Operations Centre and vulnerability

management service tools provide increased

visibility of security events and enable

vulnerabilities to be monitored and quickly

addressed. In addition, periodic systems

vulnerability and penetration testing carried out

along with internal audit reviews of security related

policies and processes.

• Regular review and testing of incident and crisis

management plans, and business continuity plans,

which includes reviewing the resilience of and

disaster recovery for IT systems.

• Data and reporting used to track system

performance, utilisation, and vulnerability across

our IT estate, with regular reviews undertaken and

delivery of resulting actions monitored.

People and culture

Description of risk

Our business could be adversely impacted if we fail

to attract, retain, and develop colleagues with the

appropriate skills, capabilities, and diverse backgrounds.

Failing to embed and live our values could impact

business performance, the delivery of our purpose

and the long-term sustainability of our business.

Stakeholder groups Risk trend

Link to strategy Risk owner

Stores and People Director

How we mitigate

• Regular review by the Executive Team and the

Group Board of colleague ‘dashboard’ and KPIs,

including attrition and recruitment rates. Such

reviews also include an assessment of capabilities

to ensure that we continue to have the right skillsets

in the business to deliver our strategy.

• Continued focus on training, development

and mentoring opportunities, with emphasis

on ‘growing our own’ talent, driven by the

Talent Committee.

• Ongoing review of succession planning for

Executive Team and senior leadership roles.

• Ongoing review and development of our employee

value and reward proposition, assisted by

benchmarking exercises as appropriate.

• Commitment to increasing diversity across the

Group by way of focused initiatives and training.

• Enhanced mental and financial wellbeing

programmes and initiatives to support colleagues,

including targeted support relating to parenthood,

pregnancy loss, and menopause.

• Regular communication with colleagues through

engagement surveys, National, Regional and Local

Colleague Voice meetings, D&I networks and

huddles. Utilising feedback to understand

colleague perception of culture and implementing

actions based on the output.

• Continuing to ‘bring our shared values to life’ under

our behavioural framework project.

• Dedicated Group Board and Executive Team

discussions on culture and the vision for the

business in the short, medium and longer-term.

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Principal risks and uncertainties continued

Supply chain resilience

Description of risk

We are dependent on complex global supply chains

and fulfilment solutions to deliver products to our

customers. Instability in the global supply chain or failure

of a key supplier may impact our ability to effectively

manage stock and satisfy customer demand.

Stakeholder groups Risk trend

Link to strategy Risk owner

Director of Commercial and Supply Chain

How we mitigate

• Ongoing review of supply chain strategy to ensure

capacity is in line with longer-term financial plans.

• Continuous monitoring of the macroeconomic

environment for emerging risks that may lead to

disruption in our supply chain. Scenario planning

conducted, so as to enable a swift response and

adjustment to strategic and operational plans

as appropriate.

• Detailed budgeting and forecasting processes

match capacity to demand, and are reviewed

weekly by a cross-functional team.

• Continuous monitoring of demand and stock visibility.

• Active management and monitoring of key supplier

relationships to enable early warnings of disruption

and agree mitigating actions.

• Dedicated procurement team oversees process

for tendering and negotiating with supply chain

suppliers and ensures that appropriate due

diligence is carried out on existing and prospective

third-party partners.

• Active engagement with suppliers and partners on

the collation of data required to assess delivery

against carbon reduction targets.

• Active engagement with suppliers and partners on

our ethical and compliance requirements.

• Ongoing focus on initiatives to improve efficiencies

in our customer delivery processes.

• Regular review and testing of incident and crisis

management plans, and business continuity plans.

Regulatory and compliance

Description of risk

We operate in an increasingly regulated environment

and must comply with a wide range of laws,

regulations, and standards. Failure to comply with or

to take appropriate steps to prevent a breach of these

requirements could result in formal investigations,

legal and financial penalties, reputational damage

and loss of business.

Stakeholder groups Risk trend

Link to strategy Risk owner

Group General Counsel and Company Secretary

How we mitigate

• Suite of compliance policies in place which are

reviewed regularly and governed by subject

matter experts.

• Group-wide mandatory training provided for

high-risk compliance areas such as health and

safety, regulated credit, anti-corruption and

anti-bribery, data protection and cyber security,

with additional training undertaken as required or

as may be appropriate to a specific role.

• Data trends for high-risk compliance areas and KPIs

monitored and reviewed by the Risk and Resilience

Committee, as well as cross-functional steering

groups (such as Good and Circular).

• Dedicated teams for product quality and ethics,

sustainability and health and safety, supported by

in-house legal team.

• Whistleblowing procedure and independently

administered hotline enables concerns to be raised

in confidence.

• Compliance with policies and Ethical Code of

Conduct for Suppliers and Partners monitored via

our ethical audit programme.

• Regular health and safety meetings for each of the

retail and distribution centres. Health and safety

reports, including audit outcomes, reviewed by the

Risk and Resilience Committee and the Board on

a regular basis, with in-depth presentation made

by the Head of Health and Safety to the Board at

least annually.

• Continued focus on food hygiene and allergen

awareness in our Pausa cafes by way of regularly

reviewed operating guidelines, compulsory

colleague training and regular audits.

• Active monitoring of the financial reporting and

legislative landscape for new regulations and

reporting requirements. Appropriate plans and

roadmaps developed to ensure timely compliance.

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Annual Report and Accounts 2024

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Principal risks and uncertainties continued

Climate change and environment

Description of risk

Failure to positively change our impact on the

environment would fall short of the expectations of

our customers, colleagues, shareholders, and other

stakeholders which could lead to reputational

damage and financial loss.

In addition, an inability to anticipate and mitigate

climate change and other environmental risks could

cause disruption in the availability and quality of

raw materials such as cotton and timber, affecting

production capacity, product quality, and overall

supply chain resilience. This, and potential transition

risks related to environmental taxation, could result in

higher costs, delays, and potential loss of customers.

Stakeholder groups Risk trend

Link to strategy Risk owner

Chief Executive Officer

How we mitigate

• Annualised targets (for Scope 1 and 2) in place to

reduce emissions, energy usage and waste to

landfill, and increase recycling in our operations.

Longer-term targets in place for Scope 3 carbon

emissions.

• Good and Circular Steering Group oversees

progress against environmental targets and climate

change work.

• Updates on progress towards targets, including

emerging risks, challenges and opportunities

under our climate change roadmap, which is shared

with the Board for discussion and challenge.

• Active engagement with suppliers and partners to

support the reduction of their carbon emissions

through setting aligned carbon reduction targets

and sourcing better quality data.

• Regular review of standards and policies that

govern our approach to high-risk raw material types

and routes.

• Increased use of lower-impact raw materials in

products and ongoing work with our suppliers

to move towards a more circular design and

business model.

• Sustainability targets built into Executive Director

variable pay.

• Dedicated internal resource to support delivery

and measure progress against our targets.

• Regular horizon scanning conducted to keep

abreast of regulatory change and stakeholder

sentiment.

• Membership and involvement with industry

working groups.

The following pages 46 to 54 present the full TCFD report for FY24.

Finance and treasury

Description of risk

Progress against business objectives may be

constrained by a lack of short-term funding or access

to long-term capital.

Stakeholder groups Risk trend

Link to strategy Risk owner

Chief Financial Officer

How we mitigate

• Maintain relationships with a syndicate of

committed partner banks to ensure appropriate

funding is available.

• Revolving credit facility of £250m in place,

extended until September 2027.

• Group treasury policy governs levels of debt,

cash management strategies and foreign

exchange exposures.

• Hedging for foreign exchange and freight and

energy prices agreed in advance, to help mitigate

volatility and aid margin management.

• Continued focus on cost discipline through capital

investment approval process and ongoing scrutiny

of discretionary expenditure.

• Treasury and Capital Committee ensures

appropriate governance around matters such

as funding, dividends, foreign exchange, and

energy hedging.

• Ongoing focus on actions to improve controls

around stock and cash management, stock

purchasing and forecasting.

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Group Board

Audit and Risk Committee Nomination CommitteeRemuneration Committee

Good and Circular

Steering Group

Talent Committee

Risk and Resilience

Committee

Chief Executive Officer

Executive Team

Board Committees

Operational Committees

Introduction

Climate change has been managed as a

principal risk for the Group since FY19; the

current view of this risk is described in detail on

page 45. Following release of our first full TCFD

report in FY22 and progress made in FY23, we

have developed our approach to assessing risks

and opportunities and remain committed to

improving disclosures in line with evolving

requirements and practice. This year, we

brought in-house the assessment of financial

impact for climate related risks and opportunities

enabling more tailored data and assumptions to

be used. Additionally, new internal processes

have helped improve focus on potential impacts

across the business.

Our report continues to be compliant with

TCFD disclosures and UK Listing Rules. We

continue to consider the potential financial

impacts of climate change in the cash flow

scenario modelling within our viability statement

on page 55 and in our accounting policies note

on page 137 of the financial statements.

Governance

Governance a) Board’s oversight of climate-

related risks and opportunities

The Board takes overall responsibility for our

climate change roadmap. It considers our

approach, strategy, risk management and

performance, receiving regular updates on

progress against our climate-related KPIs, as well

as other related topics such as water reduction

and product circularity. It continues to listen and

learn about the implications of climate change

on the Group’s business model.

This year the Board received an update on our

emerging Scope 3 emissions reduction roadmap,

as well as our broader ‘Good & Circular’ strategy,

looking at circularity, carbon and responsible

sourcing, as well as our overall approach to

governance and reporting (which is explained

in more detail on the following page).

The Board is supported by the Audit and Risk

Committee, Remuneration Committee and

Nomination Committee.

Task Force on Climate-related

Financial Disclosures (‘TCFD’)

The Board recognises the risks and opportunities posed by

climate change to the Group’s business model and strategy.

TCFD report

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TCFD report continued

The Audit and Risk Committee formally reviews

principal risks twice a year, and ESG processes

and reporting (including TCFD), to verify

non-financial KPIs, annually. It receives updates

on upcoming sustainability reporting

requirements and Dunelm’s planned approach.

In FY24, it also received an internal audit report

on the assessment of Dunelm’s processes,

controls, and governance arrangements over

methodology, data collection, and reporting in

relation to Scope 3 emissions. The report did not

identify any significant gaps or high-risk findings;

it highlighted several areas of good practice and

confirmed the effective design and operation

of key controls. The Committee noted the need

to continue to focus on this area to remain

adequately equipped to operate controls over

Scope 3 emissions and reporting readiness.

The Remuneration Committee reviews and

approves Executive Director and Executive Team

remuneration, including climate-related targets

in performance-related pay.

The Nomination Committee sets specifications

for new Board roles and has oversight of the

Talent Committee to ensure necessary talent

and skills are available to deliver our

sustainability strategy.

Governance b) Management’s role in

assessing and managing climate related risks

and opportunities

Our CEO leads on the Group’s climate-related

activities and chairs the Good and Circular

Steering Group. This was re-named (from

Pathway to Zero Steering Group) and re-

constituted in FY24 following completion of our

FY23 materiality assessment, to reflect a wider

remit across sustainability, community and

customer initiatives. Meetings are held six times

a year and include the CFO, Commercial and

Supply Chain Director, Customer Director,

Group General Counsel and Company

Secretary and the Head of Sustainability and

Climate Change.

The Executive Team receives regular updates

on our climate-related KPIs and reviews the

principal risks prior to the Group Board review.

The Risk and Resilience Committee is chaired

by our CFO, Karen Witts. It is responsible for

reviewing our risk management framework and

processes and monitors existing and emerging

risks, including climate change and environment

risk. The Talent Committee is chaired by our

Stores and People Director and ensures that we

have the correct capability in place to meet our

ambitions in this area.

Climate change considerations are increasingly

integrated into day-to-day business activities:

an assessment of energy efficiency and carbon

impact is included in all new store and store

refit proposals; our product design team is

focused on increasing the use of less carbon

intensive materials such as recycled cotton

and polyester; and we continue to reduce

packaging or use more sustainable packaging.

In FY24, we increased our use of Better Cotton

and FSC timber.

We are proud of our continued progress this

year towards embedding our sustainability

strategy, including climate-related considerations,

within the business. Examples of how we have

done so include (i) ensuring that our Executive

Team business performance meetings regularly

discuss our sustainability KPIs, including climate

change, (ii) refreshing how we communicate our

strategy and initiatives to colleagues and

externally and (iii) continuing work with our

suppliers to ensure that everyone with whom we

partner is clear on the importance to Dunelm of

delivering on our sustainability goals.

Strategy

Strategy a) Climate-related risks and

opportunities identified over the short,

medium and long term

Our purpose — To help create the joy of truly

feeling at home, now and for generations to

come — is deliberately forward-looking, and

when combined with our business model (see

pages 10 and 11), is designed to encapsulate

our desire to have a positive impact on the

planet, now and in the future. It is underpinned

by our commitment to building sustainability

into all that we do. A key component of our

business model and customer proposition is

‘being good and circular’ which we describe

as being ‘positive choices for our planet,

communities and people’.

During FY24 we have reviewed our identified

climate-related risks and opportunities, and

considered any further risks and opportunities

presented in our risk registers or based on

systematic peer comparison and sector review.

Each risk and opportunity was assessed based

on potential impact, likelihood and velocity to

determine its relative materiality. The top-ranked

risks and opportunities were selected for

climate scenario analysis and financial impact

modelling. Climate-related risks and

opportunities were assessed using internal

and external data.

To further understand and explore how specific

climate-related risks and opportunities could

evolve and impact our business over the short,

medium and long term, we have carried out

climate scenario analysis and financial impact

modelling on six risks and opportunities.

We worked closely with internal stakeholders to

update baseline data, in addition to leveraging

external data sources, including the Network for

Greening the Financial System (NGFS) v3.2 and

the International Energy Agency (IEA) World

Economic Outlook 2023. By exploring the latest

developments and insights, several assumptions

were improved and applied, improving

specificity of predicted financial impact. For

example, we utilised the latest report from the

Waste and Resources Action Programme

(WRAP) to appropriately calculate the financial

impact of introducing packaging-style

Extended Producer Responsibility obligations to

textile products. This approach has ensured that

our assessments are based on the most current

and relevant data available. Although such

modelling still generates a high level of

uncertainty, improvements have and will

continue to be made. This modelling uses

medium and long-term internal forecasts, market

research and climate forecasts to explore the

potential impacts of climate change on the

Group’s financial position and performance.

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TCFD report continued

Financial impact ranges

We have used financial impact ranges, which are the same as we use for our corporate risk

management process.

Impact Financial range (Annual Profit before tax)

Low Less than £5m

Medium Between £5m and £50m

High Greater than £50m

Time horizons

We have used the three time horizons described below:

Time period Years Reason

Short 2024—2030 Aligned to our 50% carbon

reduction target and strategic plan

Medium 2030—2040 Aligned to our net zero target and to capture

transition risks and opportunities

Long 2040—2050 Longer term to capture physical risks

and opportunities

Climate Scenarios: We undertook climate risk and opportunity analysis under three climate

scenarios outlined below:

Global Net Zero 2050 Delayed Transition Business as usual (BAU)

Scenario

Limits global warming

to 1.5°C by 2100, with

stringent and immediately

introduced climate policies

and emissions reductions

to achieve net zero

emissions by 2050.

Scenario

Action taken to limit

emissions growth, but

2015 Paris Agreement

targets missed resulting in

greater than 2°C warming

by 2050.

Scenario

World takes no/limited action,

equivalent to a 3.5—4.5°C

warming.

Transition Risk

Transition risks are extreme

under this scenario in the

short to medium terms,

unless mitigated.

Transition Risk

This scenario presents a

significant transition risk in

the medium to long term,

given the speed and

severity of the response

required when

implemented.

Transition Risk

Limited transition risks

expected due to lack of policy

changes and regulation.

Physical Risk

Physical risks will be the

least extreme under this

scenario.

Physical Risk

Physical risks will be higher

than the Global Net Zero

2050 scenario due to

warming greater than 2°C

instead of well below.

Physical Risk

The most extreme physical

risk impacts in this scenario.

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Strategy b) Impact of climate-related risks and

opportunities on business, strategy and

financial planning

In preparing the financial statements, the

Directors have considered the cash flow

impacts of climate change. This includes:

• The impact of climate change on the going

concern basis of preparation and the viability

of the Group over the next three years.

• The impact on potential impairment triggers,

and where a trigger is identified, the impact

on the value-in-use of the related non-

current assets.

Given the majority of our long-term assets are

based in the UK, there is not likely to be any

material impact as a result of climate change on

financial reporting judgements or estimates

applied in the preparation of the FY24 financial

statements.

We are committed to transitioning to a net zero

future, and this is reflected within our strategic

pillars and planning both in our direct

operations and in our value chain, which

accounts for c.99% of our carbon emissions (see

the table on page 53 for the breakdown of our

emissions). Our product categories have plans

in place to reduce the impact and carbon

intensity of the products we sell, in support of

our carbon reduction goals. We work in

partnership with our suppliers to support them

in various ways to help reduce supply chain

emissions. We have developed and launched

our Better Manufacturing programme which

focuses on lowering carbon emissions during

the product manufacturing stage, and in FY23

we held our first ‘Introduction to Net Zero’

workshops which was attended by key suppliers.

In FY24 we invested in a supplier data capture

platform. Over 80% of our Tier 1 stock suppliers

have completed the environmental

questionnaire on the platform in FY24 and we

have started to analyse the data. These insights

will inform the type of support and work we do

with our suppliers to help them achieve the

carbon reduction required to hit our targets.

We have sustainability action plan meetings

with our key stock suppliers at least every six

months and we continue to advocate at an

industry level through organisations such as the

British Retail Consortium, Better Cotton and

WRAP Textiles 2030 and the Sustainable

Logistics Forum to accelerate the reduction

of carbon emissions in our supply chains.

Additionally, we have invested in a tool to assess

scalable options for product carbon footprinting

via product life-cycle assessments, which will

help focus our attention on reducing carbon

in the most impactful areas and improve the

robustness of data to enhance the accuracy of

our emissions reporting.

Strategy c) Resilience of strategy, taking into

consideration different climate-related

scenarios, including a 2°C or lower scenario

Our commitment to building sustainability into

all that we do ensures that climate change

considerations are integrated into our business

activities. As we better understand the impact

of climate change on the Group, we commit to

continuing to assess and prioritise material risks

and explore opportunities.

The analysis carried out has considered 3

climate scenarios, including a ‘2°C or lower

scenario’, aligned with the 2015 Paris

Agreement. This has been examined across

various timeframes, bringing confidence in the

long-term resilience of the business.

The table on the following page summarises the

material climate change risks and opportunities

that we have considered and the actions we are

taking to mitigate or manage risks and enhance

opportunities. It confirms that we should

continue to identify and explore mitigating

actions in alignment with each risk identified.

We will continue to work with relevant internal

and external stakeholders to address these risks,

and identify any new risks or opportunities upon

horizon scanning.

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Transition risks and opportunities — FY24

Risks and opportunities summary description Potential impact (pre-mitigation) Potential impact (post-mitigation) Specific mitigants in place Related metrics and targets

Policy & Legal

Global Net Zero scenario — most significant impact in long term

Impact of carbon taxes on Dunelm suppliers

Introduction of a carbon price could lead

to an increase in the cost of products with

high greenhouse gas emissions; this could

negatively impact profits due to taxation

on Dunelm or taxation on suppliers

passed on to Dunelm in product cost.

High in Global Net Zero scenario

across all timeframes, low in BAU

scenario across all timeframes.

Low in all timeframes. • Actively engaging with our suppliers to support the reduction of their

carbon emissions through setting aligned carbon reduction targets and

sourcing better quality data.

• Designing products to use lower carbon materials, such as recycled

polyester.

• In FY24 we launched the Higg Facility Environmental Module and started

collecting data from Tier 1 stock suppliers. We will use this to inform the

support we will give Tier 1 suppliers to move to lower carbon production.

• Actively monitoring the development of the UK Carbon Border Adjustment

Mechanism in preparation to assess and mitigate potential impact on both

direct and pass-through cost.

Carbon emissions metrics

and targets

Extension of producer responsibility: increased cost of existing packaging regime and extension to additional product categories such as textiles

Extended Producer Responsibility ‘EPR’

fees are being implemented in the UK

from October 2025. It is also predicted

that an EPR type scheme for textiles will be

introduced before 2030.

Medium across all timeframes. Not yet fully modelled for textiles

as scheme not currently proposed

(but no exemptions assumed).

• Engaging with industry groups and specialists and closely monitoring

development of the Packaging EPR charging mechanism and rates.

Well-informed estimated costs are included in our financial plans.

• Increasing recycled content in packaging (both plastic and cardboard).

• Working collaboratively with BRC and WRAP Textiles 2030 to be prepared

for EPR extension to textiles.

• Through designing our textile products to become more circular we are

aiming to reduce the impact that an EPR extension would have.

• Monitoring extension to other categories beyond textiles.

Nature and packaging

metrics and targets

Market

BAU scenario is most impactful for this risk as fuel prices increase the most in the outer year

Changes to fuel prices caused by climate-related market disruption or increased taxation

Changing market dynamics and

decarbonisation trends impact both fuel

prices and the transition to non-fossil fuel

alternatives, leading to increased fuel

costs across the delivery network.

Medium or low across all

timeframes.

Low across all timeframes as we

assume a degree of offset through

a range of operational actions.

• Movement of trunking vehicles from diesel to CNG, which produce

significantly fewer emissions than the diesel equivalent

• Further assess the viability of electric vehicles in our fitter van fleet and

implementing a low-carbon transition strategy in our stores and Home

Delivery Network ‘HDN’ fleet for 2030.

• Increasing the share of electric and hybrid vehicles within our company car

fleet. Currently 40% of the cars in-use are electric within our car fleet.

• Working with our key logistics suppliers to support their transition from

diesel to non-fossil fuel alternatives.

Carbon emissions metrics

and targets

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Transition risks and opportunities — FY24 continued

Risk and opportunities summary description Potential impact (pre-mitigation) Potential impact (post-mitigation) Specific mitigants in place Related metrics and targets

Reputation

Global Net Zero scenario most significant impact in medium to long term

Reputational damage due to failure to act on sustainability trends

If Dunelm fails to continue to move

towards using more sustainable raw

materials and reduce carbon emissions

then we might lose customers who switch

to retailers who they consider to be more

sustainable; we could also struggle to

retain and attract colleagues and to

secure funding.

No impact in the short term in all

scenarios, reflecting Dunelm’s

current position versus the market.

High in the medium to long term

in both the Global Net Zero and

Delayed Transition scenarios if

other retailers outpace Dunelm in

sustainability.

See opportunity below in relation

to increasing market share by

demonstrating leadership in

addressing climate change and

sustainability.

• We have set ambitious climate change reduction targets.

• Our ‘Conscious Choice’ product label helps customers to identify products

made from more sustainable materials.

• We follow the CMA’s Green Claims Code, seeking to ensure that our green

claims are genuine and not misleading.

Carbon, nature, water

stress, packaging and

circular metrics and targets

Increased market share by demonstrating leadership in addressing climate change and sustainability

If Dunelm demonstrates leadership in

addressing climate change and delivering

its climate change reduction targets,

whilst other retailers do not, we might gain

market share from customers actively

moving towards shopping at Dunelm.

Medium in the short term in all

scenarios. Medium in the medium

and long term in the BAU

scenario, but not a differentiator

in the medium or long term in

the Global Net Zero or Delayed

Transition scenarios as it is

assumed that other retailers also

take similar action.

n/a • Working in collaboration with our suppliers to reduce their carbon emissions

and create a more circular sourcing model.

• Followed the LEAP process to review and set internal nature-based targets

related to our cotton and timber sourcing. These targets are aligned to our

internal net zero roadmap actions.

• Starting to use lower-impact materials in our products and moving towards

a more circular sourcing model to enhance our competitive advantage.

Carbon, nature, water

stress, packaging and

circular metrics and targets

Physical risk — FY24

Risk and opportunities summary description Potential impact (pre-mitigation) Potential impact (post-mitigation) Specific mitigants in place Related metrics and targets

Physical Risks

BAU scenario most impactful

Physical risks (drought, flooding, wildfires, etc.) impact the availability of raw materials such as cotton or timber, or impact manufacturing sites and logistics in countries from which we source our products

Physical risks mainly manifest themselves

in our supply chain as none of our UK

store or depot footprints are in areas at

high risk of flooding.

Medium across all timeframes

(dependent on extreme weather).

Not modelled as changes in

sourcing strategy are not currently

defined.

• We have followed the LEAP process to review and set internal nature-based

targets related to our cotton and timber sourcing. These targets are aligned

to our internal net zero roadmap actions.

• Working with the Textiles 2030 group of retailers to support actions to

mitigate these risks and to move towards a more circular sourcing model,

which is being built into our product design process.

• Overall our sourcing strategy is across multiple locations, to reduce the risk

any in-country disruption may cause.

Nature and water stress

metrics and targets

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Risk management

Risk management a) Processes for identifying

and assessing climate-related risks

Climate-change and environment is considered

a principal risk within our risk register. In FY21,

we implemented a comprehensive climate

change risk register with the support of the

Carbon Trust. During FY22 and FY23, we

refined this risk register with external TCFD

consultants, and quantified the most significant

risks by likelihood and potential impact on our

business. We also conducted an external

materiality assessment in FY23 using both

quantitative and qualitative information via

surveys and interviews. It was concluded that

there were no material risks or opportunities

omitted. Throughout FY24, we reviewed and

updated these previously identified risks to

ensure that we continue to understand the

potential financial impacts and have effective

mitigations in place now and for the future.

Risk management b) Processes for managing

climate-related risks

Climate-change and environmental risk is a

principal risk owned by our CEO. The detailed

climate-related risks identified fall under this

principal risk. Senior leadership within our Good

and Circular Steering Group assess and

recognise these risks, enabling performance

management and planning of mitigating

actions. Our CEO, Head of Sustainability and

Climate Change and other senior colleagues

within the Group continue to engage with

external advisors such as British Retail

Consortium (BRC), WRAP, Textiles 2030, the

Aldersgate Group and others, improving

business resilience through best practice.

Risk management c) Processes for identifying,

assessing and managing climate-related risks

are integrated into the organisation’s overall

risk management

As an identified principal risk, climate change

and the environment is formally assessed twice

a year with the Risk and Resilience Committee.

This approach supports both the Audit and Risk

Committee and Group Board in assessing and

reviewing climate change and environmental

risk bi-annually. Our overall risk management

framework and supporting processes can be

found on pages 38 and 39.

The principal risks are considered by

management in connection with the assessment

of the viability of the business over the longer

term, with these considerations informing the

viability statement on page 55 of this Annual

Report. Further details on the assessment of our

climate change and environment risk can be

found on page 45.

Metrics and targets

Metrics and targets a) Metrics used to assess

climate-related risks and opportunities in line

with strategy and risk management process

The metrics we use as part of managing

climate-related risks and opportunities are set

out in the table on page 54. We have chosen

these metrics because they relate directly to our

material climate risks and opportunities, and

because they are where we can make the biggest

potential impact. In setting our GHG metrics and

targets, we have ensured that they are in line

with the 2015 Paris Agreement and aligned to

a 1.5°C pathway, the UK’s commitment in the

Climate Change Act 2008 (2050 Target

Amendment) Order 2019 and other relevant

legislation, as well as the British Retail Consortium’s

Climate Action Roadmap, which we support.

The carbon, cotton and water metrics are

aligned to the Textiles 2030 voluntary agreement,

which we have signed up to as a partner. These

topics are also important to our colleagues,

customers and society more broadly.

Metrics and targets b) Scope 1, Scope 2 and

Scope 3 greenhouse gas ‘GHG’ emissions and

the related risks

In FY24, we reduced our overall Scope 1 carbon

emissions by 27% from our FY19 baseline

despite strong sales growth of 53% over the

same period. We achieved this through our gas

boiler replacement programme in stores (which

is on track to be completed by FY30), the

ongoing transition of our company car fleet to

lower carbon, and moving our trunking vehicles

from diesel to compressed natural gas. We

actively look for more opportunities to reduce

emissions within our vehicle fleet in line with the

innovation of the fleet industry.

We continue to purchase 100% renewable

electricity and to install solar PVs across our sites

where viable. This means that we report zero

Scope 2 emissions using the market-based

approach, and that on a location-based basis,

our FY24 Scope 2 emissions were 21% lower

than in FY19.

We report the majority of our Scope 3 emissions

using a spend-based methodology as set out in

the GHG Protocol Scope 3 Standard. Consistent

with this approach, the Scope 3 emissions within

our target boundary have increased by 59%

since FY19, driven mostly by the 53% increase

in sales over the same period.

In FY24, as part of our ongoing data

management plans for Scope 3, we again

reviewed and improved our data and methods

for reporting. This will continue in FY25 as

explained below.

In line with our Base Year Emissions

Recalculation and Prior Year Restatement Policy

we are now reporting updated emissions for

both FY19 and FY23. The changes to emissions

are most materially affected by improvements in

our approaches to measurement for Purchased

Goods & Services, and Use of Sold Products.

In FY24 we used a hybrid of activity and

spend-based calculation methodologies and

applying a continuous improvement approach

to develop the accuracy and specificity of

reporting methodologies. For example, for our

most material category of purchased goods

and services, we have improved the granularity

of our spend-based methodology to a product-

level, enabling more accurate emissions

calculations through better country of origin

and emissions factor matching.

We will continue to transition away from

a spend-based approach in FY25. This will

include increasing the amount of supplier-

specific data that we are gathering and

completing life-cycle assessments across a

broad range of our products. We intend to

incorporate this more accurate data into our

reporting from FY25 onwards.

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Greenhouse Gas Emissions and energy use data for Streamlined Energy and Carbon Reporting

Greenhouse Gas Emissions (tCO

e) FY19 FY20 FY21 FY22 FY23 FY24

Scope 1 7,059 7,108 8,633 7,902 7,044 5,139

Scope 2 (location-based) 10,861 8,757 7,854 8,015 8,782 8,568

Scope 2 (market-based) 10,861 8,757 268 21 27 —

Scope 3

Purchased goods and services 536,177 n/a n/a n/a 776,292 850,919

Use of sold products (direct use phase only) 236,920 n/a n/a n/a 366,195 408,681

Upstream transportation and distribution 29,439 n/a n/a n/a 47,255 32,019

End-of-life treatment of sold products 26,873 n/a n/a n/a 33,986 32,016

All other categories combined

14,339 n/a n/a n/a 18,836 20,998

Total Scope 3 within target boundary

843,748 n/a n/a n/a 1,242,564 1,344,633

Streamlined Energy and Carbon Reporting (energy by source) FY19 MWh FY20 MWh FY21 MWh FY22 MWh FY23 MWh FY24 MWh

Purchase of energy (electricity) 42,491 37,560 36,988 41,446 42,410 41,383

Purchase of energy (stationary combustion) 14,676 12,987 16,170 10,534 9,004 6,018

Use of fuel for vehicles (mobile combustion) 13,528 15,918 20,341 19,752 19,123 19,325

1. Includes updated numbers due to continuous improvements made throughout FY24 in line with our Base Year Emissions Recalculation & Prior Year Restatement Policy.

2. All other categories includes capital goods, fuel and energy-related activities, employee commuting, and downstream transportation & distribution.

3. Target boundary for Scope 3 excludes indirect use of sold products, waste generated in operations and business travel (both previously measured but removed based on de minimis materiality), upstream leased assets, processing of sold products, downstream leased assets,

franchises and investments (assessed and deemed as not relevant).

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Metrics and Targets c) Targets used to manage

climate-related risks and opportunities and

performance against targets

In response to the Net-Zero Standard set by

SBTi, we submitted our net zero 1.5°C aligned

targets across all Scopes to be validated by

SBTi, and received confirmation of approval in

October 2023. As members of the BRC and

Textiles 2030, our Net Zero carbon target is

aligned to the BRC’s Climate Action Roadmap

and our cotton and water usage targets are

aligned to the Textiles 2030 voluntary

agreement. Executive Director variable pay

includes sustainability metrics which vary from

year to year. Further information can be found

in this year’s Remuneration Committee report

found on page 89.

UK Listing Rule 6.6.6R(8) Compliance

Statement

Dunelm Group plc has complied with all

of the requirements of UK LR 6.6.6R(8) by

including climate-related financial disclosures

in this section (and in the information

available at the locations referenced in it)

consistent with the TCFD Recommendations

and Recommended Disclosures.

Climate-related risk Metric and target Baseline Progress

Carbon

emissions

Reduce absolute Scope 1 carbon

emissions by 50% against an FY19

baseline by FY30

7,059 tCO

e in FY19 5,139 tCO

e in FY24, which is a 27% reduction on the FY19

baseline reflecting the progress made (see Scope 1 commentary

on page 52).

Reduce Scope 1 carbon emission

intensity against FY19 baseline

6.4 tCO

e/£1m Group

revenue in FY19

53% reduction in FY24 to 3 tCO

e/£1m Group revenue

(32% reduction on the FY19 baseline in FY23).

Purchase 100% renewable electricity

every year

n/a We continue to purchase 100% renewable electricity.

Reduce absolute Scope 3 carbon

emissions in our target boundary

by 50% against an FY19 baseline

by FY30

843,748 tCO

in FY19

1,344,633 tCO

e in FY24. Increased by 59% due to increased

sales and spend. We continue to invest in data, measurement

and reporting capabilities and have re-baselined and restated

emissions in line with our base-year restatement policy.

Water stress Reduce aggregate water footprint

in own brand textile products by

30% by 2030

116.5m M³ in calendar

year (CY)19

195.0m M

in CY23. Increased by 67% compared to base year.

This is due to selling more products containing cotton. The

majority of cotton sourced is Better Cotton and we continue

to work with industry via WRAP’s Textiles 2030 collaboration

towards the collective 30% reduction target.

Nature 100% of own-brand cotton more

responsibly sourced by 2025

n/a 71% in FY24 (FY23: 26%). Increase due to improved process of

mapping cotton supply chain and suppliers transitioning more

cotton to Better Cotton. We intend to continue this trajectory

into FY25.

50% more responsibly sourced

timber by FY25

n/a 37% in FY24. Good progress made toward sourcing more FSC

timber in products. We intend to continue this trajectory into FY25.

Packaging 30% less virgin packaging in

own-brand range by 2025

measured by weight per £1 sales

packaging

2.2g per £1 sales

in FY20

42% reduction in FY24 to 1.3g per £1 of sales (FY23: 36%

reduction). Reduction due to improvements such as reducing the

thickness of our curtain bags, and compliance checks resulting in

more accurate data.

Circular

economy

Easy to use take-back service in

place for 50% of our own-brand

products

n/a 62% in FY24 (FY23: 61%). Our take-back service has continued to

prove popular with customers in stores and the volume of textile

take-back has increased. We have focused on testing and trialing

new circular business models and scaling up the ‘Home to Home’

offering across our estate.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

At the time of approving the financial

statements, the Board of Directors is required to

formally assess that the business has adequate

resources to continue in operational existence

and can therefore continue to adopt the ‘going

concern’ basis of accounting. The Board is also

required to state that it ‘has a reasonable

expectation that the Group will continue in

operation and meet its longer-term liabilities

as they fall due’ (the ‘viability statement’).

To support this statement, the Board has

considered the Group’s current financial

position, its strategy, the market outlook and

its principal risks. Note that the Board reviews

viability over a three-year period. Historically,

this has been a five-year period, however a

three-year horizon aligns with the wider

business strategic plans, as well as the

timeframe for performance targets. The base

case for this review is the three-year plan that

was presented to and approved by the

Directors in May 2024.

The Group is operationally and financially strong

and has a long track record of consistently

generating profits and cash, which is expected

to continue throughout the plan period.

Modelling potential downside scenarios

In their consideration of going concern and the

future viability of the Group, the Directors have

reviewed future profit forecasts and cash

projections, reflecting their experience in

managing the business. Both scenarios

modelled assume that variable costs would

reduce as sales reduce.

The ‘market downturn’ scenario assumes

consumer spending moves away from

homewares due to the impact of ongoing

economic uncertainty and geopolitical

instability. In this scenario, FY25 shows no sales

growth on FY24 and a 4% lower growth rate in

Reverse stress testing

To provide additional assurance around the

Group’s viability, two reverse stress tests have

been modelled. In both of these reverse stress

tests we have assumed that variable costs would

reduce in line with sales, that we would be able

to save £20m per annum of fixed costs, that we

would reduce the level of capital investment to

reduce uncommitted spend in FY25 to £5m and

to £10m in FY26 and suspend the payment of

dividends. In the first reverse stress test, we have

modelled the sales decline required to breach

either of the current covenants in the Revolving

Credit Facility (‘RCF’). A sales reduction of 26%

in both FY25 and FY26 from the base case would

be required for covenants to be breached by

the end of FY26. In the second reverse stress

test scenario, we have modelled the level of

sales reduction required to breach the RCF limit

of £250m. This would require a reduction in

sales of 42% in both FY25 and FY26 from the

base case to effectively run out of funding by

the end of FY26, assuming reasonable

mitigating actions have been implemented.

Financing

The Group’s banking agreements and

associated covenants are set out in the CFO’s

Review and include a £250m RCF (maturing in

September 2028, having exercised a one-year

extension, with a further one-year extension

option available subject to lender consent), an

accordion option with a maximum facility of

£100m and a £10m uncommitted overdraft.

The Group ended the financial year with net debt

of £56m. The financial covenants are tested in line

with our December interim reporting and June

year-end reporting. These covenants are met with

significant headroom. In both downside scenarios,

the Group continues to forecast compliance

with all financial covenants throughout the

going concern and viability period.

FY26 than in the base case scenario. In addition,

higher costs than base case are assumed

throughout the three-year period. This ‘market

downturn’ scenario does not include any

mitigating cost reduction actions, which would

be taken if such a downturn occurred, and

assumes the continuation of dividend payments

in line with our current dividend policy. In this

‘market downturn’ scenario, the Group would

not breach any of its financial covenants and

would have sufficient funds to meet obligations

as they fall due.

The ‘deeper market downturn’ scenario

assumes a 5% sales decline in FY25 compared

to FY24 and 4% lower growth in FY26 than in

the base case. More severe cost increases are

assumed in this scenario compared to the

‘market downturn’ scenario, and costs are not

assumed to revert or recover to the levels

assumed in the base plan throughout the

three-year period. Similar to the ‘market

downturn’ scenario, we have assumed no cost

mitigation and the continuation of dividend

payments in line with our current dividend

policy. As with the ‘market downturn’ scenario,

the Group would not breach any of its financial

covenants and would have sufficient funds to

meet obligations as they fall due.

The Directors continue to assess the risks that

climate change poses to the business via

modelling and disclosures in line with the Task

Force on Climate-related Financial Disclosures.

The Group will actively manage and mitigate

these risks as required within the existing

enterprise risk management processes (as

outlined on page 52). Currently, climate change

is not expected to have a significant impact

on the Group’s going concern assessment or

on the viability of the Group over the next

three years.

Going concern and viability conclusion

In both downside scenarios Dunelm has

sufficient liquidity to continue trading, including

maintaining the payment of dividends in line

with its dividend policy and comfortably

meeting its financial covenants. The reverse

stress modelling has demonstrated that a

significant, prolonged sales reduction of 26% in

each year is required to breach covenants by the

end of FY26 and a 42% sales reduction in each

year is required to breach the RCF limit by the

end of FY26, assuming reasonable mitigating

actions have been implemented. Even in such

an event, management would follow a similar

course of action to that initially undertaken

during the COVID-19 pandemic. Such actions

could include reductions in discretionary spend

(e.g. marketing and travel), headcount and

capital investment in new stores and refits.

The Board believes that the Group is well placed

to manage its financing and other significant

risks satisfactorily and that the Group will be

able to operate within the level of its facilities

and meet its liabilities as they fall due, for at least

the next three years. For this reason, the Board

also considers it appropriate for the Group to

adopt the going concern basis in preparing its

financial statements.

Strategic report

This report was reviewed and signed by order of

the Board on 11 September 2024.

Nick Wilkinson

Chief Executive Officer

11 September 2024

Going concern and viability statement

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Governance

report

57 Chair’s introduction

59 Compliance with the Code

60 Directors and officers

63 Governance dashboard

64 Governance framework

68 Culture and values

71 Board activities

74 Nomination Committee report

81 Audit and Risk Committee report

88 Remuneration at a glance

89 Remuneration Committee report

116 Directors’ report

120 Statement of Directors’ responsibilities

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Chair’s introduction to corporate governance

How our governance helps

to unlock our full potential

On behalf of the Board, I am pleased to present our

Governance report for the year ended 29 June 2024.

Our FY24 performance has been strong amidst

a challenging market, in which the Group has

demonstrated its resilience by means of its

continued focus on growth and operational

grip. These remain important attributes as we

continue to unlock our full potential and work

towards achieving our ambitions. As the

business continues to evolve, innovate and grow,

we are mindful that our approach to governance

will need to mature with it and we are

committed to ensuring that we maintain a clear

and robust framework within which decisions

are made for the benefit of all our stakeholders.

Culture and values

Our strong culture and shared values remain

fundamental to the continued success of the

business, and it is important to the Board that

our purpose, values and strategy are aligned.

We recognise our role in monitoring, assessing

and promoting a healthy culture throughout

Dunelm and fulfil this by means of regular

reports from the Stores & People Director, site

visits, attending National Colleague Voice

meetings, reviewing the outputs and progress

against actions arising from colleague surveys

and Good & Circular Steering Group updates.

The Board also regularly considers a variety of

metrics in relation to colleagues, customers,

sustainability and risk allowing it to assess

culture within the Group, and ensure that it is

aligned with our purpose and strategy.

See page 68 for more information on culture

and values

Stakeholder engagement

We recognise the ongoing focus given to all

aspects of governance by our stakeholders,

including audit and risk, regulatory compliance

and sustainability, and the need to ensure that

our approach remains appropriate for Dunelm.

I am confident in our ability to effectively

engage with our key stakeholders, utilise the

insights gained, incorporate their views in our

decision-making and meet their expectations.

A good example of this was our Board away day

in November 2023, which included a deepdive

into our supply chain. The agenda included a

focus on responsible and ethical sourcing and

an in-person Q&A session with some of our key

suppliers, which provided increased insight and

understanding for all.

Alison Brittain

Chair

Strong and engaged leadership that supports long-term performance

A robust review of strategy

The Board met in May 2024 for its annual

strategy review. The structure of the day

enabled detailed understanding and debate

of our strategy and growth plans, with

challenge to management on the potential

for further acceleration and efficiencies.

Read more on page 73

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Chair’s introduction to corporate governance continued

Our Non-Executive Directors also enjoyed

a number of site visits during the year, some

undertaken independently and others planned

around Board meetings. These visits enabled

engagement with colleagues, in addition to

Non-Executive Director attendance at National

Colleague Voice meetings and our review of the

outputs from colleague surveys.

We also appreciated conversations during

the year with investors on remuneration and

sustainability, and I enjoyed meeting with a

number of our larger institutional shareholders

at the beginning of the year to better

understand their latest views on strategy

and governance.

See pages 20 to 25 and 72 to 73 for more

information on stakeholder engagement

Board changes and succession planning

An important priority for the Board in relation

to governance in the past year has been

establishing and implementing effective

succession planning. We have already made

changes to the Board, with further to come later

this year. Peter Ruis stepped down in January

2024 and Arja Taaveniku will be stepping down

at the end of the calendar year, in both cases

having accepted roles with other retailers.

In July, we announced that William Reeve will

not be standing for re-election at the AGM in

November 2024, having completed his

nine-year term as a Board Director. I thank each

of William, Peter and Arja for their significant

contributions to Dunelm.

After the FY24 year end Kelly Devine also

stepped down, having agreed to join Dunelm’s

Executive Team as Customer Director. Whilst

she will be missed around the Board table, we

are delighted to welcome her into her new role

where she will focus on pushing forward our

customer proposition and working with the rest

of our Executive Team to pursue the multiple

opportunities we have to grow the business and

develop our brand.

In March we welcomed Ajay Kavan and Dan

Taylor as independent Non-Executive Directors.

Ajay’s experience across a range of well-known

retailers strengthens our Board as we continue

to drive multi-channel growth across our total

retail system. Dan’s experience, particularly in

the delivery of digital growth strategies in

consumer-facing businesses, will add further

expertise and value as we continue to evolve

and improve our customer offer. We also

announced in July that Ian Bull will be appointed

Senior Independent Director and Ajay Kavan

our Remuneration Committee Chair when

William Reeve departs in November 2024.

See page 76 for more information on our

process for appointing new Directors

The Board has also continued to prioritise

senior leadership succession planning and the

development of internal talent to support our

growth ambitions. We continue to promote

diversity and inclusion on the Board and across

the colleague population.

See pages 79 to 80 for more information on

our approach to diversity and inclusion

AGM

Our AGM this year takes place on 21 November

2024. In line with the UK Corporate Governance

Code, all Directors will be seeking re-election

(other than William Reeve). In addition, in

accordance with the UK Listing Rules, each of

the Non-Executive Directors will be subject to

a vote of shareholders independent of the

Adderley family. In light of the Adderley family

holding, we are also required to seek a Rule 9

waiver to allow us to buy back shares to fulfil

colleague share option entitlements. We hope

that shareholders will support this resolution,

which is limited to this purpose.

The year ahead

As we go into FY25, we remain focused on

growth and unlocking the business’ full potential

to deliver long-term sustainable success.

Alongside this, the Board is conscious of the

ongoing need for good governance and

I remain confident that our framework is strong

and effective.

I would like to take this opportunity to say thank

you, on behalf of the Board, to all our colleagues

in the business for their continued hard work,

dedication and focus on ensuring we are ‘doing

the right thing’ for Dunelm and its stakeholders,

and to my fellow Directors for their valuable

contribution.

Alison Brittain

Chair

11 September 2024

Our Non-Executive

Directors also enjoyed

a number of site visits

during the year, some

undertaken independently

and others planned

around Board meetings.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Compliance with the UK Corporate Governance Code

How we comply with the UK

Corporate Governance Code 2018

The Board is responsible for demonstrating how the governance of the Company

contributes to its long-term sustainable success.

This Governance report explains how we have

applied the Principles of the UK Corporate

Governance Code 2018 (the ‘Code’) issued by

the Financial Reporting Council and available at

www.frc.org.uk. These Principles are applied to

the Company’s sole trading subsidiary through

the Group’s governance, risk management and

internal control structure.

The Board is pleased to confirm that during the

year ended 29 June 2024, the Company applied

the principles and complied fully with all the

provisions of the Code throughout the year.

Further information on compliance with the

Code can be found throughout this Governance

report, the Strategic report and Committee

reports signposted as follows:

Board leadership and

company purpose

An effective and entrepreneurial Board

which promotes the long-term

sustainable success of the Company.

Directors and officers — page 60

s.172 statement — page 25

Board evaluation — page 78

Alignment of our purpose, values,

culture and strategic objectives.

Our strategy — page 13

CEO’s review — page 14

Board activities — page 71

Culture and values — page 68

Our governance and risk management

framework.

Governance framework — page 64

Approach to risk management —

page 38

Effective engagement by the Board

with stakeholders.

Stakeholder engagement — page 20

s.172 statement — page 25

Our colleagues and alignment of our

policies to support long-term

sustainable success.

National Colleague Voice — page 22

NFSIS — page 34

Codes of conduct, anti-bribery and

other policies — page 68

Division of

responsibilities

The role of the Chair.

Chair’s statement — page 4

Directors and officers — page 60

Roles and responsibilities — page 65

Board evaluation — page 78

Composition of the Board and division

of responsibilities.

Directors and officers — page 60

Roles and responsibilities — page 65

Director independence — page 66

Non-Executive Directors’ external

commitments and role.

Directors and officers — page 60

Roles and responsibilities — page 65

Board activities — page 71

Effective and efficient functioning

of the Board.

Time commitment — page 66

Board evaluation — page 78

Composition, succession

and evaluation

Formal, rigorous and transparent

appointment procedure and effective

succession plans.

NED succession — page 76

Diversity and inclusion — page 79

A combination of skills, experience

and knowledge on the Board and

Committees.

Directors and officers — page 60

NED succession — page 76

Annual evaluation.

Board evaluation — page 78

Remuneration

Policies and practices designed to

support strategy, long-term success

and aligned to culture and values.

Remuneration Committee report

— page 89

Formal and transparent procedure for

developing policy.

Remuneration policy — page 91

Exercise of independent judgement

in respect of 2024 outcomes.

Annual Statement — page 89

Annual report on remuneration

— page 101

Audit, risk and internal

controls

Transparent policies and procedures to

ensure independence and effectiveness

of auditors and integrity of the Annual

Report and Accounts.

External auditor — page 85

Internal audits — page 87

Year end review process — page 84

Fair, balanced and understandable

assessment of position and prospects.

Fair, balanced and understandable

— page 83

Internal controls and management

of risk.

Approach to risk management

— page 38

Principal risks and uncertainties

— page 41

Risk management and internal

controls — page 86

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Directors and officers

Key

Audit and Risk Committee member

Nomination Committee member

Remuneration Committee member

Committee Chair

Independent Director

Designated NED for colleague matters

Alison Brittain

Chair

Independent on appointment

Appointed: September 2022 and as Chair in

January 2023

Skills and contribution: Alison is an experienced

business leader who brings considerable expertise

to the Board as NED and former Chief Executive of

a range of consumer-facing companies. Her skillset

enables her to provide valuable insight on strategic

matters and a strong focus on execution, which are

key to our continued growth. In addition, she has

successfully scaled businesses in the UK and

internationally, has long-standing plc experience and

a deep understanding of stakeholder perspectives.

This positions her perfectly to facilitate constructive

challenge and debate as our Chair.

Previous roles: Alison was CEO of Whitbread PLC from

2015 to 2023. Prior to that, she held several senior roles

in the UK banking industry, serving as Group Director

in the Retail Division of Lloyds Banking Group PLC

(2011—2015), Board Director at Santander UK PLC

(2007—2011) and Barclays PLC (1987—2007). Alison was a

Non-Executive Director of Marks & Spencer Group PLC

from 2014 to 2020.

Other commitments: Chair of English football’s Premier

League. Senior Independent Director at Experian plc.

Non-executive Director at British Airways plc. Chair of

the King’s Trust Group of Charities (formerly The

Prince’s Trust).

Nick Wilkinson

Chief Executive Officer

Non-independent

Appointed: February 2018

Skills and contribution: Nick is an experienced Chief

Executive, with a proven track record in multichannel

retail businesses operating across a number of

consumer brands and geographies. His leadership is

pivotal in developing and overseeing delivery of our

strategy, driving growth and ongoing transformation,

increasing market share, and continuing to strengthen

our customer offer and experience. Nick chairs our

Good and Circular Steering Group, steering our plans

to build sustainability into all that we do.

Previous roles: Nick was Chief Executive of Evans

Cycles from 2011 to 2016 and the Chief Executive of

Maxeda DIY from 2007 to 2010. Prior to that, he was

Group Buying Director and MD of Currys at Dixons

Retail Group (1999 to 2006). Nick spent his early career

at Unilever and McKinsey & Co.

Other commitments: Trustee of Rewilding Britain.

Karen Witts

Chief Financial Officer

Non-independent

Appointed: June 2022

Skills and contribution: Karen is a highly experienced

Chief Financial Officer with a strong background in

finance and management across global retail and

consumer-facing businesses. She plays an important

role in developing and overseeing delivery of our

strategic initiatives, driving innovation, and ensuring

that we maintain strong operational grip. In addition

to leading on financial management, Karen regularly

engages with our investors and corporate advisors.

Karen chairs the Risk and Resilience Committee,

providing oversight of risk management and ensuring

that the business is operating within our risk appetite.

Past experience: Karen was Chief Financial Officer of

Compass Group plc from 2019 to 2021 and CFO of

Kingfisher Group plc from 2012 to 2019. Before that,

she held various senior finance, strategic and operational

roles with Vodafone Group plc (2010 to 2012), and at BT

Group plc (1999 to 2010). Karen qualified as

a Chartered Accountant with Ernst & Whinney.

Other commitments: Non-Executive Director of

Ipsen Pharma, SA.

Sir Will Adderley

Deputy Chair

Non-independent

Appointed: April 2003

Skills and contribution: Will brings a unique

perspective to the Board as a result of his broad and

deep understanding of the business and in-depth

knowledge of its corporate history. This adds significant

value to Board debate and informed decision-making.

Will also plays a key role in contributing to the ongoing

development of our purpose and culture, which has

been built from the shared values instilled by the

Adderley family when the business was founded. Will

retains an executive role to support the business in

matters agreed with the Chief Executive, as required.

Previous roles: Will has worked for Dunelm his

whole career since joining in 1992. He took over the

day-to-day running of the Group from his father in 1996

and remained as Chief Executive through the Group’s

IPO in 2006. Will became Deputy Chair in February

2011 and was reappointed Chief Executive in

September 2014 for an interim period until

31 December 2015.

Other commitments: Owner of WA Capital Limited

and Trustee of Stoneygate Trust.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Directors and officers continued

Ian Bull

Non-Executive Director

Independent

Appointed: July 2019

Skills and contribution: Ian has over 30 years’

experience as a strategy and finance specialist built

from executive and non-executive roles at online and

multi-site consumer-facing businesses. He has

long-standing plc experience, with a deep

understanding of audit practices and risk management

frameworks, which enables him to promote open and

frank discussions and challenge, as well as ensure

strong relationships with management, auditors, and

other stakeholders. Ian is a Fellow of the Chartered

Institute of Management Accountants.

Ian will be appointed Senior Independent Director with

effect from the end of the 2024 AGM.

Previous roles: Ian was Chief Financial Officer of

Parkdean Resorts Group from 2016 to 2018 and Chief

Financial Officer of Ladbrokes plc from 2011 to 2016.

He was Group Finance Director of Greene King plc

(2006 to 2011), having spent his early finance career at

Whitbread PLC, Walt Disney Company and BT Group.

Ian is a former Non-Executive Director and Audit Chair

of Paypoint Limited, Senior Independent Director and

Audit Committee Chair of St. Modwen Properties plc

and Chair of Lookers plc.

Other commitments: Senior Independent Director at

Domino’s Pizza Group plc and Non-Executive Director

at Croda International Plc. Member of Chapter Zero,

the Directors’ Climate Forum.

Ajay Kavan

Non-Executive Director

Independent

Appointed: March 2024

Skills and contribution: Ajay is an accomplished

business leader with strong digital and retail credentials

and experience driving organic growth, strategic

partnerships, and M&A. Ajay’s expertise in delivering

online and multi-channel propositions, together with

his in-depth understanding of operations and

relationships from his work as an advisor and mentor,

strengthens the Board’s skills as we continue to drive

growth across our total retail system.

Ajay will be appointed as Chair of the Remuneration

Committee with effect from the end of the 2024 AGM.

Previous roles: Ajay was Chief Executive of Matches

Fashion from 2020 to 2021 and Vice President at

Amazon from 2011 to 2020. Prior to that, he was

Marketing and Strategy Director, Homebase at Home

Retail Group (2004—2011) and Multi-Channel Director,

B&Q at Kingfisher (2000—2004).

Other commitments: Senior Advisor at KKR, member

of advisory panel to Piper Private Equity, Non-Executive

at Rohlik Group, mentor to CEOs of high growth US/EU

digital businesses and Vice Chair of In Kind Direct.

William Reeve

Senior Independent Non-Executive Director

Independent

Appointed: July 2015

Skills and contribution: William is a serial entrepreneur

and technology investor with extensive experience in

the digital sector and of M&A. He has served as a

Non-Executive Director of listed companies, P/E

backed businesses and startups, placing him in an ideal

position to be our Senior Independent Director and

chair our Remuneration Committee, ensuring that our

approach to remuneration is aligned with our strategic

objectives and values.

William Reeve will not be standing for re-election at the

Company’s 2024 AGM.

Previous roles: William co-founded three internet-

related businesses: Fletcher Research, LOVEFiLM.com,

and Secret Escapes. He is a former Non-Executive

Director of Graze.com, Paddy Power plc, Zoopla and

Nutmeg among others.

Other commitments: Chief Executive of Oh

Goodlord Limited.

Marion Sears

Non-Executive Director

Non-Independent

Appointed: July 2004

Skills and contribution: A long-standing Board

Director, Marion brings a wealth of expertise from her

extensive City, investment and banking career which

included navigating complex mergers and acquisitions.

Utilising her significant plc experience and stakeholder

understanding, enhanced by her role as the

Designated Colleague NED for colleague matters,

Marion plays an important role in facilitating informed

Board decision-making.

Previous roles: Marion was Dunelm’s Senior

Independent Director and Chair of the Remuneration

Committee from 2006 to 2015 and was Chair of the

Nomination Committee until 2016. She had an

executive career in the City in investment banking at

Flemings, Chase and JP Morgan, prior to which she

worked in corporate finance, as an investment analyst

and in industry. Marion’s previous Non-Executive

Director experience includes WH Smith and

Persimmon where she chaired the remuneration

and ESG committees.

Other commitments: Non-Executive Director and

Chair of Remuneration Committee at Keywords Studios

plc, Non-Executive Director at Schroder Asian Total

Return Investment Company plc and Director of

WA Capital Limited. Member of Chapter Zero, the

Directors’ Climate Forum.

Key

Audit and Risk Committee member

Nomination Committee member

Remuneration Committee member

Committee Chair

Independent Director

Designated NED for colleague matters

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Directors and officers continued

Arja Taaveniku

Non-Executive Director

Independent

Appointed: February 2021

Skills and contribution: Arja is an experienced business

leader, with a wealth of knowledge from her executive

roles at international home retail businesses. She has

particular expertise in the strategic and operational

development of customer propositions and product

value chains, as well as environmental, social and

governance (‘ESG’) initiatives, driving Board debate

in these important areas.

Arja Taaveniku will step down from the Board at the end

of the calendar year.

Past experience: Arja was a member of the Group

Executive at Kingfisher plc and Chief Executive of its

subsidiary, Kingfisher International Products Limited

from 2015 to 2018. Before that, she was Chief Executive

of lkano Group S.A. (2012 to 2015), having previously

held various leadership roles at IKEA Group from 1989

to 2012 including Global Business Area Director.

Arja is a former Chair of Polarn O. Pyret and Svenska

Handelsfastigheter AB and Non-Executive Director at

Handelsbanken Group.

Other commitments: CEO of HomeCentre

(Landmark Group).

Vijay Talwar

Non-Executive Director

Independent

Appointed: October 2021

Skills and contribution: Vijay is a proven business

leader in driving significant digital and operational

transformations. He has broad international executive

experience developed at consumer-facing, omni-

channel businesses, bringing a different dimension to

Board discussions. Further, as a former Certified Public

Accountant and CFO, he provides depth to the Audit

and Risk Committee’s oversight.

Previous roles: Vijay was Chief Executive Officer of

ContextLogic Inc from February to September 2022.

Prior to that, he was Chief Executive Officer of

Footlocker EMEA from 2019 to 2022 and President of

Digital at Foot Locker from 2016 to 2019. Previously, he

was President of Gifts/Special Occasions at Sears

Holdings (2014 to 2016), held C-suite positions at Blue

Nile from 2010 to 2014 and was Chief Executive Officer

at William J Clinton Foundation India (2008 to 2010).

Vijay was COO for EMEA at Nike from 2002 to 2008.

Other commitments: Chief Commercial Officer and

Chief Digital Officer at Avolta AG (formerly Dufry AG).

Dan Taylor

Non-Executive Director

Independent

Appointed: March 2024

Skills and contribution: Dan is an experienced CEO,

with a recognised track record of delivering strategic

plans to drive growth in digital and consumer-facing

brands and leading on M&A and integration

programmes, both in the UK and internationally.

His experience adds further depth and understanding

to Board debate as we continue to evolve our

customer proposition.

Previous roles: Dan held senior Executive roles at

PaddyPowerBetfair from 2015 to 2020; he was Chief

Executive (2018—2020), MD, UK & Ireland (2017—2018)

and MD, Retail (2015—2017). Before that, he was

Managing Director of Teletext Holidays (2013—2014),

Director of Strategy and Commercial Development

at DMG Media (2009—2013) and Associate Partner at

OC&C Strategy Consultants (2001—2009).

Other commitments: CEO of Flutter International at

Flutter Entertainment plc.

Luisa Wright

Group General Counsel & Company Secretary

Appointed: November 2022

Skills and contribution: Luisa is an accomplished

general counsel, company secretary and regulatory

advisor, with extensive plc experience built at

consumer-facing digital, retail and technology

companies. She attends Board and Board Committee

meetings, ensures that legal and governance matters

are not only anticipated but also considered and

addressed, and offers invaluable support to the Board.

Previous roles: Luisa was Group General Counsel &

Company Secretary of The Rank Group Plc from 2018

to 2022 and Group General Counsel & Company

Secretary of Sportech Plc from 2011 to 2017. Prior to

that, Luisa was a private practice lawyer at Olswang LLP

(now CMS Cameron McKenna Nabarro Olswang LLP)

from 2000 to 2011. Luisa qualified as a lawyer with

Olswang LLP.

Other commitments: None.

Bill Adderley

Founder and Life President

Bill together with his wife Jean founded the business

in 1979. Although no longer on the Board or actively

involved in management, Jean remains a major

shareholder.

Key

Audit and Risk Committee member

Nomination Committee member

Remuneration Committee member

Committee Chair

Independent Director

Designated NED for colleague matters

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

A leadership team with good balance

and relevant experience

Governance dashboard

Board overview as at 29 June 2024

Independence*

1. Non independent 45%

2. Independent 55%

FY24 Board and Committee attendance

The table below sets out Board and Committee meeting attendance during the year to 29 June 2024.

The number of meetings attended is shown next to the maximum number of meetings that each Director was

entitled to attend.

Director

Committee

memberships Board

Audit and Risk

Committee

Remuneration

Committee

Nomination

Committee

Will Adderley

8/8 n/a n/a 3/3

Alison Brittain

8/8 n/a 3/3 3/3

Ian Bull

8/8 4/4 3/3 3/3

Kelly Devine

8/8 3/3 2/2 2/2

Ajay Kavan

3/3 1/1 2/2 1/1

William Reeve

8/8 4/4 3/3 3/3

Peter Ruis

3/3 2/2 2/2 2/2

Marion Sears

8/8 n/a n/a 3/3

Arja Taaveniku

8/8 4/4 3/3 3/3

Vijay Talwar

8/8 4/4 3/3 3/3

Dan Taylor

3/3 1/1 2/2 1/1

Nick Wilkinson

n/a

8/8 n/a n/a n/a

Karen Witts

n/a

8/8 n/a n/a n/a

1. Kelly Devine was not considered independent with effect from 11 March 2024 due to her accepting a role in-house with the Company. She was not a

member of any Board Committee after such date. Kelly stepped down from the Board on 5 July 2024, ahead of commencing her new role later in the month.

2. Ajay Kavan and Dan Taylor joined the Board on 1 March 2024.

3. Peter Ruis stepped down from the Board on 10 January 2024.

* Number excludes the Chair

who was independent on

appointment.

For more information on

our Board appointment

process see page 76

For our annual statement

on Board diversity targets

see page 80

Chair Senior

Independent

Director

Senior Board positions

Chief

Executive

Officer

Chief

Financial

Officer

Ethnicity

1. White 83%

2. Asian 17%

Age diversity

1. 40—50 17%

2. 50—60 58%

3. 60+ 25%

Gender

1. Male 58%

2. Female 42%

Female

Male

Length of tenure

1. 0—3 years 50%

2. 3—6 years 17%

3. 6—9 years 17%

4. 9+ years 17%

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Governance

framework

We have always believed that good

governance — in our words ‘doing the right

thing’ — helps companies make better

decisions for the benefit of all stakeholders.

Our governance framework enables

informed decision-making, effective

oversight and clear accountability. It also

allows for delegation of specific matters to

the appropriate committees. A high-level

summary of our approach, illustrating where

responsibilities fall, is set out on the right.

The Board believes that good governance

supports Dunelm’s purpose, shared values

and strategy, and is satisfied that these

elements and Dunelm’s culture are aligned.

Group Board Board Committees

Group Board reviews/challenges/approves

The Board is supported by three Committees

to which it has delegated certain matters in

order to ensure that they receive the

appropriate level of consideration. These

Committees support the Board in discharging

its duties. Each of the Committees operates

under terms of reference approved by the

Board, which are reviewed annually and can

be found on the corporate website:

corporate.dunelm.com.

Nomination Committee

Recommends appointments to the Board,

keeps the composition of the Board under

review, oversees the succession plans for the

Board, Executive Team and senior leadership

and promotes diversity on the Board and

across the Group.

See page 74 for Nomination

Committee report

Audit and Risk Committee

Maintains oversight of the Group’s financial and

narrative reporting, assesses the effectiveness

of internal control and risk management

systems, monitors the independence of internal

and external audits and manages the

relationship with the external auditor.

See page 81 for Audit and Risk

Committee report

Remuneration Committee

Establishes the Remuneration Policy,

determines the remuneration of the Executive

Directors and Chair, oversees implementation

of the Remuneration Policy and remuneration

policies and practices across the Group.

See page 89 for Remuneration

Committee report

The Executive Team is supported by three

executive-led committees, which provide

updates to the Board, Audit and Risk

Committee, Remuneration Committee and

Executive Team as appropriate.

Risk and Resilience Committee

Oversees and reviews principal and operational

risks, tracks key risk indicators, receives updates

on key compliance areas such as data

protection, regulated credit, ethical sourcing,

store security and business conduct and

monitors trends. Chaired by the CFO.

See pages 39 and 86 for more

information

Good and Circular Steering Group

Oversees initiatives focused on achieving our

Good and Circular goals, tracks progress

against targets and reviews new proposals such

as new circular business models and further

improvements to data collection and

monitoring. Chaired by the CEO.

See our Sustainability Report 2024

Talent Committee

Oversees and develops succession planning at

all levels of the business and monitors progress

against our ‘Know-Grow-Flow’ talent

management initiative. Chaired by the Stores

and People Director.

See our Sustainability Report 2024 for

more information on our ‘Know-Grow-

Flow’ initiative

The Board as a whole is

responsible for the overall

direction, performance and

long-term success of the Group.

It is responsible for setting and

role modelling our purpose and

shared values. It provides

effective challenge to

management on the execution

of the strategy and is

responsible for ensuring that

the Group maintains effective

risk management and internal

control systems.

The Board delegates

responsibility for the day-to-day

operational management of the

Company to the CEO.

The CEO is supported by a

team of executives each of

whom head a key function area

of the Group and form the

Executive Team, which

operates under the CEO’s

direction and leadership.

Executive Team CommitteesExecutive Team

Executive Team informs/recommends/reports

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Governance framework continued

Roles and

Responsibilities

The Chair and Chief Executive have clearly

defined roles which are separate and distinct.

The specific duties and division of

responsibilities between them have been

agreed by the Board and are summarised

here, together with an overview of the roles

of the Senior Independent Director, the

Executive Directors, the Non-Executive

Directors, the Group General Counsel and

Company Secretary and the Designated

NED for colleague matters.

Written statements setting out the full

responsibilities for each role are available

to download from the corporate website:

corporate.dunelm.com

Chief Executive Officer

• Proposing the strategic objectives of the Group for approval by the

Board and delivering the strategic and financial objectives in line with

the agreed purpose and strategy.

• Leading the Executive Team and senior leadership in managing the

operational requirements of the business.

• Leading on climate change and sustainability objectives of the Group.

• Providing clear and visible leadership of our shared values.

• Effective and ongoing communication with colleagues and

shareholders.

Chief Financial Officer

• Working with the CEO to develop and implement the Group’s

purpose and strategic objectives.

• Focusing on the financial delivery and performance of the Group.

• Ensuring that the Group remains appropriately funded to pursue

our strategic objectives.

• Ensuring proper financial controls and risk management of the

Group and compliance with associated regulations.

• Leading on investor relations activities and communications

with shareholders.

Deputy Chair

• Maintaining a close dialogue with the Chair and the CEO.

• Contributing to the development of the Group’s purpose, culture

and values by promoting and visibly demonstrating the Company’s

long-established shared values.

• Assisting the CEO in strategic and operational activities as requested.

• Supporting and deputising for the Chair as required.

Group General Counsel and Company Secretary

• Supporting the Chair and Non-Executive Directors with their

responsibilities.

• Advising on corporate governance matters and regulatory compliance.

• Facilitating individual induction programmes for Directors and

assisting with training needs as required.

• Assisting with communications with shareholders and organising

the AGM.

Chair

• Leading the Board and responsible for its effectiveness. Leading on

governance.

• Setting the agenda, style and tone of Board discussions with

a particular focus on strategic matters.

• Ensuring that each Non-Executive Director makes an effective

contribution to the Board.

• Ensuring that the Directors receive accurate, timely and clear

information.

• Promoting a culture of openness and debate.

• Facilitating constructive Board relations.

Senior independent Non-Executive Director

• Acting as a ‘sounding board’ for the Chair and an intermediary for

the other Directors.

• Leading the Non-Executive Directors in their annual assessment of

the Chair’s performance.

• Available to shareholders, particularly if they have concerns that the

normal channels have failed to resolve, or for which such contact

would be inappropriate.

• Leading the Chair succession process.

Non-Executive Directors

• Providing constructive contribution and challenge to the development

of strategy and ensuring that decisions are taken so as to promote

the success of the Company in the interests of all stakeholders.

• Monitoring operational and financial performance and scrutiny of

management performance in the delivery of strategic objectives.

• Providing oversight of financial and other control processes for

risk management.

Designated Non-Executive Director for colleague matters

• Engaging with colleagues (for example through the National

Colleague Voice) to represent the ‘Colleague Voice’ at the Board.

• Monitoring the effectiveness of colleague engagement initiatives.

• Providing regular updates to the Board.

Executive

Governance

Non-Executive

Dunelm Group plc

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Strategic report Governance report Financial statements Other information

Governance framework continued

About our Board

The Board has agreed that our optimum

number of Board Directors is between nine and

eleven. As at the date of this report it comprises

eleven

, with an independent Chair, four

Executive Directors/non-independent Non-

Executive Directors, and six independent

Non-Executive Directors. We consider that this

structure provides a good mix of backgrounds

and skills, enables the right level of independent

challenge, and is one that allows for effective

decision-making. We maintain a clear division

o1esponsibilities between the leadership of the

Board and the executive leadership of the

business, as articulated on the preceding page.

Schedule of Matters Reserved

Certain key matters requiring Board approval

are set out in a formal schedule of matters

reserved, which the Board reviews periodically.

Examples of such matters include Group

strategy and budget, Group capital structure,

approval of financial results and Annual Report

and Accounts, significant capital or contractual

commitments, ensuring maintenance of internal

control and risk management systems and

approval of significant Group-wide policies.

The schedule of matters reserved for the

Board is available on corporate.dunelm.com

Managing conflicts of interests

Directors are required to disclose any actual

or potential conflicts of interest to the Board

immediately as and when they arise throughout

the year. These are considered by the Board

and any authorisations given are recorded in the

Board minutes and reviewed annually. In addition,

a formal process is undertaken each year when

all Directors confirm to the Board details of any

other directorships and relevant information in

connection with related parties.

The Board takes action to ensure that the

influence of third parties does not compromise

or override the independent judgement of the

Board. Should Directors have any concerns

about the operation of the Board or Dunelm

management that cannot be resolved, these

can be recorded in the Board minutes. If, upon

resignation, any Non-Executive Director has

concerns of this nature, they may provide a

written statement to the Chair for circulation.

The Board considers that its procedures to

approve actual and potential conflicts of interest,

to ensure that any related party transactions

involving Directors or their connected persons

are conducted on an arm’s length basis and

to provide a communications channel for

any unresolved concerns, are in place and

operating effectively.

Director independence

The Board considers that Alison Brittain was

independent on her appointment to the Board

and subsequently as Chair. Kelly Devine was

not considered independent with effect from

11 March 2024 upon accepting a role in-house

with the Company and as a result stepped

down from all Board Committees. She stepped

down from the Board in July 2024, ahead of

commencing her new role the following month.

William Reeve reached his nine-year tenure in

July 2024. The Nomination Committee

confirmed that it is comfortable that he continues

to demonstrate independent judgement and

leadership skills — further information can be

found in the Nomination Committee Report on

page 74. William will be stepping down from

the Board at the close of the AGM. All other

Non-Executive Directors with the exception of

Marion Sears, are considered to be independent.

The Board has treated Marion Sears as non-

independent since September 2015 in view of

her tenure of more than nine years on the

Board, and her subsequent appointment as a

Director of WA Capital Limited in March 2016.

WA Capital Limited is a private limited company

established by Sir Will Adderley (the Deputy

Chair, and major shareholder) to act as a

long-term holding company for his beneficial

interest in the Company and various other

investments. The Board determined that this

appointment does not affect her judgement as

a Non-Executive Director of Dunelm, and that

any potential conflict of interest has been

cleared on the basis that WA Capital Limited

and Sir Will Adderley are parties to a

Relationship Agreement, details of which can

be found in the Directors’ Report on page 117.

Re-election

In accordance with the UK Corporate

Governance Code, all Directors, with the

exception of William Reeve, will stand for

re-election at the 2024 AGM.

Non-Executive Directors will be subject to

a separate vote by shareholders independent

of the Adderley family as required by the UK

Listing Rules. Marion Sears will put herself

forward for reappointment at the AGM by

shareholders, independent of the Adderley

family, as well as under a full shareholder vote.

Time commitment

The Board recognises the importance of

individual members having sufficient time to

discharge their duties. On behalf of the Board,

the Nomination Committee reviews the time

commitment of the Chair and each Non-

Executive Director. The Board is satisfied that

they each commit sufficient time to their duties

to discharge their responsibilities effectively.

None of the Executive Directors hold any non-

executive board positions at a FTSE 100 company.

Please see pages 60 to 62 for each Director’s

biography, which includes details of their

other key commitments

1. There were twelve Directors at FY24 year end. Kelly Devine

stepped down from the Board on 5 July 2024.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Governance framework continued

Induction and training

Upon joining the Board, each new Director is

offered a comprehensive and tailored induction

programme with visits to key sites and meetings

with the Executive Team, senior leadership and

other colleagues.

See page 76 for an overview of the recently

appointed NEDs’ induction process

The Group General Counsel and Company

Secretary reports to the Board at each meeting

on new legal, regulatory and governance

developments that affect the Group and actions

are agreed where needed. Directors attend

seminars provided by independent organisations

which cover a wide range of governance topics.

As part of the annual Board evaluation, any

additional training or development needs are

addressed by the Chair with each Director.

For details of the specific skills and

contribution of each Director see the

Directors’ biographies on pages 60 to 62

Advice and insurance

All Directors have access to the advice and

services of the Group General Counsel and

Company Secretary. In addition, Directors may

seek legal advice at the Group’s expense if they

consider it necessary in connection with their

duties. The Group purchases Directors’ and

Officers’ liability insurance cover for its Directors

and officers.

Share buyback and Rule 9 waiver

Since the time of flotation of the Company,

the members of the Adderley family, including

Bill and Jean Adderley, Lady Nadine Adderley

and Sir Will Adderley, have been considered to

be acting in concert (‘a Concert Party’) for the

purposes of Rule 9 of the City Code on

Takeovers and Mergers (the ‘Takeover Code’).

At the date of this report, Sir Will Adderley is

beneficially interested in 31.1% of the issued

share capital of the Company, and the Concert

Party controls 42.4%. Bill and Jean Adderley are

no longer Directors of the Company or actively

involved. Sir Will Adderley is a Director and

Deputy Chair.

As usual we will be requesting authority to buy

back up to 5 million shares (2.5%) of our share

capital) at the AGM. This authority is to allow the

Company to purchase shares in order to satisfy

future share option entitlements for colleagues,

excluding Sir Will Adderley. Given that it is

expected that shares bought by Dunelm in the

market will be reissued, then no dilution or

change of control should occur either for the

Concert Party or for other shareholders. As Sir

Will Adderley has a beneficial interest of above

30% of our share capital, and the interest of the

Concert Party is less than 50%, we are required

to ask shareholders to approve a waiver of Rule

9 of the Takeover Code. This waiver permits the

Company to exercise its authority to buy back

shares without triggering an obligation on

Sir Will Adderley to make an offer to buy all

of the shares in the Company.

We understand that some shareholders have

concerns about Rule 9 waivers in general and/or

they may be bound by their voting policy to vote

against the resolution. Nevertheless, we hope

that shareholders will give this administrative

matter full consideration and conclude that they

can support the waiver in line with the Board’s

recommendation, notwithstanding any internal

voting policy. In this regard we would like to

reassure shareholders that:

• Shares bought back by the Company would

be held in treasury and used only to satisfy

share option entitlements, and not cancelled.

• Since 2012, Sir Will Adderley no longer

participates in the Long-Term Incentive Plan

or any other share-based incentive plan, and

therefore his shareholding will not increase

through that mechanism.

• Since flotation of the Company in 2006, the

Adderley family has reduced its holding (from

67% to 42.4% currently).

• There has been a Relationship Agreement in

place since flotation which provides

safeguards to other shareholders — for details

please see page 117.

We therefore request that shareholders take

into account our specific circumstances when

making their voting decision on the waiver

resolution, and hope that shareholders will

support the Board’s recommendation.

The Board has reviewed whether our policy to

purchase shares in the market to satisfy share

option entitlements (as opposed to issuing

shares) is still appropriate; we believe that it is in

the interests of our shareholder base as a whole

as it avoids dilution of shareholdings, and it is

supported by the majority of our institutional

shareholders. We would like to reiterate that

shares bought back by the Company will be

held in treasury and used only to satisfy share

option entitlements, and not cancelled. The

Company did not purchase any of its own

shares during FY24.

Risk

The Board has overall responsibility for the

management of risk and for setting the risk

appetite. During the year, the Board conducted

a review of the Company’s principal risks and

approved the Group’s risk appetite.

See page 38 to 45 for the risk management

framework and the Group’s principal risks

and uncertainties

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Culture and values

Culture

Dunelm has an open and straightforward

culture, with a focus on doing the right thing

and taking decisions for the long term. This

reflects the values instilled by the Adderley

family, who founded our business 45 years

ago and are still our major shareholders.

The foundations of our culture and values are

apparent in the reflections of some of our

longest-serving colleagues who came together

as part of our recent celebration of 40 years of

stores; a snapshot of their comments is set out

on the following pages.

The Board is careful to ensure that we protect

and retain this culture as the business grows and

becomes more complex.

Our shared values

Our shared values have inevitably evolved over

time from the business principles formulated

by Sir Will Adderley, our Deputy Chair, over

a decade ago. However, that they have not

changed significantly is testament to their

strength and importance to the business.

We very much believe in setting the tone from

the top and consider it the Board’s responsibility

to instil and maintain a culture of openness,

integrity and transparency. We also expect our

Directors and senior leadership team to role

model our shared values and consider them

when making decisions and communicating

with stakeholders.

We believe that our shared values are an

essential contributor towards driving the right

behaviours and maintaining a positive culture of

mutual respect, trust and constructive challenge.

We are strongly opposed to any form of

corruption or bribery and have controls in place

that have been built around a clear understanding

of how and where bribery risks could affect our

business. This includes policies (such as our

Anti-bribery & Anti-corruption policy),

procedures such as conducting due diligence

on suppliers, annual training for colleagues

on bribery risks and an ongoing audit and

assurance programme in respect of our

suppliers. Bribery risk management is discussed

at senior leadership meetings, including at the

Risk and Resilience Committee, and also at the

Audit and Risk Committee.

We encourage any colleagues and other

stakeholders with concerns to speak out and

have facilitated this through our Whistleblowing

policy, which enables reports to be submitted

on a named or anonymous basis. Reports are

kept strictly confidential and concerns identified

are referred to appropriate managers within the

Group for investigation. An analysis of reports is

provided regularly to the Audit and Risk

Committee.

Monitoring our culture

We aim to provide an environment that inspires,

engages and develops all of our colleagues to

reach their full potential. The Board engages

directly with our colleagues in a number of ways

that assist it in monitoring our culture, including

by means of our colleague representative body,

National Colleague Voice (‘NCV’) (see page 22

for more information).

Our Designated NED for colleague matters

(who attends NCV meetings) is Marion Sears,

who has a wealth of workforce experience from

her roles as chair of remuneration and ESG

committees at listed companies, including

Dunelm’s Remuneration Committee from 2006

to 2015. She also has an in-depth understanding

Our purpose is ‘To help create the joy of truly

feeling at home, now and for generations to

come’. It informs our strategy, is underpinned

by our shared values and is supported by our

approach to sustainability (see our Sustainability

Report 2024 for more information). We are

committed to ensuring that the Company’s

actions are in keeping with our culture, values

and purpose to drive long-term success.

Codes of Conduct, anti-bribery and other

policies

Our shared values are reflected in our Group

policies, which are an important expression of

how we look after our colleagues and how they

should expect to be treated by others. These

policies include a Code of Business Conduct

and a Colleague Code of Conduct, which set

out specific standards of ethics and behaviour.

These Codes make reference to a number of

other policies and procedures that have to be

followed, including Equality & Diversity, Health

& Safety, Prevention of Slavery and Human

Trafficking Statement, Ethical Code of Conduct

for Suppliers and Partners, Tax Strategy,

Whistleblowing and our privacy notices.

Mandatory training is provided on all high-risk

areas as part of induction and on an annual basis.

of Dunelm’s culture, values and people, having

been on the Board since 2004, placing her in an

ideal position to understand colleague views

and ensure that these are fed into the Board’s

decision-making processes.

People and culture is one of our principal risks,

which are considered formally by the Executive

Team and Board of Directors twice a year with

relevant trends tracked and discussed as

appropriate. For more information on our

People and Culture risk see page 43.

Culture is also monitored by way of regular

reporting to the Group Board and Executive

Team, by way of specific ‘People’ reports

(covering engagement, retention, gender pay

and diversity, amongst other things) and others

that are indicative of culture, such as health and

safety and whistleblowing. The Nomination

Committee supports the Board in reviewing

culture, diversity, inclusion and talent

management and the Remuneration Committee

in assessing executive performance.

Finally, we encourage our Directors, Executive

Team and senior leadership to ensure that they

regularly interact in-person with colleagues

working in all areas of our business. By

engaging with, listening to, respecting and

responding to our colleagues, we facilitate an

open working environment, encourage a sense

of belonging and develop a strategy that

resonates, all of which supports our ongoing

ambition to deliver continuous improvement

and further growth.

We very much believe in setting

the tone from the top… we are

committed to ensuring that the

Company’s actions are in keeping

with our culture, values and

purpose to drive long-term success.

Dunelm Group plc

Annual Report and Accounts 2024

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Culture and values continued

This year we celebrated the 40th anniversary

of the first Dunelm store, which opened at

Leicester Churchgate in the early 1980s. The

store marked the first move by the Adderley

family away from the market stall where they

started the Dunelm business back in 1979.

To mark the milestone, over the summer

we provided colleagues with an additional

‘Double Discount’ day, an opportunity to

celebrate with their teams and reflect on our

heritage and culture, and featured a pop-up

museum of Dunelm memorabilia at our Head

Office in Leicester.

We brought together 10 of our longest-

serving colleagues to reminisce about their

earliest memories of Dunelm stores, including

Churchgate. They also discussed how far the

business has come since that opening, and

what makes it special to work at Dunelm.

We filmed an internal video to capture

their recollections and a few snippets from

their discussions can be found on the

following page.

Will Adderley

Deputy Chair

(31 years)

Sarah Way

Central E-Fulfilment Manager

(26 years)

Cheryl Archer

Furniture Operations

Support Manager

(21 years)

Emma Connor

Buyer — Bathroom

(27 years)

Ian Sanders

Project Manager

(30 years)

years of stores

Steve Barton

Director of Property

(21 years)

Rory McAllister

Stores Director

(16 years)

Barbara Inchley

Senior Manager,

Commercial

(22 years)

Lisa Allen

Buying Administration

Manager (35 years)

James Rowell

Audit and Security

(33 years)

Dunelm Group plc

Annual Report and Accounts 2024

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Leicester Churchgate:

Dunelm’s first store opened in

an old foundry in the early 1980s

— and the brand Dunelm Mill

was established.

Culture and values continued

Barbara: [On Churchgate] “That was an

absolute favourite shop of mine…I worked

just down the road, so at lunchtime I used to

go into Churchgate and it was just a treasure

trove of really exciting products.”

Will: [On Churchgate] “It was an old foundry,

most people would describe it as a mill. It

certainly wasn’t designed to be a shop and

had an awful configuration. But we set it up

and in the lobby, we had all of the wall

covered in curtains. Initially it just sold

seconds, but over time, it really got us on the

map in Leicester, and my Dad was able to

close his market stall and move there.

Because it had three floors above, that

became the warehouse.”

James: “Churchgate traded on its own for

a few years before the likes of Coalville,

Cannock and Hinkley, and then East Street.”

Barbara: “The fabrics were always so

important for us.”

Lisa: “[In our early stores] customers kept

coming back…some people would come

every single week…they were gutted if they

were going on holiday in case they missed

something. You didn’t know what was on our

delivery from one week to the next…it was

simply whatever Bill could buy. Customers

might have bought something the week

before and came back, hoping to find

something to match it.”

Barbara: “I remember driving down the road

and we would look out the window thinking

“that could be a good store”, and we’d write

it down!”

Rory: “Colleagues really knew what they

were doing — but did make the odd error.

I remember walking into the Thurmaston

store one day and there was a huge table

full of purple bedding. I asked where it all

came from and the manager said his auntie

quite liked it so he’d ordered loads of it.”

Cheryl: “I joined when we opened our first

distribution centre in Burton-on-Trent back

in 2003…we thought we were never going to

fill it…we filled it within the first six months.”

Sarah: “We took the first order for our

website in 2005, from the basement of our

Radcliffe store.”

Steve: “We once opened 16 stores in one

year — big stores and big investments.”

Rory: “It’s still really exciting when we open

a new store, with lots of energy. For the

customers in that catchment, it’s something

new for them. Recently in Cwmbran we

had a queue of over 400 customers

waiting outside.”

Will: “If you think about our history,

including our first website, and the Covid

period, we seem to be at our best when it’s

almost chaos. We move quickly when it’s

difficult. We have to keep taking those

opportunities, to move quicker…and that’s

exciting. If we’d stayed the same, we

wouldn’t still be here, and if we don’t

change we’ll be less relevant.”

Dunelm Group plc

Annual Report and Accounts 2024

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Board activities

Board meetings follow a rolling agenda of strategic, operational and

governance matters, which is refreshed during the year as necessary

to ensure the Board continues to focus on areas of priority.

The Board discharges its responsibilities

through an annual programme of Board and

Committee meetings, with additional ad hoc

meetings as required to meet business needs.

These are supplemented by visits to stores and

other sites. Agendas are determined in advance

to ensure that meetings are well-planned and

time is allocated as appropriate. Papers are

circulated ahead of time to ensure that

Directors are able to review and arrive at

meetings fully prepared.

The Chair meets with the Non-Executive

Directors at the end of each Board meeting.

This is a useful way of exchanging views and

dealing with any concerns or questions. In

addition to this, the Chair and the other

Non-Executive Directors regularly have informal,

individual meetings with the Executive Directors,

other members of the Executive Team and

other senior leaders in the business.

At each meeting in the year, the CEO reports on

strategic progress and operational performance

(including customers, colleagues and health

and safety) and the CFO reports on financial

performance. A rolling agenda of other

strategic, operational, sustainability, risk and

governance matters is refreshed during the year

as necessary to ensure the Board continues to

focus on areas of priority, whilst also continuing

to meet regulatory requirements.

• Annual strategy review

• Presentations on strategic

plans for each of stores,

digital and commercial

• Review of tech strategy

and roadmap

• Overview of responsible

sourcing

• Business development

updates

• Review of culture and values

• Deep dive on supply chain

• Q&A with suppliers

• Reviewed sustainability

strategy and received

updates on Good & Circular

initiatives and KRIs

• Received presentation on

generative AI

• Deep dive on customer

segmentation

• CEO and CFO reports

(which include trading

updates, KRIs, people and

H&S updates, customer and

market trends etc)

• Received feedback from the

National Colleague Voice

• Reviewed colleague

dashboard

• Reviewed interim and

preliminary results

• Approved final, interim and

special dividends

• Discussed feedback on

results and investor

engagement

• Reviewed principal risks

• Received cyber and data

protection updates

• Approved tax strategy

• Received corporate

governance and legislative

updates

• Annual health and safety

update

• Approved delegation

of authorities

• Approved actions from

Board evaluation

• Received Modern Day

Slavery update and

approved annual statement

• Approved share plans

• Approved Notice of

Meeting, received AGM

results and feedback

• Reviewed NED fees

• Reviewed conflicts of

interest register

• Approved gender pay

gap report

• Reviewed forward agenda

planner

• Confirmed risk appetite

Strategy Operational performance Governance

Strategy

31%

Time spent

Operational performance

38%

Time spent

Governance

26%

Time spent

FY24 Board activities

The Board held eight formally scheduled

meetings in FY24, as well as a full day

dedicated to strategy. Its activities are

broadly split between strategy, operational

performance & governance.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Board activities continued

Our approach to Section 172

Each of our Directors is mindful of their duties

under section 172 of the Companies Act 2006

(‘s.172’) to run the Company for the long-term

benefit of its shareholders and, in doing so, to

consider the interests of its key stakeholders

during its decision-making, and the impact of its

decisions on stakeholder relationships, on the

Company’s reputation for high standards of

business conduct, and on the environment.

The matters encompassed in s.172 touch on

everything we do, at a Board level in our

discussions and decision-making, and also at

a business level by members of our Executive

Team and the senior leadership team. Examples

of the ‘Board in action’ are set out on this page

and on page 73. On pages 20 to 24 we describe

our key stakeholders and summarise how and

why we engage with them more generally, what

matters most to them, allocation of responsibility

within the business and how we consider the

effectiveness of our engagement.

A key consideration when making decisions is

for the Board to balance the needs of our various

stakeholders, which may not themselves always

be aligned, while considering the Company’s

purpose, values and strategic priorities. The

Board acknowledges that not all decisions that

it makes will result in a positive outcome for all

stakeholders, but it remains focused on ensuring

that its decision-making is consistent and in the

best interests of the Company.

We ensure that the requirements of s.172(1)

Companies Act 2006 are met and the interests

of our stakeholder groups are considered,

challenged and debated through a combination

of the following practical approaches (all of

which were applied during FY24):

• the Board carries out an annual review of

strategy which assesses the long-term

sustainable success of the Group and our

impact on key stakeholders. Agenda items for

the following year are based on the decisions

and next steps agreed at this meeting;

• the Board’s risk management procedures

identify the principal and emerging risks

facing the Group, and the mitigation in place

to manage their impact. We consider these

through a stakeholder lens as set out on

pages 20 to 24;

• the Group General Counsel and Company

Secretary references relevant s.172 factors

against each agenda item in the minutes to

ensure they remain at the forefront of Directors’

minds when reflecting on discussions;

• the rolling Board agenda includes standing

items to ensure that stakeholders are fully

considered, including investor roadshow

feedback, updates on people matters, the

annual health and safety presentation,

modern slavery and anti-bribery reporting

and sustainability updates;

• there is a formal review of many of these

topics through standard Audit and Risk

Committee and Remuneration Committee

agenda items, as described later in this report;

• the Board considers impact on key

stakeholders when it reviews Group KPIs and

requests additional information as

appropriate; and

• all Directors attend our AGM, which provides

a valuable opportunity each year for all

shareholders to hear from the Board, and for

the Board to hear from our shareholders.

Strategy review

The Board met in May 2024 for its annual

strategy review. The day commenced with

a store-walk accompanied by commentary

from product category directors enabling

engagement with senior leaders and store

colleagues. Key topics then presented by the

Executive Team over the course of the day

included consumer trends and customers of

the future, elevating product mastery,

connecting with our customers digitally and

instore and reviewing our technology roadmap.

The structure of the day enabled a detailed

understanding and debate by the Board of

our strategy and growth plans. The extent of

our operational grip was both welcomed and

challenged, as was the scale of our ambition

and innovation. The Board also challenged

management on the potential for acceleration

of business change and efficiencies, whether

there can be even greater focus on operational

leverage and how the risks and opportunities

in the three-year plan have been balanced.

The Board acknowledged the importance of

continued investment in technology, insights

and data as key drivers to sustainable growth,

as well as the value of ongoing engagement

with our key stakeholders so as to ensure we

really understand their views, how our actions

are likely to impact them and consider this

within our decision-making.

The Board welcomed management’s

articulation of the growth strategy: building

‘The Home of Homes’. It participated in a lively

discussion on our culture and values and

confirmed its support for the three-year plan.

The agreed actions and takeaways for

management were noted with updates to be

provided by way of further presentations and

deep dives by business area built into the

Board agenda over the course of the next

12 months.

Board in action

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Board activities continued

The investment has given the

team a place they can be proud to

work in and there’s an amazing

sense of togetherness. Furniture

is a fast-growing category, and

HDN is a core part of that. Having

our own people, in our own vans,

giving a fantastic service to

customers is a real point of

difference and one that we

should celebrate.

Faye Atkins

Director of Commercial and Supply Chain

New home delivery depot

To ensure continued growth and delivery

on our strategic ambitions, it is critical that

we invest appropriately in our infrastructure.

With the increase in our Home Delivery sales

and ongoing development of our customer

proposition, together with feedback from

colleagues, we considered that our existing

Barnsley depot was no longer suitable to

support our ambitions. We therefore made

the decision to relocate the depot to another

location within Barnsley with increased space,

better colleague facilities and improved

security and transport links. It provides for a

more suitable and safer operation, improving

how much stock can pass through the site

and enhancing our customer service.

The site is one of five standalone hubs for our

Home Delivery Network (‘HDN’), which is a key

part of Dunelm’s customer proposition, enabling

us to deliver furniture directly to a room of our

customer’s choice.

Commercial and supply chain deep dive

In November 2023, the Board met at our Stoke

Distribution Centre. The Director of Logistics

Operations provided an update on logistics

performance, ongoing improvement projects,

our carrier strategy and colleague engagement

specific to this area of the business. Guided

tours were conducted around our site,

reminding Directors how our fulfilment

operations work and enabling them to ask

questions directly of colleagues at this location

and see firsthand improvements articulated in

previous Board updates, including those

relating to health and safety.

At the same meeting, the Directors were

provided with an overview of our Commercial

plans by our Director of Commercial and

Supply Chain and participated in detailed

discussions relating to our sustainability

initiatives, including our better manufacturing

programme and our responsible sourcing

programme (and the new tools that we are

implementing to assist with the collation and

monitoring of data and actions).

The Board considered the role that a trusted

and transparent supply base, with strong

communication and understanding, plays in

maintaining our reputation for high standards

of business conduct and meeting our

sustainability goals. The Directors were also

reminded of how our supply base has been

built up and the important role that committed

suppliers have played, and continue to play, in

our growth story. They discussed the ways in

which the role and demands on suppliers have

developed over time and how our own model

and approach has evolved to-date and will

need to evolve further in the future in order to

maintain value and competitive advantage.

To bring to life those relationships, the Board

then met in-person with a number of our

committed suppliers, participating in an

engaging Q&A, which further demonstrated

the value of direct engagement in

understanding what matters most to our

key stakeholders, in the short, medium and

longer term.

Board in action continued

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Alison Brittain

Committee membership

Alison Brittain (Committee Chair)

Sir Will Adderley

Ian Bull

Ajay Kavan

William Reeve

Marion Sears

Arja Taaveniku

Vijay Talwar

Dan Taylor

See page 63 for meeting attendance

Composition, succession

and evaluation

Nomination Committee report

On behalf of the Nomination Committee

(‘Committee’), I am pleased to present the

Nomination Committee report for the year

ended 29 June 2024. It was another busy

year, with added emphasis on ensuring that

we maintain the appropriate combination

of skills, experience and knowledge on our

Board in light of several changes to its

membership.

FY24 highlights/key activities

• Reviewed Board composition and Director

independence.

• Recommended the appointment of

Ajay Kavan and Dan Taylor as NEDs.

• Recommended the appointment of

Ian Bull as Senior Independent Director and

Ajay Kavan as Chair of the Remuneration

Committee.

• Focused on senior leadership succession

planning.

• Conducted an internal Board effectiveness

evaluation.

FY25 focus/priorities

• Externally facilitated Board evaluation.

• Further evolution of succession plans.

• Continued focus on diversity and inclusion.

1. Peter Ruis resigned from the Board on 10 January 2024, ahead

of the ninth anniversary of his appointment.

New appointments

We were mindful that a review of the

composition of the Board was required, with

Peter Ruis and William Reeve both approaching

nine years’ tenure during the course of 2024

Therefore, we commenced a search for new

Non-Executive Directors in the autumn of 2023.

We were delighted to welcome Ajay Kavan and

Dan Taylor to the Board in March 2024. Ajay and

Dan bring varied experience from different

multi-channel, consumer-facing businesses,

adding further expertise and skills to the Board

as we continue to unlock our potential and grow

our customer proposition. More information

about the recruitment process and Ajay and

Dan’s induction can be found on pages 76 and

77 respectively.

We announced on 11 July 2024, that after nine

years on the Board, William Reeve will not be

standing for re-election at our 2024 AGM.

In anticipation of this decision, during the year

the Committee’s work on succession planning

included the positions of Senior Independent

Director and Chair of the Remuneration

Committee, and I am delighted that, with effect

from 21 November 2024, Ian Bull and Ajay Kavan

respectively have been appointed by the Board

to undertake those roles.

Ian is our Audit and Risk Committee Chair

and is a long-standing Board member with an

in-depth understanding of the business and its

culture, placing him in an ideal position to be

appointed as our Senior Independent Director.

Ajay joined the Board earlier this year, and

whilst he is relatively new to the Company,

will have served nearly nine months on the

Remuneration Committee by the time of his

appointment and have completed a full annual

cycle of Remuneration Committee meetings.

We are confident that his wealth of executive

retail experience and role as an advisor and

mentor to CEOs stand him in good stead to

take on the role of Remuneration Committee

Chair. A detailed handover is underway

between William and Ajay. In addition, Ajay

has been engaging with colleagues, including

by attending National Colleague Voice

meetings, participating in a series of meetings

with me, our Group General Counsel and

Company Secretary, Stores and People

Director and other senior leaders in the

people and finance teams, and meeting with

our external remuneration consultants.

Independence

We apply careful consideration to ensuring

that we meet all relevant independence

criteria and, with a number of appointments

and resignations this year, this has been a

particular area of focus for the Committee.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Nomination Committee report continued

In light of other Board changes, and our wish

to ensure a smooth handover of responsibilities,

we asked William Reeve to continue on the

Board for an additional five-month period

beyond his ninth anniversary. However, in

doing so, we were mindful of the need to

consider his ongoing independence. The

Committee reflected on William’s contribution

and performance as an independent Non-

Executive Director and concluded that there

is no reason to suggest that his length of time

on the Board has or will affect his effective

challenge of the status quo and of management,

nor has it resulted in his being considered too

close to management to fulfil his oversight

roles. Although we agreed to reassess the

position regularly, the Committee remains

comfortable that he continues to demonstrate

independent judgement and leadership skills,

enhanced by his knowledge of the Company.

As mentioned above, William will step down

in November and will not seek re-election at

our AGM.

During the year, the Committee remained

informed on plans to appoint a new Customer

Director to the Executive Team. Following

a formal and robust recruitment process,

Kelly Devine, an independent Non-Executive

Director on our Board, was offered the role.

Kelly’s new role with us was announced

on 11 March 2024, when we confirmed that

she would step down from the Board on

5 July 2024. We also confirmed that she

would be considered non-independent with

immediate effect and would step down from

all Board Committees.

Diversity and inclusion

Diversity and inclusion remain a central and

vital area of focus for the Committee. We

welcomed the progress that management

made during the year in developing and

introducing new initiatives, and in particular

those focused on supporting colleagues from

underrepresented groups and ethnicities.

For details of our progress see page 80.

The diversity of our Board is on page 79, and

I am pleased to report that we have exceeded

the target set in the UK Listing Rules and Parker

Review guidelines to have at least one Board

member from a minority ethnic background.

Similarly, we exceed the requirement to have

at least one senior Board position held by a

woman and, throughout FY24, met the UK

Listing Rule and FTSE Women Leaders Review’s

target to have at least 40% female Board

members. We are extremely mindful that, for

the period between Kelly stepping down in July

2024 and William stepping down in November

2024, we will briefly fall below this target and

we will carefully consider gender balance in

the process for our next Board appointment.

Board evaluation

Finally, I am pleased to confirm that this

year’s Board evaluation process, which was

conducted internally, found that the Board and

its Committees continue to operate effectively.

Further details can be found on pages 78 and 79.

I look forward to meeting shareholders at the

Annual General Meeting on 21 November 2024.

Alison Brittain

Chair of the Nomination Committee

11 September 2024

Committee composition and governance

The majority of the Committee was

independent throughout FY24. It remains

so as at the date of this report, its members

comprising six independent Non-Executive

Directors, the independent Chair of the

Board, one non-independent Non-Executive

Director

and the Board’s non-independent

Deputy Chair

See pages 63 and 66 for more information on

the independence of Directors.

Only members of the Committee have the

right to attend Committee meetings. Other

individuals, such as the CEO and People and

Stores Director, are invited to attend all or part

of the meetings as appropriate. No Director

attends that part of a meeting during which his

or her own position is discussed. The Group

General Counsel and Company Secretary

acts as secretary to the Committee and attends

all meetings.

In FY24, the Committee met formally on three

scheduled occasions. An additional meeting

was held to recommend the appointment of

two new Non-Executive Directors. The agenda

for each scheduled meeting is based on a

standing agenda for the financial year, which

is updated as appropriate.

Role and principal duties

The Nomination Committee is responsible for

leading the process for Board appointments,

ensuring appropriate succession plans are

in place, and overseeing the development

of a diverse talent pipeline. Its principal

duties include:

• reviewing the structure, size and

composition (including the skills, knowledge,

experience and diversity) of the Board,

ensuring it remains effective and suited to

the Company’s strategic priorities;

• ensuring plans are in place for an orderly

succession to Board, Executive Team and

senior leadership positions and overseeing

the development of a diverse pipeline

for succession;

• keeping under review the leadership needs

of the business with a view to ensuring its

continued ability to compete effectively in

the marketplace;

• identifying and nominating for the approval

of the Board, candidates to fill Board

vacancies as and when they arise;

• leading a rigorous and transparent process

for Board appointments; and

• keeping under review demands on

Directors’ time.

The Committee’s full terms of reference can

be found at: corporate.dunelm.com

1. Marion Sears is not considered independent, due to the length

of her tenure and her role as a Director of WA Capital Limited.

2. Sir Will Adderley is not considered independent as he is a

significant shareholder and due to the length of his tenure and

his executive Deputy Chair role.

Dunelm Group plc

Annual Report and Accounts 2024

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Nomination Committee report continued

NED succession — review of skills,

experience and knowledge

During the year, the Committee undertook

a detailed skills review, utilising the framework

introduced the previous year for considering

each Director’s skills and experience. The

process anticipated the forthcoming departure

of two long-standing Non-Executive Directors

in 2024, which would also lead to the roles of

Senior Independent Director and Remuneration

Committee Chair being vacated.

The Committee considered the impact of the

expected departures from a skills perspective,

alongside other areas where additional

experience might be beneficial in light of the

Group’s strategic aims and objectives. The

same framework was used to review how

Directors identify from a gender and ethnicity

perspective. This was then used to guide the

search brief for recruiting Ajay Kavan and Dan

Taylor, who were appointed in March 2024.

The work has since been updated to reflect Ajay

and Dan’s respective skills and diversity, as well

as the impact of Kelly Devine stepping down

from the Board in July 2024 and Arja Taaveniku

stepping down at the end of the calendar year.

It is being used to inform the search brief for

the recruitment of the next independent

Non-Executive Director.

Key search criteria

• Consumer-focused leader with growth

mindset.

• Clear experience of driving innovation and

using technology to build businesses.

• Strong understanding of digital and

data-centric strategies to drive performance.

External search firm

MWM Consulting supported the search in

FY24 for Non-Executive Directors. It has no

further connection with the Company or

its Board.

External search diversity (longlist)

29%

of profiles female

14%

of profiles ethnic minority

nationalities represented

FY24 independent Non-Executive Director appointment process

We generally follow a well-established process for Board appointments as set out below, adapted where necessary to account for specific skills

required and circumstances.

Stage 1

Jul 2023

Stage 2

Sep 2023

Stage 3

Nov 2023

Stage 4

Nov 2023—

Jan 2024

Stage 5

Jan 2024

Stage 6

Feb 2024

MWM Consulting

engaged to support

the process and

conduct the search.

Detailed role and

person specification

drawn up and

approved by the

Committee, with

MWM Consulting

asked to ensure

a diverse longlist.

Longlist of potential

candidates presented

and discussed by the

Committee, following

which a shortlist was

determined.

Shortlisted candidates

met with the Chair,

Deputy Chair and

Marion Sears,

following which the

two preferred

candidates, Ajay

Kavan and Dan Taylor,

met with all other

Board members.

References taken,

alongside reputational

checks. Other

commitments were

assessed to ensure

that the candidates

had sufficient time to

dedicate to Board

member duties.

Recommendation

made to the Board

for approval and

announcement issued

on 8 February 2024

that they would join

the Board, and be

appointed to the Audit

and Risk, Nomination

and Remuneration

Committees with effect

from 1 March 2024.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Nomination Committee report continued

Each new Board Director receives a full and tailored induction,

led by the Chair and Group General Counsel and Company

Secretary. Dan and Ajay’s induction when they joined the Board

in FY24 included the following meetings:

Members of the Board.

• Chair provided an overview of the Board and its annual

programme of meetings.

• CEO discussed the strategy and ‘Plan on a Page’.

• Committee Chairs discussed how their respective

Committees operate and matters of significance.

• CFO provided a summary of the Group’s financial

performance and future plans.

Executive Team and senior leadership team.

• Introduction to management structure, business operations,

focus areas and performance.

• Introduction to key opportunities and risks in each area of

the business.

• Group General Counsel and Company Secretary provided an

overview of the governance framework and corporate structure.

Other colleagues and site visits.

• Attended a National Colleague Voice meeting to develop

an understanding of the views of colleagues.

• Visits to stores.

• Visits to our logistics and manufacturing centres.

Key advisors

• External and internal auditors.

• Remuneration consultants.

• Brokers.

For more information about our new NEDs, see biographies

on pages 61 and 62

Induction process for our new NEDs

Dan Taylor

Dan is a customer-oriented leader with strong retail credentials,

fluent on customer trends within the UK market and clear

understanding of how to harness insight and customer data

across online platforms to drive strategic decisions.

Ajay Kavan

Ajay has strong digital expertise across multiple consumer

categories, bringing strong focus on value creation. He has a

proven track record of developing and refining strategic plans

to drive performance and growth.

Executive Director succession

The Committee reviewed and refreshed CEO

and CFO succession plans during the year,

having dissolved the working groups initially

established for this purpose in favour of

discussions taking place with the full Committee

present. Work in this area built upon the

previously conducted market mapping exercise.

It also included a review of the internal pipeline

for the CEO and CFO roles, with a particular

focus on learning and development plans,

mentoring and Board exposure.

Senior leadership succession

During the year, the Committee reviewed

succession plans for the Executive Team and

other senior leadership roles. It also received

updates on the talent and skills of the senior

leadership team within our ‘Know, Grow, Flow’

framework, which provides the Committee

with a clear and consistent approach to

understanding capabilities. The focus this year

on ‘role model leadership’ as part of senior team

career development was particularly welcomed.

The Committee also discussed the interim

arrangements that were put in place for the

period between the previous Customer

Director’s departure from the business in early

2024 and Kelly Devine commencing the role in

July 2024.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Nomination Committee report continued

Assessing Board effectiveness

An evaluation of the Board, its Committees and

Directors is carried out each year. The review

helps to identify areas for improvement, informs

training plans and identifies areas of knowledge,

expertise or diversity which should be

considered in our succession plans. The Chair

engages with each individual Director during the

year on their performance and contribution and

the Senior Independent Director and Deputy

Chair review the performance of the Chair. The

Committee reviews the time commitment of the

Chair and each Non-Executive Director during

the year as appropriate.

During the year, the Board and each Committee

reflects on progress against the actions

identified from the previous year’s effectiveness

review. Progress against our FY23 evaluation is

set out on the right.

The FY24 evaluation was conducted internally

on a consistent basis with FY23. Each Director

completed a questionnaire in respect of the

Board and each Committee of which they are a

member or otherwise attended meetings on a

regular basis. The Group General Counsel and

Company Secretary collated the responses and

shared them with the Chair and each respective

Committee Chair. An executive summary with

the key findings was then shared, alongside

each report, with the Board and each

Committee’s members for discussion.

Progress against FY23 evaluation recommendations

Theme/Topic Outcomes from FY23 evaluation Actions implemented in FY24

Succession Planning • Acknowledgement that the appointment of new NEDs

to the Board, and to the roles of Senior Independent

Director and Chair of the Remuneration Committee

when William Reeve and Peter Ruis step down in 2024,

is a priority.

• Continue to focus on succession plans and capability

development for key senior positions.

Successful conclusion of recruitment process with the

appointment of Ajay Kavan and Dan Taylor in March

2024. Ian Bull to be appointed as Senior Independent

Director and Ajay Kavan as Chair of the Remuneration

Committee with effect from 21 November 2024.

Updates delivered on succession plans and capability

development for senior leadership during the year.

Stakeholder engagement • Undertake a more detailed review of supplier

relationships and consider increased supplier

engagement at Board level to further develop

understanding of opportunities and risks.

Supplier deep dive included presentations on supply

chain strategy, circular sourcing, and responsible

sourcing. The Board also participated in a Q&A event

with key suppliers.

ESG-related risks and

opportunities

• Continue to support management in refining our ESG

strategy and approach and ensure that it remains

relevant to our strategy.

• Provide feedback on reporting and share wider

learnings and experience.

Supported evolution of governance, reporting and

communication in this area, as articulated further in

the TCFD report on pages 46 and 47 and in our

Sustainability Report 2024.

Testing the Company’s

strategy and ambitions

• Include key topics raised by the Board at the strategy

day in May on the agenda for the forthcoming year.

• Continue to constructively challenge the Executive

Team in order to maintain our focus on driving

long-term growth.

Standing agenda items and allocation of time to

topics reviewed.

Executive presentations given at Board meetings

throughout the year and May strategy day provided

opportunity for in-depth review and challenge of

three-year plan and strategic objectives (please see

page 72 for further information).

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Nomination Committee report continued

Overall, the results of the FY24 evaluation were

very positive, with no major concerns or issues

raised. High scores continue to reflect a strong

and positive culture and an effective and

well-managed Board, notwithstanding the

changes in its composition during the year.

The comments are being used to help shape

the Board agenda and its priorities in FY25. It

was also confirmed that each Director, including

the Chair, continues to make an effective

contribution to the Board, is well-prepared and

demonstrates commitment to their role. It is

anticipated that an externally-facilitated

evaluation will be conducted in FY25.

Committee effectiveness

The effectiveness of the Committee was

considered as part of this year’s Board evaluation

process, details of which are set out on the

previous page. The review concluded that the

Committee continues to operate effectively and

having considered the findings, it was agreed

that the particular areas of focus for the

forthcoming year should be:

1. Continuing to focus on Executive and senior

leadership succession plans, both short term

and longer term;

2. Maintaining the emphasis on diversity and

inclusion in appointments and succession

plans and oversight of the impact of

initiatives; and

3. Appointing a new Non-Executive Director.

Diversity and Inclusion

Policy

Our overriding aim is to ensure that the Board,

its Committees and the Company comprise

outstanding people and teams who can lead

the business effectively in a manner aligned

to our purpose, shared values and strategy.

We believe that the Group’s best interests are

served by ensuring that our people represent

a range of skills, experiences, backgrounds and

perspectives. This is encapsulated in our

’stronger together’ shared value.

To achieve this aim, we remain focused on three

broad principles:

• refining the way we recruit;

• identifying, supporting and mentoring

existing diverse talent in the business; and

• increasing diversity amongst senior

appointments as they are made, including to

our Board and each of its Committees.

In line with this approach, the Committee is

committed to ensuring that the Board is at least

40% female

, that at least one of the Chair,

Senior Independent Director, CEO and CFO

positions is held by a woman and at least one

Board Director is from an ethnically diverse

background.

In addition, the Committee receives updates on

our approach to recruitment at all levels of the

business as part of its oversight of colleague

policies and practices. It continues to require

that specific effort is made to bring forward

diverse candidates for senior leadership and

Board appointments and monitors the Group’s

approach to people development to ensure

that it continues to enable talented individuals,

regardless of gender, marital status, sexual

orientation, disability, race, religion, colour,

nationality, ethnic origin, or age to enjoy career

progression within Dunelm.

Board

At a Board level, the UK Listing Rules prescribe

diversity targets. As at 29 June 2024, these were

met as follows:

Target Compliance

At least 40% of the

Board are women.

42% of our Board

were women.

At least one of the

senior Board

positions is held by

a woman.

Alison Brittain is Chair

and Karen Witts is

CFO.

At least one member

of the Board is from a

minority ethnic

background.

Vijay Talwar joined

the Board in October

2021 and Ajay Kavan

joined the Board in

March 2024.

FY24 Board evaluation findings

The key themes and outcomes from the Board review were as follows:

Theme Outcome

Board size and

composition

• Acknowledgement that the Board is going through a period of change.

• Gender balance is a consideration in light of recent and forthcoming

changes.

• Continue to focus on succession plans.

Monitoring of

culture and

behaviours

• Further reflect on how we assess and monitor culture, how our desired

culture has been embedded and how we will continue to align

behaviours with our purpose, values and strategy.

Stakeholder

engagement

• Ongoing desire for deeper understanding of key stakeholders.

ESG-related risks

and opportunities

• Noted to still be a maturing area, with a need to continue to develop and

maintain clarity of plans and reporting.

Testing the

Company’s strategy

• Include key topics raised by the Board at the strategy day in May on the

agenda for the forthcoming year.

• Request for deeper understanding of how leveraging technology will

continue to drive our growth.

1. We are extremely mindful that, for the period between Kelly

Devine stepping down in July 2024 and William Reeve stepping

down in November 2024, we will briefly fall below this target.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Nomination Committee report continued

Group

We have strong representation of women at a

senior leadership level. As at 29 June 2024, 50%

of our Executive Team (FY23:62%) and 38% of

our senior leadership¹ roles (FY23:47%) were

held by women.

Dunelm published its seventh Gender Pay report

in April 2024 and an overview is provided in our

Sustainability Report 2024. Both documents are

available to download at corporate.dunelm.com.

Following the recommendation of the Parker

Review to set targets for ethnic minority

representation across senior leadership teams,

we have set an ethnic diversity target of 8% of

our senior leadership¹ to achieve by FY27. This

sits alongside the ethnic diversity target of 8% of

role-model leaders

by the end of FY26 that was

included in last year’s LTIP grant (see page 116

of the 2023 Annual Report and Account for

more details). At year-end FY24, ethnic minority

representation was 2.9% (FY23: 2.6%) for

senior leadership and 5.5% (FY23: 3.7%) for

role-model leaders.

FY24 initiatives and progress

The Committee was updated during the year

on the significant work undertaken in FY24 to

link our diversity and inclusion aims to initiatives

within the business and to our values, purpose

and strategy. This includes raising leadership

awareness through a series of training and

development workshops and supporting all

colleagues more generally in building their

knowledge and understanding by way of a

series of learning modules, collecting and

sharing more data so that we can review and

track from a pay gap perspective and also

enable stores to consider the representation

of their teams versus the local community, to

further develop understanding and engagement.

Other key initiatives have included the launch

of our ‘Reach’ ethnicity talent programme,

designed to support colleagues from under-

represented ethnic groups as they develop their

careers at Dunelm and further focus on our

approach to recruitment.

More information on our diversity and

inclusion initiatives can be found in our

Sustainability Report 2024

Our equality and diversity policy can be found

at: corporate.dunelm.com

1. ‘Senior leadership’ for these purposes means our Executive

Team (including Executive Directors) and members of our

Dunelm leadership team).

2. ‘Role-model leaders’ is a wider definition than ‘senior

leadership’ to reflect leadership roles more broadly across our

colleague base as a national retailer. It includes Heads of roles

and Regional and Store Coaches.

Annual statement on Board diversity targets

Our Board and Executive Team gender and ethnicity data is provided below in accordance with UK

Listing Rule 6.6.6R(9) as at 29 June 2024. Diversity data is collected for Executive Team members via

the engagement survey. At the end of the financial year the Board were asked to confirm the

categories with which they identified.

Gender

Dunelm Group plc

Group Board Executive Team

Number of

Board

members

Percentage

on the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

Executive

Team

Percentage

of Executive

Team

Men 7 58% 2 4 50%

Women 5 42% 2 4 50%

Not specified/prefer not to say — — — — —

Ethnicity

Dunelm Group plc

Group Board Executive Team

Number of

Board

members

Percentage

on the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

Executive

Team

Percentage

of Executive

Team

White British or other white

(including minority-white

groups)

10 83% 4 8 100%

Mixed/Multiple ethnic groups — — — — —

Asian/Asian British 2 17% — — —

Black/African/Caribbean/

Black British

— — — — —

Other ethnic group including

Arab

— — — — —

Not specified/prefer not to say — — — — —

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Audit, risk and

internal control

Audit and Risk Committee report

On behalf of the Audit and Risk Committee

(‘Committee’) I am pleased to present the

Audit and Risk Committee report for the year

ended 29 June 2024. This report provides an

overview of the Committee’s main activities

during FY24, the highlights of which I have set

out below.

FY24 highlights/key activities

• Reviewed the financial judgements made

during the year.

• Conducted a review of the Annual Report

and Accounts to confirm that it was fair,

balanced and understandable.

• Continued to monitor the internal controls

framework and its effectiveness.

• Approved the FY24 internal audit plan

and provided oversight of the internal

audit function.

• Continued focus on cyber security and

data protection.

• Ensured a smooth and effective transition

to our new external audit partner.

• Approved move to co-sourcing

arrangement for internal audit.

• Monitored progress and key improvements

in GHG reporting including the adoption of

a Scope 3 recalculation policy.

FY25 priorities

• Support management’s plans to meet the

requirements of the Corporate Governance

Code 2024 and continue to monitor changes

in regulatory reporting requirements.

• Continue to provide oversight of integration

of new controls systems across the Group.

• Ongoing focus on cyber security and data

protection.

• Support the delivery of the FY25 internal audit

plan in light of the transition to a co-source

arrangement.

Consideration of significant issues

and judgements

The Committee has reviewed and constructively

challenged the accounting methodologies,

judgements and disclosures set out in papers

prepared by management during the year. It

has determined their appropriateness and

assessed for consistency, with input from PwC.

Our review of key judgements and financial

reporting matters (including inventory

provisions, store impairment assessments,

deferred tax and going concern considerations)

made during the year are described on pages

83 and 84 of this report.

Reporting and governance

On behalf of the Board, the Committee

undertook a review of whether the Annual

Report and Accounts 2024, taken as a whole,

was fair, balanced and understandable and

provides the necessary information to

shareholders to assess the Group’s position

and performance, business model and strategy.

This is described in more detail on pages 83

and 84.

Looking externally, we maintained a watching

brief on regulatory and Government

announcements and updates relating to audit

and governance reform and discussed the

impact of the revised Corporate Governance

Code 2024, most notably for this Committee

the requirement for an internal controls

declaration. This will be considered further

over the forthcoming year.

The Committee undertook a detailed review

of its schedule of proposed meetings and

rolling agenda items. This resulted in a new

cadence this year that we felt provided an

improved flow to our discussions, particularly

in relation to internal control and risk reporting.

Sustainability reporting

The Committee has continued to monitor

the ongoing development of management’s

approach to sustainability reporting, both in

respect of current requirements and future

disclosure obligations such as the UK

Sustainability Reporting Requirements. The

Company’s ESG reporting team has refined

and streamlined our processes in this area,

providing greater efficiency and clarity of

reporting for disclosure purposes.

As last year, we can confirm that we are

reporting on all areas of the TCFD framework.

The report can be found on pages 46 to 54.

Ian Bull

Committee membership

Ian Bull (Committee Chair)

Ajay Kavan

William Reeve

Arja Taaveniku

Vijay Talwar

Dan Taylor

See page 63 for meeting attendance

Dunelm Group plc

Annual Report and Accounts 2024

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Audit and Risk Committee report continued

Risk management, internal controls

and internal audit

During the year, the Committee received

regular updates on work to further improve

and strengthen our risk management

processes and internal control environment.

We welcomed the evolution of the Executive-

led Risk and Resilience Committee, which has

provided clearer accountability and increased

visibility and challenge on higher risk aspects

of the Group’s operations for both

management and the Committee.

See pages 39 and 86 for more information

about our Risk and Resilience Committee

Other Committee highlights have included

reviewing progress to standardise key finance

processes as part of our wider finance

transformation programme, its objective

being to support current and future business

growth plans; overseeing implementation

of governance and controls around our

regulated credit offer which launched in

October 2023; and overseeing implementation

of enhancements to our fraud risk framework

in response to the new corporate criminal

offence for failure to prevent fraud. The

Committee also oversaw the development

of our programme to monitor internal

controls over financial reporting and

considered relevant control observations

that were identified.

KPMG, who has been the Group’s internal

auditor since December 2019, delivered the

FY24 internal audit plan (as approved) in full.

This included completion of six internal audits

covering areas such as store audits process,

risk management and supply chain resilience.

More details can be found on page 87.

An important decision for the Committee

this year, which reflects the extent to which

the Group’s internal control framework has

matured, was that we should bring the internal

audit function in-house in FY25, initially by

way of a co-source arrangement, with the

appointment of a head of internal audit.

Engagement

The Committee has been pleased with the

high level of engagement throughout the year,

including with senior colleagues, KPMG

(internal auditor) and PwC (external auditor),

to ensure our processes and controls remain

robust. In particular, I have held regular

meetings with Gill Hinks, our new external

audit partner at PwC, as well as with our

KPMG lead internal audit partner.

It has again been a busy year, and I would

like to take this opportunity to recognise the

valuable input and support provided by

members of the Committee, Executive Team

and senior leadership and thank them for their

constructive engagement. I would be happy

to answer any shareholder questions on the

activities of the Committee at the AGM.

Ian Bull

Chair of the Audit and Risk Committee

11 September 2024

Committee composition and governance

The Committee comprises solely independent

Non-Executive Directors, and did so

throughout FY24. The Board is satisfied that

they demonstrate a breadth of knowledge

and experience, including sector expertise, to

enable the Committee to fulfil its duties. Both

Ian Bull and Vijay Talwar are considered by the

Board to have recent and relevant financial

experience and to be competent in auditing

and accounting. Ian, who has chaired the

Committee since joining the Board in 2019,

is a Fellow of the Chartered Institute of

Management Accountants with over 30 years’

business and financial experience in leading

consumer-facing businesses. Vijay, who joined

the Committee in October 2021, is a former

Certified Public Accountant.

Only members of the Committee have the

right to attend meetings. Other Board

Directors, as well as the Group Finance

Director, Chief Technology and Information

Officer, Head of Cyber Security, PwC (external

audit) and KPMG (internal audit) are invited to

attend, as appropriate. The Group General

Counsel and Company Secretary acts as

secretary to the Committee and attends

all meetings.

The Committee met four times in FY24. It has

also met once since the end of the financial

year prior to the signing of this Annual Report.

Meetings are generally scheduled in line with

key times in the Company’s financial reporting

calendar. The Committee maintains a rolling

calendar of items for consideration at each

meeting and reviews and updates it regularly.

The external auditor and the internal auditor

are provided with the opportunity at each

meeting to discuss matters without the

presence of management and, the Committee

Chair meets with the external and internal

audit partners outside of meetings.

Role and principal duties

The Committee’s role is to support the Board

in fulfilling its corporate governance and

reporting obligations as to the effectiveness

of our risk management systems, internal

controls, and financial reporting. Its principal

duties include monitoring, reviewing and

challenging:

• the integrity of the Group’s financial

statements and public announcements

relating to financial performance;

• key accounting policies and judgements;

• the effectiveness of internal controls and the

process for identifying and managing risk;

• statements concerning internal control, risk

management (including the assessment of

principal risks), and the viability statement

and approving them for inclusion in the

annual report;

• the internal audit plan and the role and

effectiveness of the internal audit function

and, ensuring its ability to exercise

independent judgement; and

• the relationship with the external auditor, its

reports, effectiveness and independence.

The Committee’s full terms of reference can

be found at: corporate.dunelm.com

Dunelm Group plc

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Audit and Risk Committee report continued

Key judgements and financial

reporting matters

An important aspect of the Committee’s work is

monitoring the integrity of the annual and interim

reports, including a review of the significant

financial reporting matters and judgements

contained in them prior to recommending them

to the Board for approval.

Key accounting judgements relating to the

financial statements considered by the

Committee during the year under review were:

Provisions for inventory

The Committee discussed in detail the

approach taken by management to provisions

for inventory. Particular attention was given to

reviewing the provision for obsolete, slow-

moving or discontinued inventories including

the utilisation of provisions reported in prior

periods. The external auditor challenged

management’s assumptions on what they

deemed to be the ‘at risk’ inventory lines,

and corroborated this position with the

commercial team. They also challenged the

completeness of such lines concluding that the

relevant provision was consistent with the

evidence obtained. The Committee noted the

work undertaken by both management and

the external auditor, and that there was a high

degree of consistency in the methodology

applied by management, with any updated

inputs based on specific trading experience.

The Committee concurred with management’s

conclusions that the values recorded in the

financial statements are appropriate.

Other accounting matters

The Committee received regular updates on

management’s assessment of impairment

triggers as required under IFRS and it was noted

that only minor charges were appropriate in

FY24. The Committee also noted that there is

no material change in deferred tax assets and

the Group has no uncertain tax provisions.

Going concern and viability statement

The Directors must determine that the

business has adequate resources to continue

in operational existence and can continue to

adopt the ‘going concern’ basis of accounting.

Furthermore, the Directors are required to make

a statement in this Annual Report as to the

longer-term viability of the Company.

The Committee conducted an assessment

based on the Group’s current financial position,

its strategy, the market outlook and its principal

risks. It also considered the Group’s available

facilities, including the revolving credit facility,

which was renegotiated during the year to an

extended limit of £250m and runs until

September 2028, subject to a further one-year

extension. The Committee reviewed financial

models (including downside scenarios over a

three-year period and two reverse stress tests),

taking time to understand and challenge,

where necessary, significant judgements and

assumptions in the modelling, the reverse stress

test models and covenant and liquidity headroom.

The Committee evaluated management’s

work in conducting a robust assessment of

the Company’s longer-term viability. It affirmed

the reasonableness of the assumptions

and considered the appropriateness of

a viability period of three financial years.

It noted that historically viability has been

considered over a five-year period, but

determined that a three-year horizon is

appropriate, aligning with wider strategic

plans and the timeframe for performance

targets. The Committee confirmed this as

part of its recommendation to the Board.

Further to this, the Directors were able to

conclude that it is appropriate to prepare the

financial statements on a going concern basis.

See page 55 for going concern and viability

statements

Fair, balanced and understandable

At the request of the Board, the Committee

considered whether the Annual Report and

Accounts 2024, taken as a whole, is fair, balanced

and understandable, and provides the information

necessary for shareholders to assess the

Company’s position and performance, business

model and strategy.

To form its opinion, the Committee reviewed

the financial statements set out in the

Company’s annual and interim results and

reflected on the information and reporting

received from management and the external

auditor and the discussions that took place

during the year. In carrying out its review, the

Committee had regard to the following:

Fairness and balance

• Is the report open and honest with the whole

story presented and difficulties/challenges

presented alongside successes/opportunities?

• Is the review of business performance in

the narrative reporting consistent with that

used for the financial reporting in the

financial statements?

• Do we provide clear explanations of our

KPIs and is there strong linkage between

our KPIs and our strategy? Are the KPIs

disclosed at an appropriate level based on

the financial reporting?

• Do we show our progress over time and is

there consistency in our metrics, KPIs and

measurements?

• How do the key judgements identified

compare with the risks that PwC plans to

include in its report?

Understandable

• Do we explain our business model, strategy

and accounting policies simply, using precise

and clear language?

• Do we have a consistent tone across the

Annual Report & Accounts?

• Are the important messages highlighted

appropriately throughout the document?

• Are we clearly ‘signposting’ to where

additional information can be found?

• Is the layout clear with good linkage

throughout in a manner that reflects the

whole story?

The Board considered the recommendations

of the Committee and concluded that, taken

as a whole, the 2024 Annual Report and

Accounts is fair, balanced and understandable.

The Board further believes that the 2024 Annual

Report and Accounts provides sufficient clarity

for shareholders to adequately assess our

business model, strategy, financial position

and performance.

Dunelm Group plc

Annual Report and Accounts 2024

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Audit and Risk Committee report continued

Sustainability reporting

The Committee’s role is to gain assurance that

the effects and consequences of climate

change are being adequately reflected in our

financial statements and valuations, that we are

applying appropriate standards and rigour

when reporting progress against our

Greenhouse Gas (‘GHG’) reduction

commitments and fulfilling our mandatory

disclosure obligations.

Throughout FY24 our internal ESG reporting

team has refined and streamlined our GHG

Reporting and Task Force on Climate-related

Financial Disclosures (‘TCFD’) processes.

This dedicated team supports the various

sustainability-related workstreams across the

business and ensures ongoing efficiency and

clarity of reporting for disclosure purposes.

We are reporting for FY24 on carbon emissions

on a ‘spend-based’ basis that is consistent with

our baseline and are in full compliance with the

TCFD recommendations. All GHG

measurement and reporting is in line with the

GHG Protocol.

See pages 46 to 54 for more detailed

information about TCFD and GHG reporting

The Committee is aware that as our

understanding and processes continue to

evolve, there is a need to enable ongoing data

consistency and meaningful comparisons. With

this in mind, during the year, it approved a

baseline recalculation policy, which guides on

when and how to recalculate our baseline year

or update prior year disclosures for Scope 3

emissions. This was not considered necessary

for the year under review.

The Committee will continue to monitor the

Company’s progress against forthcoming

sustainability-related disclosure requirements,

such as the UK Sustainability Reporting

Standards, and consider further developments

in best practice, seeking training/guidance

when required, to ensure that it continues to

effectively oversee our reporting in this area.

To support the Committee in its oversight

management has proposed a progressive

assurance plan around our processes,

governance and data over our material

ESG-related measures.

Corporate and financial reporting

developments

The Committee has considered the impact

of key findings of the FRC’s thematic reviews

of corporate reporting issued during the year,

as well as other matters which have come to its

attention which impact corporate reporting.

The Committee has also reviewed changes

to accounting standards and interpretations

(both those adopted during the year and

future changes for FY25 and beyond). It is

comfortable that these have been adopted

as appropriate and that none have a material

impact on the Company.

Provision 29 of the revised Corporate

Governance Code 2024, which requires the

Board to provide a declaration on the

effectiveness of material controls, will apply to

the Company in FY27. In preparation for this

change, management presented a high-level

roadmap to the Committee that will be

discussed in more detail over the forthcoming

year to ensure that the Group is well-prepared

to meet the new requirement.

Year end review process

The Committee noted the robust year end governance processes that were performed in parallel with the formal process undertaken by the

external auditor, as set out below:

Mar 2024 Apr—Aug 2024 Aug 2024 Aug 2024 Jul—Sep 2024

Discussions begin

with Executive Directors

on plans, developments

and key messaging for

the year.

Work commences

with external advisors on

how best to present

information in a clear and

understandable way.

Project management

undertaken by a team

including the Group GC

and Company Secretary,

Head of FP&A and

Investor Relations, Director

of Communications and

Group Finance Director,

overseen by the CFO.

Wider team reminded

of ‘fair, balanced and

understandable’

requirements.

Internal verification

conducted by the finance

team of non-financial

factual statements, key

performance indicators

and descriptions used

within the narrative.

Engagement with, and

feedback from, external

parties (including

remuneration advisors

and the external auditor)

to enhance the quality

of reporting.

Engagement with the

senior colleagues on

proposed content and

changes.

Opportunities for the

Committee to challenge

management and the

external auditor on the

process and content of

the report before it is

recommended to the Board

for approval.

Process to ensure that any

unfavourable outcomes

have been duly highlighted.

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Audit and Risk Committee report continued

External auditor

The Committee is responsible for overseeing

the relationship with the external auditor,

including recommending to the Board their

appointment, reappointment and removal,

assessing their independence on an ongoing

basis, and approving the statutory audit fees.

Tenure

PwC has been the Group’s external auditor

since 2014. They were reappointed at the

Company’s 2023 AGM in respect of the FY24

audit following a formal tender process. Gill

Hinks replaced Mark Skedgel as the external

audit partner following the conclusion of Mark

Skedgel’s fifth year in FY23 and the 2024

financial year is therefore her first year as lead

audit partner.

The Committee recommended, and the

Board intends to propose, the reappointment

of PwC as the Company’s auditor for FY25.

It believes the independence and objectivity

of the external auditor and the effectiveness

of the audit process are safeguarded and

remain strong.

The Committee considers that the Company

has complied with the Competition and Markets

Authority’s Statutory Audit Services for Large

Companies Market Investigation (Mandatory

Use of Competitive Tender Processes and

Audit Committee Responsibilities) Order 2014

for the financial year under review. There are

no contractual obligations that restrict the

Committee’s choice of external auditor.

The external audit

PwC is engaged to express an opinion on the

financial statements. It reviews the data contained

in the financial statements, discusses with

management the reporting of results and the

financial position of the Company and presents

its findings to the Committee. Where it makes

recommendations in its reports to the

Committee, the Committee reviews them and

agrees with management the manner and

extent to which they should be implemented.

None of the Directors in office at the date of this

report is aware of any relevant information that

has not been made available to PwC and each

Director has taken steps to be aware of all such

information and to ensure it is available to PwC.

PwC did not report any significant deficiencies

in controls nor did it disagree with any of the

Group’s accounting judgements and estimates

in relation to FY24. PwC’s audit report is

published on pages 122 to 127.

Fees paid to PwC for its FY24 audit work were

£359,000 (2023: £327,000).

Audit quality and auditor effectiveness

The Committee is responsible for ensuring audit

quality is maintained, and reviews and challenges

PwC’s proposed external audit plan, including

its scope and materiality, before approval.

It is also the Committee’s responsibility to assess

the effectiveness and independence of the

external audit process. The assessment is

conducted in accordance with a process agreed

with the Committee. It involves seeking the

views of the Committee, as well as those of

colleagues who have regular interactions with

the external auditor and considering them

alongside five Audit Quality Indicators which

have been developed with PwC and are

measured and tracked annually and the FRC’s

Audit Quality Inspection and Supervision report.

The Committee was provided with a summary

of the responses received in respect of the FY23

audit to assist with its considerations. Feedback

was positive, consistent with previous years and

no material concerns were raised. A common

theme, which was discussed with the external

audit partner, was continuing to find ways in which

year end processes can be made even more

efficient, using technology where appropriate.

Having conducted its review, and also

considered the quality of interactions during the

year, the Committee concluded that PwC had

applied appropriately robust challenge and

professional scepticism throughout the audit to

demonstrate independence, that it possessed

the skills and experience required to fulfil its

duties effectively and efficiently, and that the

audit was effective.

The Committee will formally assess PwC’s

performance in relation to the FY24 audit

following its completion. The assessment will

also include a review of the aforementioned Audit

Quality Indicators to ensure that they remain

appropriate in assisting the Committee in its

review of the quality of the audit going forwards.

Safeguarding auditor independence

and objectivity

The Committee recognises the importance of

ensuring that the independence and objectivity

of the external auditor is not impaired through

the provision of non-audit services. We have in

place robust policies on the use of auditors for

non-audit work and the recruitment of former

employees of the external auditor, which can be

found on our website at corporate.dunelm.com.

These include the following:

• fees for non-audit services provided by the

statutory auditor in any year may not exceed

70% of the average fees for the Group

statutory audit in the three previous years;

• the auditor is prohibited from providing

certain non-audit services as set out in our

policy, including almost all tax work, internal

audit, corporate finance, and those that

involve any part in management activities;

• the external auditor may not be engaged to

provide any non-audit services without the

approval of the Committee; and

• time restrictions on employees of the

external auditor involved in our audit joining

the Company.

During the period we paid PwC £50,000 (2023:

£46,000) for their review of the interim financial

statements (a non-audit service). This was

12.22% of the total audit fees, and the three-year

average is 12.26%. No other non-audit services

were provided by the external auditor.

The Committee can confirm that the policies

referred to above were complied with

throughout the year and, in its opinion, the

external auditor remains independent.

Dunelm Group plc

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Audit and Risk Committee report continued

Risk management and internal controls

Risk management

Whilst the Board has overall responsibility for risk

management, it delegates to the Committee

responsibility for assessing the effectiveness of

systems to identify, assess, manage and monitor

financial and non-financial risks.

During the year, the Committee undertook

the following risk management and assurance

activities, which enabled it to maintain oversight

and discuss risks and challenges faced by

the Company:

• reviewed principal risks and the Company’s

formal risk appetite statement ahead of

submission to the Board for approval (for

more information see pages 38 to 45);

• considered and challenged management’s

key risk indicators to ensure that they remain

appropriate and monitored performance

against them;

• received regular reports and updates from

the CFO as chair of the Risk and Resilience

Committee on its activities and on any specific

matters that impacted internal controls

(more information on our Risk and Resilience

Committee can be found on the right);

• received reports from management on

developments and improvements to the

control environment during the year,

including details of an enhanced monitoring

and testing programme for internal controls

over financial reporting;

• reviewed internal and external audit

reports and progress on delivering

management actions;

• received updates on data protection,

anti-bribery, material litigation and

business continuity;

• approved the annual fraud risk assessment

and considered improvements to fraud

monitoring and the actions taken by

management to mitigate (including

consideration of processes management has

in place in readiness for the new corporate

criminal offence of failing to prevent fraud,

which comes into effect at the end of 2024);

• approved a co-source model for internal audit;

• approved a refreshed Whistleblowing policy

and procedure (see page 68 for more

information about our Whistleblowing policy);

• discussed the governance framework and

controls established ahead of the launch of

our regulated credit offer;

• considered the output from a Business Risk

Review conducted by HMRC, the outcome of

which aligned to our risk appetite; and

• noted that a satisfactory insurance

programme is in place.

In addition, there was continued focus on

IT systems and cyber security by way of

presentations to the Committee from the Chief

Technology and Information Officer and Head

of Cyber Security. During the year a maturity

review was undertaken to assess our cyber

controls against ISO27001. It found that

management has made significant progress in

enhancing controls, with several areas of good

practice identified alongside opportunities for

further improvement. The Committee welcomes

the ongoing work in this area, recognising that

our approach to mitigation must continue to

evolve at pace in line with the risk.

The Committee considers that the processes

in place to manage risk by the Board and

management are robust and working effectively.

Internal control framework

Management is responsible for establishing

and maintaining an effective system of internal

controls and the Committee has responsibility

for ensuring the effectiveness of those controls.

The Group has established internal controls

and risk management systems in relation to the

process for preparing consolidated financial

statements. Examples of the controls in

operation include regular balance sheet

reconciliations, monthly analysis and reviews,

technical accounting papers and review and

approval of externally reported financial

information. A status update on the monitoring

programme for internal controls over financial

reporting is provided on a regular basis to the

Committee. The Committee is satisfied as to the

effectiveness of these controls.

We continue to invest in the modernisation of

our key business systems to ensure that we have

the right foundations in place to support our

ambitious strategic growth plans and the

Committee continues to monitor progress.

Risk and Resilience Committee

During FY24, management conducted

a review of the structure and role of the

Risk and Resilience Committee (‘R&R

Committee’), chaired by the CFO, to critically

assess the effectiveness of its format and

composition. As a result of this work, the R&R

Committee has evolved its membership and

scope to ensure balanced representation

from all key functional areas, with clearer

ownership and accountability across

operational as well as principal risks. This has

enabled greater visibility, stronger governance

and increased challenge on higher risk

aspects of the Group’s operations, with

regular updates provided on:

• data protection and information security;

• regulated credit;

• health and safety;

• ethical sourcing;

• store security;

• business conduct (including fraud); and

• outstanding internal audit actions.

The Audit and Risk Committee receives

regular updates on the R&R Committee’s

activities and is informed of any material

issues or concerns. As part of our continued

focus on improving our control environment,

we will assess the effectiveness of the new

format after twelve months.

See pages 38 to 39 for more information

about our approach to risk management

Dunelm Group plc

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Audit and Risk Committee report continued

Internal audits

The internal audit function provides

independent and objective assurance to all

levels of management up to the Board. Its

responsibilities include evaluating and reporting

on the adequacy and effectiveness of the

systems of risk management and internal

controls. The function has been outsourced

to KPMG since December 2019.

KPMG’s purpose, scope and authority are

defined within its charter which is approved by

the Committee annually. The team develops an

internal audit plan for the year, with input from

management, that is structured to align with

the Group’s strategic priorities and key risks and

is approved by the Committee. The plan is

reviewed periodically throughout the year to

confirm it remains relevant.

Each review concludes with a formal report

with graded recommendations, management

responses and actions. These are communicated

to the Committee by KPMG, and rigorously

tracked through to completion. The Committee

as a whole and the Committee Chair each meet

with KPMG without management present on

a regular basis to allow for open discussion.

During the year, the Committee carried out a

review of the effectiveness of the internal audit

function. This was undertaken by way of a

questionnaire, and feedback was sought from

members of the Committee and the senior

leadership team. The Committee concluded

that overall the function continues to operate

effectively, with areas noted for further

consideration being greater collaboration with

management around the timing of audits and

ways to improve communication of progress

during audits and in presenting findings.

Committee effectiveness

The effectiveness of the Committee was

considered as part of this year’s Board

evaluation process, more details of which can

be found on page 78. The review concluded

that the Committee continues to operate

effectively and having considered the findings,

the following actions were agreed for the

forthcoming year:

1. continue to engage with the external lead

audit partner and find ways in which year-end

processes can be made even more efficient;

2. manage and support the internal audit

transition to a co-sourcing arrangement; and

3. maintain focus on non-financial disclosures,

key performance indicators and assurance in

light of regulatory changes.

Internal audits undertaken in FY24

KPMG conducted the following risk-based internal audits in FY24:

Internal audits Overview of scope

Stores audit process Evaluated the design and effectiveness of processes in place

to manage the delivery of the stores audit programme.

Risk management Assessed the maturity of our strategic/enterprise risk

management processes.

Order to cash Assessed the design and effectiveness of controls over the

end-to-end order-to-cash process across our main revenue

streams, including in-store and online sales. This audit also

considered the new complaints process for regulated credit.

Review of ESG processes:

phase 2

Considered processes, controls, and governance relating to

methodology, data collection, and reporting on Scope 3

emissions.

Cloud controls: phase 1 and 2 Assessed the effectiveness of controls relating to the

management of our cloud services, including third-party

service partners, to provide a risk-based assessment of cloud

maturity capabilities.

Supply chain resilience Assessed the risks relating to IT and operational service

providers, specifically in respect of vendor resilience,

dependency and data management.

1. Phase 1 was completed in FY23.

During the year, the Committee reviewed our

approach to internal audit and the outsourced

model, reflecting on how the business has

changed since 2019, and noting in particular

its growth, the increased maturity of our internal

control framework and the potential future

needs of the business. It concluded that a

move to a co-sourced arrangement would

deliver increased capacity to enable higher

levels of assurance going forwards.

The internal audit function will transition to

this new model from the beginning of FY25,

following the appointment of a head of internal

audit. This role reports to the Chair of the Audit

and Risk Committee to ensure independence,

with a dotted line to the CFO.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration at a glance

Remuneration principles

Our remuneration principles guide our approach

to reward, ensuring that it remains aligned with

our vision, values and purpose, and clearly linked to

the successful delivery of our strategic plans, as we

seek to unlock our full potential.

Pay fairly for an

individual’s role and

responsibilities

Aligned to shared

values and ownership

structure

Rewards strong

performance and

sustainable growth

over the long term

Enshrined in

Remuneration Policy

Summary of Executive Remuneration Structure under 2023 Policy

Base Pay

• Median or below

Pension

• Aligned to workforce

average

Benefits

• Median

Variable pay — annual cash

bonus and LTIP

• Maximum opportunity 375%

for CEO and 325% for CFO

Annual cash bonus

• Median

• Up to 150% of salary*

• Linked to performance:

sales, profit, strategic/

personal

• Clawback and malus apply

* Subject to maximum variable pay

opportunity.

Lifetime lock-in

• Two-thirds of bonus and

LTIP outcome retained in

shares for the duration of

employment

Shareholding requirements

• During employment retain

shares worth maximum LTIP

opportunity

• Two-year post-employment

holding requirement

Simple and transparent Consistently applied

throughout business

LTIP

• Upper quartile

• Up to 250% of salary*

• Three-year performance

period

• Two-year retention period

• Mix of performance

conditions

• Clawback and malus apply

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration

Remuneration Committee report

FY24 business performance and incentive

outcomes

Our Executive Team performed well throughout

the year, delivering a solid performance in what

remains a challenging environment for UK

consumers and businesses, and resulting in sales

of £1,706.5m, and profit before tax of £205.4m.

The Committee’s decision-making on the

remuneration outcome for our Executive

Directors has been shaped by this year’s financial

performance, as well as recognition of the

opportunities and challenges for our business

that lie ahead. We remain committed to ensuring

that we reward sustainable, profitable growth

over the longer term on a consistent basis and

aligned with our shared values.

The overall formulaic vesting level for the FY24

annual bonus is 36% of maximum opportunity

for Nick Wilkinson and 37% of maximum

opportunity for Karen Witts. Full details of

performance against FY24 measures and

objectives are set out on pages 103 and 104.

Nick Wilkinson was granted an LTIP award in

October 2021 with vesting subject to

performance conditions assessed over the

three-year period FY22 to FY24. Karen Witts

was granted an award in June 2022 that was

subject to the same performance conditions

assessed over the same three-year period, but

pro-rated to reflect her joining date. These

awards have vested at 58% as set out on

page 105.

The Committee considered whether to use its

discretion to adjust either the bonus outcomes

or the LTIP award outcome. We concluded

that the outcomes of the annual bonus and

LTIP were fair and well-deserved and reflect

both the performance of the business and the

overall stakeholder experience, including the

wider workforce, and therefore no discretion

should be applied.

At least two-thirds of Nick and Karen’s

respective cash bonuses (after payment of

tax and National Insurance contributions)

must be invested in shares and retained in

accordance with our in- and post-employment

shareholding guidelines. Two-thirds of their

vesting LTIP awards (after payment of tax

and National Insurance contributions) must

similarly be retained, and they are, in any

event, subject to a two-year hold on the

full amount.

FY25 remuneration

Our review of salaries for Executive Directors

in FY24 and intended operation of the new

Policy for the financial year ending 28 June

2025 is as follows:

Salary

When considering salary increases, the

Committee was mindful of Director

performance, our remuneration principles as

set out on page 88 and the wider colleague

experience. We also considered feedback on

William Reeve

Committee membership

William Reeve (Committee Chair)

Alison Brittain

Ian Bull

Ajay Kavan

Arja Taaveniku

Vijay Talwar

Dan Taylor

See page 63 for meeting attendance

On behalf of the Remuneration Committee

(‘Committee’) I am pleased to present the

Remuneration Committee report for the year

ended 29 June 2024. This comprises:

• my Annual Statement as Chair of the

Committee (pages 89 to 90);

• the Directors’ Remuneration Policy (‘Policy’)

approved at the 2023 AGM (pages 91 to

100); and

• the Annual Report on Remuneration (pages

101 to 115), describing how the Policy has

been applied for the year ended 29 June

2024 and how we intend to implement the

Policy for FY25.

The Remuneration Committee report

(excluding the Policy) will be subject to an

advisory shareholder vote at the 2024 AGM.

FY24 highlights/key activities

• Reviewed variable pay outcomes.

• Approved revised measures for LTIP grant

and bonus.

• Approved gender pay gap report for

publication.

FY25 priorities

• Ensure smooth transition to our new

Remuneration Committee Chair.

• Review measures proposed for FY25 bonus

and LTIP grant.

• Continue to consider the evolution of our

reward structure in line with our principles.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration Committee report conti nued

Executive pay received from our National

Colleague Voice. Further to this, we reviewed

the salary levels of the Executive Directors and

approved a 2.75% increase in base salary for

each of Nick Wilkinson and Karen Witts in line

with the average percentage increase for

senior colleagues. The median pay award

made to the wider colleague population

was 6.9%.

Variable pay/incentives

We apply a consistent pay structure

throughout the business, with the

remuneration of Executive Directors more

heavily weighted towards variable pay and

share-based incentives than other colleagues

so that a greater part of their pay is linked to

successful delivery of strategy and aligned

with shareholders.

A significant change to our approach for FY25

has been to the measures that we will be

applying to the annual bonus and the LTIP.

In prior years, performance conditions for the

annual bonus have been based on financial

measures (with a 75% weighting) and strategic

and personal targets (with a 25% weighting),

with the LTIP based on an EPS measure

(with an 80% weighting) and ESG measures

(with a 20% weighting). We have changed our

approach for FY25.

Our use of ESG measures for the LTIP over

the last three LTIP cycles has been positive for

Dunelm, and we have benefitted from the

resultant step change. However, we have

become increasingly aware of the challenges

arising from the rebasing and restating of ESG

measures as understanding and capability to

measure progress has evolved. The Committee

has also recognised the extent to which ESG is

now embedded in the business, meaning that

we can continue to drive Dunelm’s sustainability

strategy more effectively by way of annual

targets within bonus objectives, rather than over

a three-year period. Therefore, for FY25, ESG

measures will be moved from the LTIP to the

annual bonus, with a 10% weighting allocated

to specific ESG targets.

We have decided to replace the ESG measures

in the LTIP with a measure based on Total

Shareholder Return (‘TSR’). The introduction

of a TSR-based measure follows discussions

with some of our investors and a detailed review

by the Committee as to the appropriateness of

this measure for Dunelm. The Committee

recognises that a TSR-based measure will

maintain the alignment of the Executive Directors’

interests with those of shareholders, by providing

a direct link to share price performance and

dividends paid. The Committee considers that

returns to shareholders as reflected by a

TSR-based measure will align with Dunelm’s

longer-term prospects, and reward long-term

thinking. The TSR-based measure will be

assessed on a relative basis against the

constituents of the FTSE 350 excluding financial

services companies and investment trusts.

The weightings of the measures are summarised

below (with a small re-weighting of the EPS

measure for the LTIP which is reduced from

80% to 75%), with further information on the

measures and targets set out on page 113. For

the EPS measure, which accounts for three-

quarters of the overall LTIP award, for delivery of

threshold performance the vesting level will be

10%. In line with the Policy approved by

shareholders at the 2023 AGM and in line with

market practice, vesting in respect of the TSR

element (accounting for one quarter of the

overall award) will be 25%, and will require

median performance, with maximum vesting

requiring upper quartile performance.

Annual bonus

Measure Weighting

PBT 50%

Sales 25%

Strategic and personal targets

(including ESG measures)

25%

LTIP

Measure Weighting

EPS 75%

Relative TSR 25%

The targets for the LTIP award expected to be

made in October 2024 are set out on page 113.

Two-thirds of variable pay will continue to be

invested in Dunelm shares, to be held for the

duration of employment.

Non-Executive fees

It is the responsibility of the Board to review

Non-Executive Director fees, and the

responsibility of this Committee to review

Chair fees. The Board considered the former

at its meeting in June 2024, having conducted

a detailed benchmarking exercise and

reflected on the role and contribution of our

Directors, as well as our remuneration

principles. The Board determined that fees

for the Non-Executive Directors had fallen

some way behind the market and our own

remuneration principles and approved

increases as set out on page 114. In relation to

our Chair’s fee, the Committee recommended

an increase of 2.75% (in line with the average

percentage increase for senior colleagues and

below the median pay award made to the

wider colleague population of 6.9%) which

was approved by the Board.

Finally, I will be stepping down on

21 November 2024 following completion of

our 2024 AGM, having completed just over

nine years on the Board. The Company

confirmed on 11 July 2024 that Ajay Kavan will

be replacing me as Chair of this Committee

with effect from the end of the 2024 AGM.

I wish him every success in the role and, noting

that this is my final Remuneration Committee

report, would like to take this opportunity to

thank my fellow Directors for their support and

that of the Executive Team, senior leadership

and all other colleagues with whom I have had

the pleasure of engaging during my tenure.

William Reeve

Chair of the Remuneration Committee

11 September 2024

Dunelm Group plc

Annual Report and Accounts 2024

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Remuneration Committee report conti nued

Our current binding Remuneration Policy was approved by shareholders at the Annual General Meeting on 16 November 2023 with over 99% of votes in favour. We remain confident that it aligns with our

strategic goals, investor sentiment and market practice, as well as our shared values, which include ‘long-term thinking’ and to ‘act like owners’, in keeping with the family origin of the business.

The Committee has ensured that the Policy and practices are consistent with the factors set out in Provision 40 of the UK Corporate Governance Code:

Clarity and Simplicity Predictability

• We operate a simple, sustainable, and transparent remuneration structure.

• Performance targets for variable pay are linked to our strategy.

• Performance requirements are clearly disclosed and transparent and we provide detailed

disclosures of the relevant performance assessments and outcomes for our stakeholders

to consider.

• Engagement is welcomed from stakeholders throughout the year.

• A National Colleague Voice meeting (see pages 22 and 115) is dedicated to providing clarity

to colleagues and inviting discussion on our approach to executive pay.

• The remuneration scenarios for Executive Directors on page 97 indicate the potential values that

may be earned through the remuneration structure.

• Where discretion may be exercised, this is clearly stated in the Policy.

Risk Proportionality

• The Committee is comfortable that the Company’s incentive arrangements do not encourage

inappropriate risk-taking.

• Our Policy includes (i) balanced use of short- and long-term incentives, (ii) the ability for the

Committee to apply discretion and judgement to outcomes, (iii) malus and clawback provisions,

and (iv) the majority of the variable remuneration of the Executive Directors is paid in shares which

are subject to in-employment and post-employment shareholding requirements.

• Our variable pay arrangements include the ability on the part of the Committee to adjust

formulaic vesting outturns so that vesting levels can be aligned with overall performance.

• Shareholding requirements apply both during and after employment to promote alignment with

the longer-term interests of shareholders and longer-term performance.

• Variable pay arrangements include malus and clawback provisions.

• Our Policy is drafted with clear consideration of the need to ensure that total remuneration fairly

reflects performance and enables meaningful and appropriate targets to be set with a significant

proportion linked to long-term shareholder value.

• A significant proportion of the Executive Directors’ remuneration is subject to performance

conditions and awarded in shares to ensure alignment with shareholders’ interests.

Alignment to culture

• The Committee ensures that our incentive structure drives the right behaviours and reinforces the Group’s purpose and shared values.

• Alignment is reflected in the approach to performance measures used in our incentive schemes, for example (i) financial targets under the annual bonus and LTIP are the same for all management,

regardless of seniority, linking everyone’s contribution to a shared Group financial outcome; (ii) strategic targets require our Executive Directors and senior leadership to work together to deliver growth

and value to the benefit of our stakeholders; and (iii) non-financial performance measures continue to focus on ensuring that participants ‘do the right thing’, including delivery of our sustainability strategy.

Directors’ Remuneration Policy 2024

Dunelm Group plc

Annual Report and Accounts 2024

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Remuneration Committee report conti nued

The Policy sets out the structure of remuneration for Directors of the Company. It was approved by

shareholders at the 2023 AGM and is set out in full on pages 92 to 100 of this Report. The illustrative

performance scenarios on page 97 have been updated to reflect the proposed implementation

of the Policy in FY25 as set out on pages 112 to 114 and other changes have been made to reflect

elements of Karen Witts’ recruitment remuneration that are no longer relevant. Sir Will Adderley has

requested that he not be considered for participation in the annual bonus or LTIP.

The full Policy can also be found on our corporate website: corporate.dunelm.com.

Executive Directors

Base Salary

Purpose and link to strategic

objectives

• Fixed remuneration for the role.

• To attract and retain the high calibre talent necessary to

develop and deliver the business strategy.

• Reflects the size and scope of the Executive Director’s

responsibilities.

Operation • Normally paid monthly.

• Base level set in the context of:

— Pay for similar roles in companies of similar size and

complexity in the relevant market.

— Scale and complexity of the role.

• Should comprise a minority of potential remuneration.

Maximum opportunity • Reviewed annually, with percentage increases usually in line

with or below the Group-wide review unless other

circumstances apply, such as:

— A significant change in the size, scale or complexity of the role

or of the Group’s business.

— Development and performance in role (for example, on a

new appointment, base salary might be initially set at a lower

level with the intention of increasing over time).

• The Committee does not consider it to be appropriate to set a

monetary limit on the maximum base salary that may be paid

to an Executive Director within the terms of this Policy.

Performance metrics • None, although performance of the individual is considered

at the annual salary review.

Retirement benefits

Purpose and link to strategic

objectives

• To provide a competitive post-retirement benefit.

• To attract and retain the high calibre talent necessary to

develop and deliver the business strategy.

Operation • Contribution to a defined contribution plan or a cash allowance

in respect of some or all of the contribution that would

otherwise be made to a pension plan.

Maximum opportunity • An amount as a percentage of base salary not exceeding the

maximum rate available to the majority of the wider workforce

(currently 3%).

Performance metrics • None.

Benefits

Purpose and link to strategic

objectives

• To provide a competitive benefits package.

• To attract and retain the high calibre talent necessary to

develop and deliver the business strategy.

Operation • A range of benefits are provided which may include car or

allowance; private health insurance for the individual and their

family; permanent health cover; life assurance; mobile phone;

use of a car and driver in connection with the role or an

appropriate travel allowance; and colleague discount.

• Additional benefits, such as relocation expenses, housing

allowance and school fees may also be provided in certain

circumstances if considered reasonable and appropriate by

the Committee.

• For non-UK Executives (none at present) the Committee

may consider additional allowances in accordance with

standard practice.

Maximum opportunity • The Committee reserves the right to provide such benefits as

it considers necessary to support the strategy of the Group.

• The Committee does not consider it to be appropriate to set

a maximum cost to the Group of benefits to be paid.

Performance metrics • None.

The policy report

Dunelm Group plc

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Remuneration Committee report conti nued

Executive Directors continued

Bonus

Purpose and link to strategic

objectives

• Rewards and incentivises delivery of annual financial, strategic

and personal targets.

Operation • The amount of the bonus earned is determined after the

results for the financial year have been audited, subject to

performance targets having been met. The Committee has

discretion to adjust the bonus payout upwards or downwards

if it considers that the formulaic outturn does not reflect its

assessment of the overall financial or non-financial performance

of the participant or the Group, or is inappropriate in the context

of circumstances that were unexpected or unforeseen at the

start of the relevant year, or is inappropriate for any other reason.

• At least two-thirds of any bonus earned will be either subject to

a requirement that the after-tax amount is invested in Dunelm

shares or will be granted in the form of a share bonus award

on a pre-tax basis. Any shares acquired pursuant to such a

requirement are subject to retention provisions as set out in

the ’Shareholding requirements’ section below.

Maximum opportunity • Maximum opportunity: 150% of base salary per annum.

• The combined annual bonus and LTIP opportunities for any

year may not exceed: (a) 375% of salary in the case of the

Company’s CEO; and (b) 325% of salary in the case of any other

Executive Director.

• Where bonus awards are granted as share awards, dividend

accruals may be made in respect of dividends paid during the

vesting period applicable to an award. Any such dividend

equivalents will ordinarily be paid in shares.

Performance metrics • Stretching performance targets are set each year. Performance

targets for the Executive Directors may be based on financial

objectives and/or strategic objectives and/or personal goals set

by the Committee annually.

• Financial objectives may include, but are not limited to,

budgeted PBT for the financial year.

• The strategic objectives will vary depending on the specific

business priorities in a particular year.

• The Committee will determine the weighting of performance

measures for any year based on specific business priorities for

the year. Ordinarily, at least 50% of the annual bonus for

Executive Directors will be subject to financial objectives.

• Subject to the Committee’s discretion to override formulaic

outturns, for financial measures typically up to 10% of the

maximum opportunity will be earned for threshold performance,

and for on-target performance up to 50% of the maximum

opportunity will be earned, and for exceeding on-target

performance up to 100% of the maximum opportunity will be

earned. Bonuses will typically be earned between threshold

and on-target and between on-target and maximum on a

straight-line basis.

• For strategic measures and personal goals, vesting of the

bonus will be determined by the Committee between 0% and

100% based on its assessment of the extent to which the

relevant metrics or objectives have been met.

• Awards are subject to recovery provisions (malus and clawback)

as set out below.

Dunelm Group plc

Annual Report and Accounts 2024

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Remuneration Committee report conti nued

Executive Directors continued

Long-Term Incentive Plan

Purpose and link to strategic

objectives

• Supports delivery of strategy by requiring the achievement of

appropriate targets and objectives which will normally include

a measure based on EPS.

• Rewards strong financial performance and sustained increase

in shareholder value over the long term.

• Aligns with shareholder interests through the delivery of shares,

with share retention requirements as set out below.

Operation • Awards (which can take the form of a conditional award, nil-cost

option or nominal value option) are made annually, with vesting

subject to performance, usually assessed following the end of a

performance period of three years, followed by a ‘Holding

Period’ of two years. The Holding Period may operate on the

basis of: (i) the award vesting following assessment of

performance but that, other than as regards sales of shares to

cover tax liabilities, shares acquired must be retained until the

end of the Holding Period; or (ii) vesting being deferred until

the end of the Holding Period.

• Shares acquired are then subject to retention provisions as set

out in the ’Shareholding requirements’ section below.

• The Committee has discretion to adjust the LTIP vesting outturn

upwards or downwards if it considers that the formulaic output

does not reflect its assessment of the overall financial or

non-financial performance of the participant or the Group,

or is inappropriate in the context of circumstances that were

unexpected or unforeseen at grant, or is inappropriate for any

other reason.

Maximum opportunity • The maximum award for an Executive Director in respect of any

financial year is an award over shares with a value (as

determined by the Committee) of 250% of salary.

• The combined annual bonus and LTIP opportunities for any

year may not exceed: (i) 375% of salary in the case of the

Company’s CEO; and (ii) 325% of salary in the case of any other

Executive Director.

• Dividend accruals may be made in respect of dividends paid

during the performance period applicable to an award and up

to the vesting date. Payment would only be made in respect of

shares vesting after applying performance criteria. Any such

dividend equivalents will ordinarily be paid in shares.

Performance metrics • The Committee will determine the weighting of performance

measures for any year. For at least 75% of an award, vesting will

be subject to the satisfaction of one or more financial measures,

which will normally include a measure based on EPS. The balance

of the award vesting will be subject to one or more other financial,

strategic, environmental, social or governance measures.

• The Committee considers the targets annually taking into

account a range of factors which will include the Group’s plans,

external forecasts and the overall business environment.

• Subject to the Committee’s discretion to override formulaic

outturns, for financial measures typically up to 10% of an award

will vest for threshold performance (the lowest level of

performance at which awards will vest), rising to up to 50% for

achieving a stretching level of ‘on-target’ performance and to

100% for achieving or exceeding a stretch level of performance.

Vesting between threshold and on target and between

on-target and maximum will typically be on a straight-line basis.

• For strategic, environmental, social or governance measures,

vesting will be determined by the Committee between 0% and

100% based on its assessment of the extent to which the

relevant measures have been met.

• Awards are subject to recovery provisions (malus and clawback)

as set out below.

Dunelm Group plc

Annual Report and Accounts 2024

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Remuneration Committee report conti nued

Executive Directors continued

All employee share plan (Sharesave)

Purpose and link to strategic

objectives

• Promotes share ownership by all eligible colleagues (including

Executive Directors).

Operation • All UK employees with a minimum service requirement are

eligible to join the UK tax qualifying Dunelm Group Savings

Related Share Option Plan (the Sharesave). Employees outside

the UK are eligible to join an equivalent plan which is not

tax qualifying.

• Monthly savings are made over a period of three years (or such

other period as may be permitted by the applicable UK tax

legislation) linked to the grant of an option over Dunelm shares

at a discount of up to 20% to the market price (or such other

amount as permitted by the applicable UK tax legislation) at the

date of invitation to join the plan.

• Invitations are normally issued annually at the discretion of the

Committee, which also has discretion to set the minimum

service requirement, maximum discount, maximum monthly

savings and any other limits within the terms of the plan rules.

Maximum opportunity • Maximum participation limits reflect the limits prescribed by

the applicable UK tax legislation from time to time. Currently

the maximum limit is savings of £500 per month.

Performance metrics • None.

Shareholding requirements

To align the interests of Executive Directors with

those of shareholders and to promote long-

term thinking, the Committee has adopted

shareholding requirements which apply both

during employment and for a period following

employment, as set out below. The Committee

retains the right to waive or relax the retention

requirements in respect of shares acquired

pursuant to annual bonus deferral arrangements

or following the end of the Holding Period

applying to any LTIP award granted after 1 July

2020 if the Executive Director meets the required

level of shareholding during employment.

The Committee also retains the right to waive

or relax any element of the shareholding

requirements in exceptional circumstances,

such as death, divorce, ill health or severe

financial hardship.

Shareholding requirements during

employment

• Executive Directors are expected to make a

personal investment in Dunelm shares on

appointment as an Executive Director (subject

to closed periods).

• Each Executive Director is required to build a

beneficial holding of shares with a value (as a

percentage of salary) equal to the higher of:

(i) their normal annual LTIP grant; and (ii) 200%

of salary. Executive Directors are ordinarily

expected to achieve this holding within five

years from appointment. Shares subject to:

(i) LTIP awards which are exercisable but which

have not been exercised; (ii) LTIP awards for

which the performance assessment has been

carried out but for which vesting is deferred

until the end of the Holding Period; and

(iii) share bonus awards, count towards this

requirement on a net of assumed tax basis.

• Any shares acquired pursuant to required

annual bonus deferral arrangements must be

retained during employment, other than any

shares sold to cover associated tax liabilities.

• Following the end of the Holding Period

applying to any LTIP award granted after

1 July 2020, an Executive Director must retain

at least two-thirds of the shares acquired,

other than any shares sold to cover associated

tax liabilities.

Shareholding requirements following

termination of employment

Following termination of their employment for

any reason, an Executive Director must retain

for two years shares equal to the lower of the

shareholding requirement applicable to them

during employment, and their actual

shareholding on departure. This is a contractual

requirement set out in each Director’s service

contract. The Company also reserves the right

to require share certificates to be lodged in

its custody.

Payment of fixed remuneration in shares

The Company may deliver any element of fixed

remuneration for an Executive Director in shares

rather than in cash or any other form in which

it is usually provided. The number of shares

would be such number as have a value at the

relevant time equal to the value of the fixed

remuneration being delivered in shares.

Dunelm Group plc

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Remuneration Committee report conti nued

Recovery provisions (malus and clawback)

The annual bonus (including any granted as a

share award) and LTIP are subject to recovery

provisions as set out below.

Malus provisions apply which enable the

Committee to determine before the payment of

an annual bonus or the vesting of an LTIP award,

that the bonus opportunity or LTIP award may

be cancelled or reduced.

Clawback provisions apply which enable the

Committee to determine for up to three years

following the payment of a cash bonus or the

assessment of the performance outturn for an

LTIP award, that the amount of the bonus paid

may be recovered and the LTIP or share bonus

award may be cancelled or reduced (if it has

not been exercised) or recovery may be applied

to it (if it has been exercised).

The malus and clawback provisions may be

applied in the event of:

• a material misstatement of any Group

company’s financial results;

• a material error in assessing a performance

condition applicable to the award or in the

information or assumptions on which the

award was granted or vests;

• a material failure of risk management in any

Group company or a relevant business unit;

• serious reputational damage to any Group

company or a relevant business unit;

• serious misconduct or material error on the

part of the participant;

• a material corporate failure as determined by

the Board;

• fraud; or

• any other circumstances which the Committee

in its discretion considers to be similar in their

nature or effect to those set out above.

Salary, pension, benefits and Sharesave options

are not subject to recovery.

Non-Executive Directors

Fees and appropriate benefits

Purpose and link to strategic

objectives

• To attract and retain a high calibre Chair and Non-Executive

Directors by offering competitive fee levels and, where relevant,

appropriate benefits.

Operation • Fees for the Chair are set by the Committee. Fees for

Non-Executive Directors are set by the Board. No Director

participates in any decision relating to their own remuneration.

• The Chair is paid an all-inclusive fee for all Board

responsibilities. The Non-Executive Directors receive a

basic fee, with supplemental fees for additional Board

responsibilities.

• The level of fee reflects the size and complexity of the role and

the time commitment.

• Fees are normally reviewed annually, having regard to a range

of factors, including increases in remuneration across the

Group. In addition, a periodic review is undertaken against

market rates and taking into account time commitment and any

change in size, scale or complexity of the business.

• The Group’s colleague discount is available to the Chair and

Non-Executive Directors. In addition, they may receive benefits

such as travel, accommodation and other reasonable expenses

incurred in the fulfilment of their duties, which may be ‘grossed

up’ to reflect any tax liabilities associated with the benefits.

Additional benefits may be provided where considered

appropriate. The Chair and Non-Executive Directors do not

participate in any incentive scheme.

Maximum opportunity • The maximum to be paid by way of fees to the Non-Executive

Directors is set out in the Company’s Articles of Association as

amended from time to time.

Performance metrics • None.

The Committee may make minor changes to this Policy which do not have a material advantage to

Directors, to aid its operation or implementation without seeking shareholder approval but taking

into account the interests of shareholders.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration Committee report conti nued

Performance measures and how they

are set

The Committee selects performance measures

that it believes are:

• aligned with the Group’s strategic goals and

set, where relevant, taking into account market

consensus and individual broker expectations.

For the LTIP, financial measures will normally

include EPS which the Committee considers

to be the most appropriate measure for

medium-term performance, aligned with our

growth ambitions and continuing to win

market share;

• unambiguous and easy to calculate; and

• transparent to Directors and shareholders.

For both the annual bonus and the LTIP, the

Committee reserves the right to vary or

substitute any performance measure if justified

by the circumstances, for example if there was

a significant transaction.

Performance measures for the annual bonus

for FY25 are set out on page 113. Performance

measures for the LTIP awards proposed to be

granted in respect of FY25 are set out on

pages 113.

Illustrative performance scenarios

At his request, Sir Will Adderley does not

receive any remuneration apart from an annual

salary, car allowance and healthcare benefits.

Therefore, his remuneration has not been

included in the scenarios below.

The following graphs set out what Nick Wilkinson

and Karen Witts, the other Executive Directors

in office at the date of this report, could earn in

FY25 under the following scenarios:

Nick Wilkinson

Remuneration (£’000)

100%

Total

701

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Maximum plus

50% increase

in price of LTIP

shares vesting

MaximumIn line with

expectations

Minimum

39%

Total

1,831

23%

46%

Total

3,055

19%

Total

3,762

37%

25%31%

19%23%38%

Karen Witts

Remuneration (£’000)

100%

Total

540

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Maximum plus

50% increase

in price of LTIP

shares vesting

MaximumIn line with

expectations

Minimum

37%

Total

1,299

21%

46%

Total

2,118

19%

Total

2,604

37%

23%29%

21%25%42%

Minimum

Annual bonus

LTIP

Maximum plus 50% increase

in price of LTIP shares vesting

The following assumptions have been made in respect of the scenarios set out on this page:

Fixed pay (base salary, benefits and pension only)

Base salary

£’000

Benefits

£’000

Pension

£’000

Nick Wilkinson 628 54 19

Karen Witts 485 40 15

Performance level Fixed pay Annual Bonus LTIP

Minimum

(performance

below threshold)

As above Nil Nil

In line with

expectations

As above 45% of bonus opportunity

earned (67.5% of salary for Nick

Wilkinson, 56.25% of salary for

Karen Witts).

50% of the LTIP award vests

(112.5% of salary for Nick

Wilkinson and 100% of salary

for Karen Witts), based on face

value of the award at the date

of grant.

Maximum

performance

As above 100% of bonus opportunity

earned (150% of salary for Nick

Wilkinson, 125% of salary for

Karen Witts).

100% of the LTIP vests (225%

of salary for Nick Wilkinson and

200% of salary for Karen Witts),

based on face value of the

award at the date of grant.

Maximum

performance,

plus share price

increase

As above 100% of bonus opportunity

earned (150% of salary for Nick

Wilkinson, 125% of salary for

Karen Witts).

100% of the LTIP vests (225%

of salary for Nick Wilkinson and

200% of salary for Karen Witts),

plus an increase in the value of

the LTIP of 50% across the

relevant performance period

to reflect possible share price

appreciation.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration Committee report conti nued

Service contracts and loss of

office payments

All of the Executive Directors have service

contracts. The notice period for termination for

Sir Will Adderley is 12 months from either party,

and for Nick Wilkinson and Karen Witts is six

months from either party.

In connection with her joining Dunelm and as

disclosed in the Directors’ Remuneration Report

for the year ended 2 July 2022, Karen Witts is

entitled to an allowance of £1,500 per month to

cover the cost of rent on a property close to

Dunelm’s offices in Leicester and/or other

expenses and travel costs.

If the Company terminates the employment

of an Executive Director it would honour its

contractual commitments. If termination was

with immediate effect, a payment in lieu of notice

may be made. The Committee may apply

mitigation in respect of any termination payment.

Details in relation to the service contracts for

Executive Directors are set out in Table 6 on page

107 of the Annual Report on Remuneration.

Bonus

The Committee has discretion to make a

payment to a ‘good leaver’ (as determined by

the Committee) in respect of any annual bonus.

Any such bonus would normally be pro-rated to

the period of active service during the relevant

financial year. Ordinarily, any bonus would be

subject to deferral into shares in the usual way;

however, the Committee retains discretion not

to apply deferral in appropriate circumstances.

Share bonus awards will lapse on termination

of employment before vesting other than in the

event of death, serious ill health and any other

reason at the discretion of the Committee.

If an award does not lapse, the Committee will

determine whether it vests on termination or at

the ordinary vesting date.

LTIP

If a participant leaves the employment of the

Group, the following provisions apply to awards

granted under the LTIP:

• awards in the form of options that have vested

but have not yet been exercised may be

exercised within six months of cessation of

employment (12 months in the case of death);

• except in the case of dismissal for gross

misconduct, awards which have not yet

vested, but where the performance period

has elapsed, may vest at the relevant vesting

date. The Committee has discretion to vest

the award earlier but would only use this in

exceptional circumstances (such as ill-health).

In the event of death, unless the Board

determines otherwise, vesting will be as soon

as practicable. In the case of an option, the

option must be exercised within six months of

vesting (or 12 months in the case of death), to

the extent that the performance conditions

have been met; and

• if the participant leaves the Group before an

award has vested and before the performance

period has elapsed, the award will usually

lapse. However, if the participant ceases

employment due to ill-health, injury or

disability or if the Committee exercises its

discretion to treat the participant as a ‘good

leaver’, the award will be retained and vest at

the normal vesting date. The Committee has

discretion to vest the award earlier, but would

only use this in exceptional circumstances

(such as ill-health). In the event of death, unless

the Board determines otherwise, vesting will

be as soon as practicable. In the case of an

option, the option may be exercised within

six months of the relevant vesting date (or 12

months in the case of death). Any vesting

would be subject to assessment of the

performance conditions (and the exercise of

any discretion to vary formulaic outturns in line

with the Policy) and, unless the Committee

determined otherwise, a reduction to reflect

the proportion of the performance period that

had elapsed at cessation.

In all cases, LTIP awards would be subject to the

applicable malus and clawback provisions.

Sharesave

If a participant leaves the Group, options

granted under the Sharesave will normally lapse,

but may be exercised within six months from

the cessation of employment due to injury,

disability, retirement, or redundancy (or 12

months in the case of death), or the employing

company leaving the Group or, provided that

the option has been held for at least three years,

cessation for any other reason (apart from

dismissal by the Company).

Non-Executive Directors’ letters

of appointment

Non-Executive Directors have letters of

appointment. The term is for an initial period of

three years with a provision for termination on

one month’s notice from either party, or three

months’ notice from either party in the case of

the Chair. Letters are renewed for up to two

additional three-year terms, and then renewed

annually. The letter of appointment will terminate

without compensation if the Director is not

reappointed at the AGM.

Details in relation to the letters of appointment

are set out in Table 6 on page 107 of the Annual

Report on Remuneration.

Other payments

The Committee reserves the right to make any

other payments in connection with a Director’s

cessation of office or employment where the

payments are made in good faith in discharge

of an existing legal obligation (or by way of

damages for breach of such an obligation) or

by way of settlement of any claim arising in

connection with the cessation of a Director’s

office or employment or for any fees for

outplacement assistance and/or the Director’s

legal and/or professional advice fees in

connection with their cessation of office or

employment. In appropriate circumstances,

the Committee may continue the provision of

certain benefits (for example health insurance)

for a period following cessation.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration Committee report conti nued

Change of control and other

corporate events

Share bonus awards

Share bonus awards will vest on a change of

control or winding up of the Company before

the originally anticipated vesting date.

LTIP

The following provisions apply to awards

made under the Long-Term Incentive Plan in

accordance with the plan rules if there is a

change of control or winding up of the

Company:

• any vested but unexercised options may

be exercised;

• any unvested awards in respect of which the

performance period has ended and to which

the performance condition has been applied

will vest and, in the case of options, may

be exercised;

• any unvested awards in respect of which the

performance period has not ended may vest

and, in the case of options, be exercised at the

discretion of the Committee, subject to any

adjustment to take into account the amount of

time that has elapsed through the performance

period (unless the Committee decides not to

apply a time-based reduction) and the extent

to which any performance criteria have been

met (and the exercise of any discretion to

vary formulaic outturns in line with the Policy

table); and

• the Executive Director may agree that their

awards are ‘rolled over’ into shares of the

acquiring company as an alternative.

If the Company has been, or will be, affected

by any demerger, dividend in specie, special

dividend or other transaction which will

adversely affect the current or future value of

any awards under the LTIP or any share bonus

awards, the plan rules allow the Committee,

acting fairly and reasonably, to determine the

extent to which any awards should vest and the

period within which options may be exercised.

Sharesave

Sharesave options may be exercised within

six months following a change of control or

winding up of the Company, using savings in

the participant’s account at the date of exercise.

The participant may agree that their awards

are ‘rolled over’ into shares of the acquiring

company as an alternative.

Operation of share plans

All discretions available under the Company’s

share plan rules will be available under this

Policy, except where explicitly limited under this

Policy. This includes that:

• the Committee may amend the terms of

awards and options under the Company’s

share plans in accordance with the plan rules

in the event of a variation of Dunelm’s share

capital or a demerger, special dividend or

other similar event or otherwise in accordance

with the rules of those plans; and

• awards may be settled, in whole or in part,

in cash, although the Committee would only

settle an Executive Director’s award in cash in

exceptional circumstances, such as where

there is a regulatory restriction on the delivery

of shares, or in connection with the settlement

of tax liabilities arising in respect of the award.

Executive pay and the pay of

other colleagues

The remuneration principles set out on page

88 are applied consistently to pay throughout

the Group.

Pay for all colleagues is set at a level that is fair

for the role and responsibilities of the individual,

and is designed to attract and retain high

calibre talent that is needed to deliver the

Group’s strategy, without paying too much.

The remuneration of Executive Directors is more

heavily weighted towards variable pay than for

other colleagues, so that a greater part of their

pay is linked to successful delivery of strategy

and aligned with shareholders. They are also

required to build and maintain a shareholding

in the Company as set out above.

The remuneration of colleagues below the

Board (including participation in the LTIP)

reflects the seniority of the role, market practice

and the ability of the individual to influence

Group performance.

All colleagues who have met a minimum service

requirement (usually three months or less) are

encouraged to participate in the Sharesave plan,

which enables them to become shareholders

at a discounted rate. Participation is usually

offered annually at the maximum price discount

permitted (currently 20%), at the discretion of

the Committee.

In setting the policy for the Executive Directors’

remuneration, the Committee takes note of the

overall approach to remuneration in the Group.

Although the Committee does not formally

consult with employees when setting the Policy,

details of how it engages with colleagues on

pay are set out on page 115.

Shareholder views

The Board is committed to ongoing engagement

with shareholders in respect of all governance

matters, including executive remuneration.

We consulted with shareholders in relation to

the current Policy including, in particular, our

approach to variable pay and shareholding

requirements for Executive Directors. We were

pleased with the level of engagement from

shareholders and for the support shown for our

proposals, which we finalised having regard to

feedback received.

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration Committee report conti nued

Approach to recruitment remuneration

The Committee will apply the principles set out

below when agreeing a remuneration package

for a new Executive Director (whether an

external candidate or an internal promotion):

• the package must be sufficient to attract and

retain the high calibre talent necessary to

develop and deliver the Group’s strategy;

• no more should be paid than is necessary;

• pension provision will be in line with the Policy

table; and

• the Committee reserves the discretion to

make appropriate remuneration decisions

outside the standard policy to meet the

individual needs of the recruitment provided

the Committee believes the relevant decisions

are in the best interests of the Group.

Circumstances in which the Committee might

apply its discretion to make appropriate

remuneration decisions as referenced

above include:

• where an interim appointment is made on

a short-term basis, including where the Chair

or another Non-Executive Director has to

assume an executive position;

• where employment commences at a time in

the year when it is inappropriate to provide a

bonus or share incentive award as there is

insufficient time to assess performance, the

quantum for the subsequent year might be

increased proportionately instead; and

• where an executive is recruited from a

business or location that offered benefits that

the Committee considers it appropriate to

‘buy out’, or which the Committee considers

it appropriate to offer.

Examples of remuneration decisions that the

Committee may make are set out below:

• it may be appropriate to offer a lower salary

initially, with a series of increases to reach the

desired salary over a period of time, subject

to performance;

• the Committee may also alter the

performance criteria applicable to the initial

annual bonus or LTIP award so that they are

more applicable to the circumstances of

the recruitment;

• an internal candidate would be able to retain

any outstanding variable pay awarded in

respect of their previous role that pays out in

accordance with its terms of grant; and/or

• appropriate costs and support will be

provided if the recruitment requires the

relocation of the individual.

The maximum level of variable pay that could

be awarded to a new Executive Director in the

first year of employment, excluding any buyout

arrangements, would be 375% of salary as set

out in the Policy table. The Committee would

explain the rationale for the remuneration package

in the next Annual Report of the Company.

In addition, on hiring an external candidate the

Committee may make arrangements to buy out

remuneration that the individual has forfeited

on leaving a previous employer. The Committee

will generally seek to structure buyout awards

and payments on a comparable basis to

remuneration arrangements forfeited. These

awards or payments are excluded from the

maximum level of variable pay referred to in

the Policy; however, the Committee’s intention

is that the value awarded or paid would be

no higher than the expected value of the

forfeited arrangements.

In order to implement the arrangements

described, the Committee may rely on the

exemption in UK Listing Rule 9.3.2, which allows

for the grant of share or share option awards to

facilitate, in unusual circumstances, the

recruitment of a Director.

The Committee does not intend to use any

discretion in this section to make a non-

performance-related incentive payment (for

example a ‘golden hello’).

On the appointment of a new Chair the fee will

be set taking into account the experience and

calibre of the individual and pay for similar roles

in companies of similar size and complexity in

the market. The fees for any newly appointed

Non-Executive Director would be set in

accordance with the Policy table on page 96.

No share incentives or performance-related

incentives would be offered.

Legacy remuneration arrangements

The Committee reserves the right to make

remuneration payments and payments for loss

of office (including exercising any discretion

available to it in connection with any such

payment) notwithstanding that they are not in

line with the Policy set out above where the

terms of payments were agreed:

• before the Policy came into effect (provided

that, in the case of any payments agreed on or

after 11 November 2014 they are in line with

any applicable shareholder approved

Directors’ remuneration policy in force at the

time they were agreed or were otherwise

approved by shareholders); or

• at a time when the relevant individual was not

a Director of the Company (or other person to

whom the Policy set out above applies) and, in

the opinion of the Committee, the payment

was not in consideration for the individual

becoming a Director of the Company (or

other such person).

For these purposes, ‘payments’ includes the

satisfaction of variable remuneration and, in

relation to an award over shares, the terms of

the payment are ‘agreed’ no later than the time

the award is granted.

100

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration Committee report conti nued

This report has been prepared on behalf of the

Board by the Committee, chaired by William

Reeve. It sets out how the Directors’ Remuneration

Policy which was approved by shareholders on

16 November 2023 has been applied in FY24

and how the policy will be applied in FY25.

Committee members and meeting attendance during FY24

Member Attendance Notes

William Reeve 3/3

Alison Brittain 3/3

Ian Bull 3/3

Kelly Devine 2/2 Kelly stepped down from the Committee on 11 March 2024 and

the Board on 5 July 2024.

Ajay Kavan 1/1 Ajay joined the Board and the Committee on 1 March 2024.

Peter Ruis 2/2 Peter stepped down from the Board and Committee on 10

January 2024.

Arja Taaveniku 3/3

Vijay Talwar 3/3

Dan Taylor 1/1 Dan joined the Board and the Committee on 1 March 2024.

Annual Report on Remuneration

Composition of the Committee

The Committee comprises solely independent

Non-Executive Directors (including the Chair,

who was independent on appointment), and

did so throughout FY24. William Reeve has

chaired the Committee since 2018.

Only members of the Committee have the

right to attend meetings. Other Directors and

individuals such as the CEO and People &

Stores Director are invited to attend all or part

of meetings, as appropriate. No Director

participates when his or her own remuneration

is discussed. The Group General Counsel and

Company Secretary acts as secretary to the

Committee and attends all meetings.

During the year, the Committee met formally

three times with an additional ad hoc meeting

held in May. The Committee has held two

further meetings prior to the publication of

this report.

Role and principal duties

The Committee is responsible for determining

the policy for Directors’ remuneration and

setting the remuneration for the Chair of the

Board, Executive Directors and

members of the Executive Team in accordance

with the Principles and Provisions of the Code.

Its other principal duties include:

• establishing remuneration schemes that

support alignment with long-term

shareholder interests;

• designing remuneration policies and

practices to support strategy and promote

long-term sustainable success;

• reviewing the design of all share incentive

plans for approval by the Board and for any

such plans determine whether awards will be

made each year; and

• reviewing workforce remuneration and

related policies.

The Committee’s full terms of reference can

be found at: corporate.dunelm.com

Together with the Chair’s statement on pages

89 to 90, it will be put to shareholders for an

advisory vote at the FY24 AGM.

The information contained in this report is

unaudited unless expressly stated otherwise.

101

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Remuneration Committee report conti nued

Single figure for total remuneration (audited)

The following table sets out total remuneration for Directors for the period ended 29 June 2024:

Table 1: Directors’ remuneration — single figure table

Salary/fees

£’000

Benefits

£’000

Pension

£’000

Total fixed

remuneration

£’000

LTIP award

£’000

Bonus

£’000

Total Variable

remuneration

£’000

Total

£’000

Director FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23

Nick Wilkinson 609 582 53 48 18 17 680 647 632 964 331 335 963 1,299 1,643 1,946

Karen Witts 471 450 40 38 14 14 525 502 525 — 218 252 743 252 1,268 754

Sir Will Adderley — — 21 20 — — 21 20 — — — — — — 21 20

Sub-total 1,080 1,032 114 106 32 31 1,226 1,169 1,157 964 549 587 1,706 1,551 2,932 2,720

Non-Executive Director

Alison Brittain 337 179 — — — — 337 179 — — — — — — 337 179

Ian Bull 70 67 — — — — 70 67 — — — — — — 70 67

Kelly Devine 58 56 — — — — 58 56 — — — — — — 58 56

Ajay Kavan 20 — — — — — 20 — — — — — — — 20 —

William Reeve 77 73 — — — — 77 73 — — — — — — 77 73

Peter Ruis 31 56 — — — — 31 56 — — — — — — 31 56

Marion Sears 58 56 — — — — 58 56 — — — — — — 58 56

Arja Taaveniku 58 56 — — — — 58 56 — — — — — — 58 56

Vijay Talwar 58 56 — — — — 58 56 — — — — — — 58 56

Dan Taylor 20 — — — — — 20 — — — — — — — 20 —

Total 1,867 1,631 114 106 32 31 2,013 1,768 1,157 964 549 587 1,706 1,551 3,719 3,319

1. Alison Brittain joined the Board on 7 September 2022 and was appointed Chair on 1 January 2023. Ajay Kavan and Dan Taylor were appointed on 1 March 2024 and Peter Ruis stepped down on 10 January 2024. Basic fees for Alison Brittain, Ajay Kavan, Dan Taylor and Peter Ruis have

been pro-rated over the relevant year as appropriate. Sir Will Adderley’s base salary was held at £1 per annum. The salary for the Executive Directors increased by 5% and the fees for the Chair and other Non-Executive Directors increased by 5% with effect from 1 August 2023.

2. Benefits include the cost of a car allowance and private health insurance for the individual and their family. Nick Wilkinson is also entitled to an allowance of 5% of his annual salary towards the cost of travel from home to Leicester. Karen Witts is entitled to an allowance of £1,500 per

month to cover the cost of rent on a property close to the office in Leicester and travel costs.

3. Pension entitlement is 3% of contractual salary to a defined contribution plan or cash allowance in lieu. For Nick Wilkinson, prior to 1 August 2022 the pension entitlement was 8% of contractual salary. Sir Will Adderley waived his entitlement to a pension from 1 July 2015.

4. Total fixed remuneration includes salary/fees, benefits and pension.

5. The figure for Nick Wilkinson and Karen Witts is the value of the FY22—24 LTIP award, the three-year performance period for which ended on the last day of the financial period being reported on. The price used to calculate the value of the awards, which will vest on 20 October 2024

for Nick and 9 June 2025 for Karen, was the average of Dunelm’s closing share price over the last three months of FY24, which was 1,056 pence per share. The value of a share when Nick’s award was granted was 1,307p; therefore none of the value of Nick’s award is attributable to an

increase in the share price. The value of a share when Karen’s award was granted was 946p; therefore c.10.4% of the value of Karen’s award attributable to the vesting of the shares over which the award was originally granted is attributable to an increase in the share price. The value

also includes a ’special dividend equivalent’ of 65p per vested share in respect of the special dividend paid on 8 October 2021, 37p per vested share in respect of the special dividend paid on 18 March 2022, 40p per vested share in respect of the special dividend paid on 11 April

2023 and 35p per vested share in respect of the special dividend paid on 9 April 2024. The share price used to calculate the number of shares in Nick and Karen’s ‘special dividend equivalent’ was 1,310p per share in respect of the October 2021 special dividend, 1,127p per share in

respect of the March 2022 special dividend,1,081 per share in respect of the April 2023 special dividend and 1,095p per share in respect of the April 2024 special dividend, in each case being the closing share price the working day before the special dividend date. No discretion was

applied to adjust the performance conditions or outcome of the FY22—24 LTIP for share price appreciation or depreciation or for any other reason. The prior year figures have been updated to reflect the actual closing share price of 1,089p on the day before the vesting date,

compared to last year’s report which was based on the average closing share price over the last three months of FY23. Sir Will Adderley asked not to be considered for an LTIP award.

6. Nick Wilkinson and Karen Witts were awarded an annual performance-related bonus for FY24 with a maximum opportunity of (i) 150% of contractual salary for Nick Wilkinson and (ii) 125% of contractual salary for Karen Witts. The performance conditions which applied to the bonus

were set in September 2023 and are described on pages 103 and 104.

7. Total variable remuneration includes bonus and LTIP awards.

102

Dunelm Group plc

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Remuneration Committee report conti nued

FY24 annual bonus (audited)

Nick Wilkinson was eligible to earn an annual bonus of up to 150% of base salary during the year and Karen Witts was eligible to earn an annual bonus of up to 125% of base salary during the year, in each

case subject to meeting the performance targets set out below and on the following page. Sir Will Adderley asked not to be considered for an annual bonus.

The bonus was based on challenging targets set by the Committee at the start of the financial year, with 75% based on financial targets and 25% based on personal and strategic targets. The ‘Sales ’ and

personal elements of the bonus would only be paid if we achieved the threshold PBT. Information on the targets set and the performance against them is set out in Table 2. Based on performance against

those targets, Nick Wilkinson earned a bonus of £330,859 and Karen Witts earned a bonus of £217,591 as set out in Table 3. The full bonus is paid in cash, with two-thirds of the after-tax amount being

subject to a requirement that it is invested in shares.

Table 2: annual bonus 2024 payout (audited)

Performance measures

% of bonus

opportunity

Threshold

performance

On-target

performance

Maximum

performance

(100%)

FY24 actual

performance

% outcome

for each

measure

Financial measures

— Profit before tax 50% £188.6m £206.6m £227.3m £205.4m 38%

— Sales 25% £1,660m £1,804m £1,894m £1,706m 23%

Non-financial personal and strategic targets

25%

(see page 104 for details)

CEO—47%

CFO—50%

1. Bonus is earned between threshold and on-target and between on-target and maximum on a straight-line basis.

2. For threshold vesting is at 10% of maximum for sales and 5% of maximum for PBT.

3. For on-target, vesting is at 50% of maximum for sales and 40% for on-target for PBT.

Table 3: overall 2024 bonus earned (audited)

Base salary

£’000

Maximum

bonus % of

salary

2024 bonus

outcomes %

of maximum

Overall 2024

bonus

earned

£’000

2024 bonus

outcome %

of salary

Nick Wilkinson 609 150% 36% 331 54%

Karen Witts 471 125% 37% 218 46%

CEO and CFO Non-financial personal and strategic objectives

25% of the bonus opportunity is linked to performance against objectives, both personal and strategic. Payment of this element of the bonus is subject to meeting threshold on the PBT financial metric for

the year (which has been achieved). The targets, which are specific to each of the CEO and CFO, were set by the Committee to reflect personal and strategic priorities for FY24. Assessment against them

(including consideration of relevant KPIs) was considered by the Committee following the end of the financial year, and a bonus outcome determined accordingly.

It was assessed that 47% of the personal and strategic targets had been met by the CEO and 50% of the personal and strategic targets had been met by the CFO. Further details on their respective key

achievements against each objective are set out on the next page.

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CEO and CFO Non-financial personal and strategic objectives (continued)

CEO FY24 performance against personal and strategic objectives — outcome 47% of maximum

opportunity

Objectives Key achievements during FY24

Strategy

c.25% weighting

• Navigated a complex and volatile trading environment to

deliver customer growth, market share gains and meet

margin targets.

• Maintained focus on improving customer experience through

process and technology change.

• Further progress on cost reduction, balanced with prioritisation

of growth drivers.

Organisation capabilities

c.25% weighting

• Supported improvements to tech ways of working, roadmaps

and pace of delivery.

• Continued progress on improving data fluency and insights to

optimise operations, increase productivity and further develop

the customer proposition.

• Maintained focus on delivering our sustainability goals,

including in relation to circular design, manufacturing, and

strengthening governance and communications.

Corporate and investor

relations

c.25% weighting

• Delivered clear investor communications throughout year.

• Continued to develop capability and approach to business

development.

• Hosted successful investor and analyst event, ‘At Home

with Dunelm’.

People

c.25% weighting

• Successfully restructured Executive Team responsibilities and

continued development of ways of working.

• Continued focus on capability building and succession

planning for senior roles.

• Oversaw increased awareness of our inclusion and diversity

programme and its initiatives.

CFO FY24 performance against personal and strategic objectives — outcome 50% of maximum

opportunity

Objectives Key achievements during FY24

Driving business performance

c.25% weighting

• Implemented refreshed operational KPIs to drive

budgeted performance.

• Adapted plans throughout the year to deliver continued

growth in a volatile environment.

• Further progress on cost reduction; role-modelled and

delivered operating cost savings.

• Maintained strong free cash flow performance, allowing

continued investment and shareholder returns in line with

capital allocation policy.

Financial planning and finance

transformation projects

c.25% weighting

• Created financial plans to support monitoring of progress

against the business strategy.

• Continued to develop plans for finance systems development

and modernisation, whilst optimising existing functionality.

• Revolving credit facility successfully refinanced in

December 2023.

Corporate and investor

relations

c.20% weighting

• Continued to develop capability and approach around

business development.

• Delivered clear investor communications throughout year.

• Planned and delivered successful investor and analyst event,

‘At Home with Dunelm’.

Non-financial reporting

c.15% weighting

• Developed understanding, capability and reportable metrics

within the business in relation to non-financial reporting.

• Delivered detailed review of data points published.

• Oversaw implementation of ‘no regrets’ work ahead of the

introduction of new regulatory requirements.

People

c.15% weighting

• Recruited in-house Head of Internal Audit in line with decision

to move to a co-sourced arrangement.

• Continued to support inclusion and diversity initiatives.

• Ongoing focus on structure of finance team, including

development and succession plans.

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LTIP awards granted in respect of performance in FY22—24 (audited)

Nick Wilkinson was granted an LTIP award on 20 October 2021 with vesting subject to performance conditions assessed over the three-year period FY22 to FY24 and Karen Witts was granted a pro-rated

award on 9 June 2022 following her appointment as CFO, which was subject to the same three-year performance period. These awards were subject to performance conditions based on Diluted EPS

(with an 80% weighting) and sustainability measures (with a 20% weighting in aggregate) — the sustainability measures were split into three equal elements with stretching meet/fail targets, rather than

a target range, as discussed in the FY21 Directors’ Remuneration Report. These awards have vested at 58% as set out in the table below.

Sir Will Adderley does not have an LTIP award vesting in respect of performance in FY22 to FY24.

Table 4: LTIP awards due to vest for performance period ended 29 June 2024 (audited)

Performance condition and outturn

Director

Options over

ordinary

granted

FY24 Diluted EPS (80% of opportunity) Sustainability element (20% opportunity)

Vesting

percentage

Vested

Dividend

equivalent

Total

vesting

Threshold

(10%

vesting)

On target

(50%

vesting)

Stretch

(75%

vesting)

Maximum

(100%

vesting)

FY24

outturn

Sustainability

measure 1

(1/3)

Sustainability

measure 2

(1/3)

Sustainability

measure 3

(1/3)

Nick Wilkinson 89,078

66.6p 72.2p 80.9p 88.8p 74.4p

Percentage of own

brand cotton products

which meet our ‘More

Responsibly Sourced

Cotton Standard’

Target: 80%

Not Met

Reduction in plastic

packaging of own

brand products

against FY20 base

Target: 20%

reduction

Met

% of own brand

products for which

we offer an easy to

use take back

service

Target: 50%

Met

58% 52,013 7,873 59,886

Karen Witts 73,979 58% 43,196 6,537 49,733

1. Nick Wilkinson and Karen Witts will also receive additional shares by way of ‘special dividend equivalents’. The number of additional shares to vest for Nick Wilkinson as a result is 7,873 and for Karen is 6,537 — information in relation to the calculation of the number of additional shares

is provided in the footnotes to Table 1 on page 102.

2. The value of this number of shares is included in the single figure for total remuneration for FY24 as set out in Table 1 on page 102, and the basis on which it has been calculated is set out in footnote 5 of Table 1. Vested shares must be retained in accordance with the shareholding

guidelines set out in the Remuneration Policy.

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Awards made to Directors under share incentive schemes in FY24 (audited)

LTIP awards were made on 21 November 2023 to Nick Wilkinson and Karen Witts as set out below:

Table 5: LTIP awards made to Directors during FY24 (audited)

Director Award

Shares under

award¹ Basis of award Face value Performance conditions

Performance period

end date Vesting date

FY26 Diluted EPS (80% of opportunity)

Threshold

10% vesting

On-target (50%

vesting)

Maximum

(100% vesting)

Nick Wilkinson Nil-cost options under LTIP 126,725 225% of salary £1,374,975 78p 83p 100.0p or more 27 June 2026 21 November 2026

Non-financial measures² (20% of opportunity)

ESG metric 1

(one-third)

ESG metric 2

(one-third)

ESG metric 3

(one-third)

Karen Witts Nil-cost options under LTIP 87,096 200% of salary £945,000 As above As above

1. Based on the average closing share price on 16, 17 and 20 November 2023 of 1,085p per share.

2. Three sustainability-based measures, each accounting for a third of this element of the award, on a simple pass or fail basis against target: (i) ESG metric 1 — reduction in Scope 1 greenhouse gas emissions per £m sales (FY26 target: 59.3%); (ii) percentage of own brand cotton

products which meet our ‘More Responsibly Sourced Cotton’ standard (FY26 target: 100%); and (iii) percentage of role model leadership roles filled by ethnic minority colleagues (target FY26: 8%).

All shares vesting (after payment of tax and National Insurance) must be held for two years from the vesting date, and thereafter at least two-thirds of these must be held for the duration of employment.

The Executive Directors are eligible to receive a ‘special dividend equivalent’ in relation to these awards, in respect of a special dividend of 35 pence per share paid on 9 April 2024 and any other special

dividend paid before the awards vest.

Payments to past Directors and for loss of office (audited)

No payments were made to any former Director in the financial year or to any Director in respect of loss of office or the termination of his or her employment.

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Service contracts

In accordance with the Group’s policy, the service contracts of the Executive Directors have no fixed

term. The notice period for termination is 12 months from either party for Sir Will Adderley, and six

months for each of Nick Wilkinson and Karen Witts respectively. Service contracts for the Executive

Directors include a non-compete arrangement. Payments on termination are restricted to a

maximum of the value of base salary and benefits for the notice period. The Committee may apply

mitigation in respect of any termination payment. Copies of the Executive Directors’ service

contracts are available for inspection at the Company’s registered office.

The Non-Executive Directors have letters of appointment for an initial period of three years with

a provision for termination on one month’s notice from either party, or three months’ notice from

either party in the case of Alison Brittain, the Chair.

Table 6: Directors’ service contracts

Executives Start date Expiry of current term Notice period

Nick Wilkinson 1 February 2018 n/a 6 months

Karen Witts 9 June 2022 n/a 6 months

Sir Will Adderley 28 September 2006 n/a 12 months

Non-Executives

Alison Brittain 7 September 2022 7 September 2025 3 months

Ian Bull 10 July 2019 10 July 2025 1 month

Ajay Kavan 1 March 2024 1 March 2027 1 month

William Reeve

1 July 2015 21 November 2024 1 month

Marion Sears

22 July 2004 22 July 2025 1 month

Arja Taaveniku

15 February 2021 15 February 2027 1 month

Vijay Talwar 1 October 2021 1 October 2024 1 month

Dan Taylor 1 March 2024 1 March 2027 1 month

1. William Reeve is stepping down from the Board on 21 November 2024.

2. Marion Sears has served more than nine years on the Board. Her contract is renewed for a one-year term (rather than three), with the

notice period referred to above.

3. Arja Taaveniku is stepping down from the Board on at the end of the 2024 calendar year.

Directors’ shareholdings and share interests

Directors’ share interests

The interests of the Directors and their connected persons in the Company at 1 July 2023 and at

year end, or their date of cessation, if earlier are set out in Table 7. There have been no changes in

the interests of each Director in the period from 30 June 2024 to the date of this report.

Table 7: Shareholdings of Directors and Persons Closely Associated with them (audited)

Executives

At 29 June 2024

1p Ordinary shares

At 1 July 2023

1p Ordinary shares

Nick Wilkinson 428,940 371,330

Karen Witts 33,449 24,918

Sir Will Adderley 76,371,779 76,371,779

Non-Executives

Alison Brittain 37,500 37,500

Ian Bull 11,000 11,000

Kelly Devine

— —

Ajay Kavan

4,921 n/a

William Reeve 22,000 22,000

Peter Ruis

n/a —

Marion Sears 105,000 105,000

Arja Taaveniku 6,000 6,000

Vijay Talwar 9,670 9,670

Dan Taylor

— n/a

1. Ajay Kavan and Dan Taylor joined the Board on 1 March 2024.

2. Peter Ruis stepped down from the Board on 10 January 2024 and Kelly Devine stepped down on 5 July 2024.

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Executive shareholdings (audited)

Executive Directors are subject to a shareholding target which requires them to build a holding of Dunelm shares with a value equal to the higher of their normal LTIP grant and 200% of salary

(measured by reference to share price at the financial year end). Ordinarily, Executive Directors are expected to achieve this holding requirement within five years of appointment.

Nick Wilkinson had substantially exceeded the minimum shareholding requirement within a five-year period from his appointment. At 29 June 2924, Karen Witts had acquired shares with a value of 73%

of salary, such that she is on track to meet the minimum shareholding requirement within the ordinarily expected five-year period. Achievement against this requirement is set out in Table 8 below, other

than in the case of Sir Will Adderley who only receives a salary of £1 per year and for whom the requirement is therefore not relevant.

Table 8: Executive Director shareholdings (audited)

Executive Director

Shareholding

requirement as

a % of salary

Number of shares

owned outright

Value of shareholding as

at 29 June 2024

Shares owned outright as

a % of salary

Nick Wilkinson 225% 428,940 £4,563,922 727%

Karen Witts 200% 33,449 £355,897 73%

1. Based on the closing share price of 1,064p on 29 June 2024 and base salary at 1 August 2024.

2. Karen Witts is 27 months into her five-year period to meet the shareholding requirement. She is on track to meet this requirement.

Table 9: Movements in Directors’ interests in share options during FY24 (audited)

All share awards and options held at the beginning of the financial year and at year end by the Executive Directors who served during the year, together with any movements, are shown below:

Date of award Name of award Type of award

Share options held

at 1 July 2023

Share options

granted during

the year

Share options

vested and

exercised during

the year

Share options

lapsed/cancelled

during the year

Share options at

29 June 2024

End of

performance

period Option price

Nick Wilkinson 21 November 2023 FY24—26 LTIP Nil-cost options — 126,725 — — 126,725 27 June 2026 —

27 October 2022 FY23—25 LTIP

Nil-cost options 139,765 — — — 139,765 28 June 2025 —

20 October 2021 FY22—24 LTIP

Nil-cost options 89,078 — — — 89,078 29 June 2024 —

20 November 2020 FY21—23 LTIP

Nil-cost options 94,846 9,439 88,477

(15,808) — 1 July 2023 —

22 November 2022 FY23 Sharesave Share options 2,698 — — — 2,698 n/a 667p

Karen Witts 21 November 2023 FY24—26 LTIP Nil-cost options — 87,096 — — 87,096 27 June 2026 —

27 October 2022 FY23—25 LTIP

Nil-cost options 108,043 — — — 108,043 28 June 2025 —

9 June 2022 FY22—24 LTIP

Nil-cost options 73,979 — — — 73,979 29 June 2024 —

22 November 2022 FY23 Sharesave Share options 2,698 — — — 2,698 n/a 667p

1. LTIP awards are eligible to receive a ‘special dividend equivalent’ in respect of any special dividend paid during the performance period applicable to the award and up to the date of vesting. Dividend equivalent shares have been included where quantified.

2. During the year Nick Wilkinson exercised 88,477 nil-cost share options with a market value of 1,089p per share equalling a gain of £963,515.

3. Performance conditions in respect of the LTIP awards granted in FY21, FY22 and FY23 are set out in the FY21, FY22 and FY23 Annual Reports respectively.

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Share options and dilution limits

The Committee considers the provisions of the Investment Association’s Guidelines on Executive

Remuneration when determining the number of shares over which share scheme incentive awards

may be made.

As at 29 June 2024 over the last ten-year period options have been granted over 4.0% of the

Company’s issued share capital (adjusted for share issuance and cancellation). The Group does not

hold any shares in an employee benefit trust.

Total shareholder return performance and historic CEO remuneration

The graph below shows the Group’s historic performance over ten years, measured by total

shareholder return, compared with the FTSE 350 General Retail Index and the FTSE 250. The

Committee has chosen these indices for comparison because they generally provide a range of

comparator companies which have similar market capitalisation, which are in the same sector or

face similar market and economic challenges in the long term. We have added the FTSE 350

excluding financial services companies and investment trusts in light of the inclusion of a relative

TSR element for the FY25 LTIP award.

Table 10: Total shareholder return performance graph (rebased to 2 July 2014 = 100)

The shares traded in the range of 967p to 1,191p during the year and stood at 1,064p at 29 June 2024.

Total shareholder return

(Rebased to 100)

100

200

300

400

500

160.2%

79.6%

182.5%

175.0%

Jul 24Jul 14 Jul 15 Jul 16 July 17 Jul 18 Jul 19 Jul 20 Jul 21 Jul 22 Jul 23

Dunelm

FTSE 250

FTSE 350 General Retail

FTSE 350 excluding financial services companies and investment trusts

Factset as of 12 July 2024. Last ten years data on weekly frequency. FTSE 350 General Retail Index includes Dunelm.

Table 11: Historic Chief Executive Officer pay

The table below sets out the prescribed remuneration data for each of the individuals undertaking

the role of Chief Executive Officer during each of the last ten financial years.

CEO single

figure of total

remuneration

£’000

Annual bonus

payment against

maximum

opportunity

Long-term

incentive

vesting rates

against

maximum

opportunity

FY24 Nick Wilkinson 1,643 36.2% 58.4%

FY23 Nick Wilkinson 1,946 46.0% 83.3%

FY22 Nick Wilkinson 2,511 90.0% 100.0%

FY21 Nick Wilkinson 3,756 81.2% 100.0%

FY20 Nick Wilkinson

885 20.0% 19.8%

FY19 Nick Wilkinson 1,365 97.9% n/a

FY18 Nick Wilkinson

308 13.3% n/a

FY18 John Browett

2,3

429 n/a n/a

FY17 John Browett 722 14.0% n/a

FY16 John Browett

489 57.7% n/a

FY16 Sir Will Adderley

10 n/a n/a

FY15 Sir Will Adderley

507 5.0% n/a

FY15 Nick Wharton

110 n/a n/a

1. During the period April to June 2020 inclusive, Nick Wilkinson took a voluntary 90% reduction in base salary.

2. John Browett left the Group on 29 August 2017. He was succeeded by Nick Wilkinson on 1 February 2018. The total figure for John

Browett includes £322,120 in respect of salary and benefits paid for his six-month notice period. The data for each Director for FY18

is pro-rated by time of service as Chief Executive Officer.

3. No LTIP awards vested to John Browett during his tenure.

4. Sir Will Adderley was succeeded by John Browett as Chief Executive Officer on 1 January 2016. The data for each Director for FY16

is pro-rated by time of service as Chief Executive Officer. Sir Will Adderley’s base salary was reduced to £1 on 1 July 2015.

5. Sir Will Adderley was reappointed Chief Executive Officer on 11 September 2014, following the resignation of Nick Wharton on

10 September 2014. The data for each Director for FY15 is pro-rated by time of service as Chief Executive Officer.

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Statement of change in pay

The table below sets out the increase or decrease in total remuneration for each Director compared with other colleagues.

Table 12: Change in Directors’ pay compared with annual change in average employee’s pay

Percentage change in remuneration

between FY23 and FY24

Percentage change in remuneration

between FY22 and FY23

Percentage change in remuneration

between FY21 and FY22

Percentage change in remuneration

between FY20 and FY21

Percentage change in remuneration

between FY19 and FY20

Salary and

fees

Benefits

Short-term

incentive/

Bonus

6,7

Salary and

fees

Benefits

Short-term

incentive/

Bonus

6,7

Salary and

fees

Benefits

Short-term

incentive/

Bonus

6,7

Salary and

fees

Benefits

Short-term

incentive/

Bonus

6,7

Salary and

fees

Benefits

Short-term

incentive/

Bonus

6,7

All colleagues

2,3

7.8% 0.7% 1.8% 7.2% 1.9% (36.6%) 4.9% 0.8% (4.7%) 4.4% 0% 145.4% 3.5% 0% 42.7%

Executives

Nick Wilkinson

4.6% 5.8% (1.1%) 0.3% 0.0% (48.8%) 3.4% (4.3%) 14.6% 1.8% 3.6% 313.0% 2.0% (55.6%) (79.2%)

Karen Witts 4.6% 0.0% (13.6%) 0.0% 0.0% (33.7%) n/a n/a n/a n/a n/a n/a n/a n/a n/a

Sir Will Adderley 0.0% 0.0% — 0.0% 0.0% — 0.0% 0.0% — 0% (4.8%) — 0.0% 0.0% —

Non-Executives

Alison Brittain 4.6% — — n/a — — n/a — — n/a — — n/a — —

Ian Bull 4.9% — — 3.9% — — 2.7% — — 0% — — 2.0% — —

Kelly Devine 4.9% — — 3.9% — — n/a — — n/a — — n/a — —

Ajay Kavan n/a — — n/a — — n/a — — n/a — — n/a — —

William Reeve

4.9% — — 3.9% — — 4.5% — — 8.4% — — 2.2% — —

Peter Ruis

5.3% — — 4.0% — — 3.2% — — 0% — — 2.0% — —

Marion Sears 4.9% — — 4.0% — — 3.2% — — 0% — — 2.0% — —

Arja Taaveniku 4.9% — — 3.7% — — 3.2% — — n/a — — n/a — —

Vijay Talwar 4.9% — — 3.7% — — n/a — — n/a — — n/a — —

Dan Taylor n/a — — n/a — — n/a — — n/a — — n/a — —

1. n/a refers to a nil value in the previous year or an incomplete prior year, meaning that the year-on-year change cannot be calculated.

2. All colleagues’ salary increase is calculated only for colleagues employed for the whole of the financial year.

3. Comparisons have been made against colleague pay across the entire Group as the parent company employs only one person other than the Directors and, accordingly, the percentage change in respect of the remuneration of a single employee is not considered

a meaningful disclosure.

4. Directors’ remuneration is based on contractual salary or fees as appropriate and does not take account of the voluntary salary reductions of 90% of Nick Wilkinson between April and June 2020 inclusive, or the waiver by all other Directors of 100% of their fees for this period.

5. The percentage change in benefits does not take into account the value of medical or critical illness benefits for either the Directors or for the all colleague changes.

6. Short-term incentive percentage has been calculated in relation to only those colleagues eligible to receive a bonus in the period as this is considered a more appropriate comparator group. All colleagues’ short-term incentives include a one-off £250 ‘thank you’ payment to all

colleagues not usually eligible for a bonus in respect of FY20 and the ‘thank you’ payment of between £250 and £350 made to colleagues not usually eligible for a bonus in respect of FY21.

7. The difference between the increase in short-term incentives of the Directors and the ‘all colleagues’ rate reflects the strong performance of the business, and the fact that a higher proportion of the Directors’ pay is performance-related.

8. The decrease in benefits for Nick Wilkinson in FY22 is due to benefits received in lieu of holiday in FY21 which were not received in FY22.

9. The increase in William Reeve’s fee in FY21 is due to the assumption of responsibilities as Senior Independent Director.

10. Peter Ruis stepped down from the Board on 10 January 2024. His FY24 fee has been annualised for the purposes of this calculation.

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CEO pay ratio

There are three permissible methods available to calculate the CEO pay ratio, which are

outlined below:

Option Method

A Determining the total full-term equivalent remuneration for all UK employees.

Rank from low to high.

Identify the colleagues at 25th, 50th and 75th percentiles.

B Identify the colleagues at 25th, 50th and 75th percentiles, using the Gender Pay

Gap Reporting.

C Use a different data set, but calculate in the same way as the Gender Pay

Gap Reporting.

Option A is considered the most statistically accurate method and therefore we have opted for this

method. It requires the pay and benefits of all UK colleagues to be calculated to identify the three

colleagues at the 25th, 50th and 75th percentiles as at 29 June 2024.

Table 13 shows the ratio of actual pay of Nick Wilkinson, CEO, to other colleagues. Full-year pay

data has been used to calculate these ratios and the elements included are based on the CEO

single figure remuneration in Table 1. We have used a 40-hour week in order to consistently

calculate the annual salary for everyone, converting hourly rate of pay into a full-time equivalent

salary, to ensure a direct comparison.

Table 13: CEO pay ratio

Financial year Method

25th

percentile pay

50th

percentile pay

75th

percentile pay

FY24 Option A 73:1 70:1 64:1

FY24 base salary Option A £22,464 £22,798 £24,960

FY24 total pay and benefits Option A £22,464 £23,482 £25,621

FY23 Option A 93:1 87:1 67:1

FY22 Option A 124:1 121:1 112:1

FY21 Option A 204:1 204:1 186:1

FY20 (based on actual remuneration

— including Nick’s 90% pay reduction

during the period April to June 2020) Option A 54:1 47:1 38:1

FY20 (based on contractual

remuneration) Option A 62:1 53:1 43:1

Commentary:

The Committee considered whether the median pay ratio for the year is consistent with the pay,

reward and progression policies for the Company’s UK employees taken as a whole, and concluded

that it is, for the following reasons:

• the pay ratio has reduced compared to the previous year. The main difference is the CEO LTIP

outcome for FY24, which is at c.58% lower than the CEO LTIP outcome for FY23;

• the colleagues at the 25th, 50th and 75th percentiles are hourly-paid colleagues. This reflects that

c.80% of our colleague base are employed in hourly-paid roles;

• the median pay ratio is considered appropriate and consistent with the pay and reward policies

for the Company’s UK employees. Our remuneration strategy is based on paying median to

market for salary, to reward strong performance and focus on long-term value creation. The CEO

remuneration is reflective of this, as his pay has a larger quantum in variable pay; and

• in comparison we pay our hourly-paid colleagues median or above versus the market.

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Relative spend on pay

The table below shows the all employee pay cost, returns to shareholders by way of dividends

(including special dividends) and share buyback for FY24 and FY23.

Table 14: Relative spend on pay

FY24

£’m

FY23

£’m % change

Total spend on pay 237.0 214.3 10.6%

Ordinary dividend to shareholders 86.8 82.6 5.1%

Distributions to shareholders via treasury

share purchase — 7.0 (100%)

Special distributions to shareholders 70.8 80.7 (12.3%)

Total distributions to shareholders 157.6 170.3 (7.5%)

This information is based on the following:

• Total spend on pay — total employee costs excluding car and travel allowances and bonuses from

note 4 on page 139.

• Dividends taken from note 7 on page 140.

Executive Director external board appointments

Nick Wilkinson is a trustee of Rewilding Britain. Karen Witts is a Non-Executive Director of Ipsen

Pharma SA. Sir Will Adderley is a Director of WA Capital Limited.

Advisors

The UK Executive Compensation practice of Deloitte provides general advice on executive

remuneration to the Committee and access to external information and research on market data

and trends. They were appointed by the Committee following a review against other providers in

the market. Deloitte are signatories to the Remuneration Consultants’ Code of Conduct, which

requires their advice to be impartial, and they have confirmed their compliance with the Code to

the Committee.

Total fees paid to Deloitte for advice to the Committee in the year were £18,000 (FY23: £30,150)

which was a mixture of fixed fees and time spent basis, depending on the work conducted. Deloitte

provided other remuneration-related advice to the Company in the year, including in relation to the

operation of its share plans.

Risk Advisory and Consulting teams within Deloitte (outside of its UK Executive Compensation

practice) provided non-remuneration-related consultancy services in the year. In each case, the

appointment of Deloitte was made based on Deloitte’s expertise in the particular area, on an arm’s

length basis and without reference to the fact that Deloitte also provides remuneration advice.

Having considered the fees paid to Deloitte for non-remuneration-related work, the Committee is

satisfied that the remuneration advice that they have received from Deloitte in the year has been

objective and independent.

Statement of implementation of policy in FY25

Base salary and benefits for each of the Executive Directors with effect from 1 August 2024 are set

out in the table below.

Table 15: Executive Directors fixed remuneration

Base salary

Increase in

base salary

YoY Benefits

Increase to

benefits YoY Pension

Change to

pension

contribution

YoY

Nick Wilkinson £627,905 2.75% £53,985 1.6% 18,837 0.0

Karen Witts £485,493 2.75% £40,195 0.0 14,565 0.0

Sir Will Adderley £1 Nil £20,000 Nil Nil n/a

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Remuneration Committee report conti nued

Base salary

The Committee determined that the Executive Directors performed strongly throughout the year,

and this has been reflected in the financial performance of the Group. Further to this, the Committee

approved a 2.75% increase in base salary for each of the CEO and CFO in line with the increases

given to senior colleagues. In making its decision, the Committee took into account the median pay

award made to the wider colleague population of 6.9% and stakeholder considerations, including

the general feedback on Executive pay received from the National Colleague Voice. Sir Will Adderley

has asked that he not be considered for a pay increase.

Pension

The pension entitlement for both Nick Wilkinson and Karen Witts is 3% of base salary, which is in

line with the current workforce average.

FY25 annual bonus

Nick Wilkinson has been awarded a bonus opportunity of up to 150% of salary and Karen Witts has

been awarded a bonus opportunity of up to 125% of base salary. The performance conditions

attached to their respective bonuses are:

• 50% linked to achievement of budget PBT;

• 25% linked to achievement of budget sales; and

• 25% linked to achievement of strategic and personal targets aligned to the Group strategy (15%),

and environmental, social and governance measures (10%).

The budget sales and PBT are set taking into account market consensus and broker expectations.

The actual financial and strategic targets have not been disclosed at this time as they are

commercially sensitive. The targets and an assessment of the extent to which they have been

achieved will be disclosed in next year’s Remuneration Committee report.

The Policy enables bonus vesting levels at up to 10% of maximum at threshold. The FY23 Directors’

Remuneration Report anticipated that for FY25 threshold vesting for each measure would be 10%

of maximum. However, the Committee has decided that for FY25 and in line with the approach for

FY24, threshold vesting will be at 10% of maximum for sales, but remain at 5% of maximum for PBT.

For on-target performance, and as anticipated in the FY23 Directors’ Remuneration Report, vesting

will be at 50% of maximum for each measure.

Nick Wilkinson and Karen Witts have contractually committed that two-thirds of the bonus earned

(after payment of income tax and National Insurance) will be invested in Dunelm shares, to be held

for the duration of employment. This is also in line with our Policy. Shares held on termination of

employment will be retained for up to a minimum of two years as required by the shareholding

requirements set out in the Policy.

Sir Will Adderley has asked that he not be considered for a bonus award.

LTIP FY25—27

In line with our 2023 Remuneration Policy, an award is expected to be made in October 2024 under

the LTIP over shares to the value of 225% of salary to Nick Wilkinson and 200% of salary to Karen

Witts. The award will vest, subject to continued employment, on the third anniversary of the grant

date, to the extent that performance conditions have been met. All of the vested shares (after sales

to cover tax and National Insurance liability on exercise) must be retained for two years after vesting,

after which one-third of these may be sold and the remainder must be retained for the duration of

employment. Shares held on termination of employment will be retained for a minimum of two

years as required by the shareholding requirements set out in the Policy. Our current intention is that

the FY25—27 LTIP awards will be granted in line with our standard approach (with the number of

shares to be awarded based on the average share price for the three business days preceding

grant) and we will review the final outturn to ensure that there have not been any windfall gains. This

is in addition to the performance underpin and review of the final outturn to ensure it is warranted

based on shareholder experience over the performance period.

The performance criteria that apply to the award were set by the Committee in line with the 2023

Remuneration Policy as follows:

Performance measures

Percentage of this element of the FY25—27 award vesting

Nil

Threshold

(10% for

Diluted EPS

and 25% for

Relative TSR)

On-target

(50%)

Maximum

(100%)

FY27 Diluted EPS (75%) Less than

77p

77p 82p 99p

Relative Total Shareholder Return

(25%) Below

median

Median n/a Upper

quartile

1. Performance between each of these percentage thresholds will be calculated on a straight-line basis.

2. Relative Total Shareholder Return versus the constituents of the FTSE 350 excluding Financial Services companies and Investment Trusts,

with a three-month averaging period applied at the start and end of the performance period.

These measures represent a change to previous years, with the introduction of relative total

shareholder return and transition of specific ESG targets to the annual bonus (see page 90).

Relative total shareholder return has been introduced with 25% weighting to align management

and investor experience by way of an external measure of shareholder value as noted in the Chair’s

letter. The LTIP targets themselves were chosen because they are aligned to our strategy and

long-term ambitions.

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Remuneration Committee report conti nued

Sharesave

An invitation will be issued in October 2024 to all eligible employees to apply for options to be

granted under the Sharesave scheme at a 20% discount to the average closing market price of

Dunelm shares on the three dealing days preceding the issue of the invitation. The maximum

monthly savings will be £500 per month. Executive Directors employed at the eligibility date may

apply for Sharesave options, subject to the plan rules.

Non-Executive Directors fees for FY25

Fees for the Non-Executive Directors were increased with effect from 1 August 2024 to the fee

levels set out below:

Table 16: Non-Executive Directors fees

Position

Base fee

Increase in fee

YoY

Chair 347,829 2.75%

Non-Executive Director base fee 61,000 3.9%

Audit and Risk Committee Chair 15,000 32.0%

Remuneration Committee Chair

15,000 32.0%

Senior Independent Director

11,000 52.4%

1. As noted earlier in this report, William Reeve will step down from the Board following the 2024 AGM. He will receive his fee for chairing

the Remuneration Committee and as Senior Independent Director up to the date of the AGM. Thereafter, Ajay Kavan will receive the fee

for chairing the Remuneration Committee and Ian Bull will receive the fee for holding the role of Senior Independent Director (in addition

to fees received for chairing the Audit and Risk Committee).

Statement of shareholder voting at AGM

At the Annual General Meeting on 16 November 2023, the total number of shares in issue with

voting rights (excluding treasury shares) was 201,949,888. Details of voting on remuneration-related

resolutions is set out below:

Resolution

Votes

for

% of

votes cast

Votes

against

% of

votes cast

Votes

withheld

Approve Directors’

Remuneration Report 172,705,866 99.35 1,128,014 0.65 6,187,454 3.06

Approve Directors’

Remuneration Policy 178,045,253 99.12 1,573,989 0.88 402,092 0.20

Gender pay disclosures

Dunelm’s purpose is ‘To help create the joy of truly feeling at home, now and for generations to

come.’ We want everyone to feel that Dunelm is a place for them, and this applies equally for our

colleagues and customers. Diversity, inclusion, and more generally the wellbeing of our colleagues,

are high on our agenda. We want all colleagues to feel they can grow with Dunelm and that they are

welcome. Improving our gender balance remains one of our commitments.

The Committee supports gender pay reporting and the actions taken in the business to drive

gender balance, supporting a culture of inclusion. Dunelm published its seventh Gender Pay Gap

Report in April 2024, and an overview is provided in our Sustainability Report 2024. Both documents

are available to download at corporate.dunelm.com.

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Remuneration Committee report conti nued

Engaging with our colleagues on pay

The National Colleague Voice (‘NCV’) allocated a full meeting in May 2024 to a discussion on pay

and reward. The meeting was well attended by representatives from across the business with a

36%:64% male/female gender split and ethnic minority representation of 29%. The meeting was led

by members of our People Team who were joined by Marion Sears, our designated Non-Executive

Director for colleague matters, and William Reeve, Chair of the Remuneration Committee. It was also

attended by Ajay Kavan who joined the Board and the Remuneration Committee on 1 March 2024

and the Group General Counsel and Company Secretary.

The meeting was arranged in three parts. The first part provided context and background to recent

decisions on pay and reward, discussed the findings from the ‘pulse’ reward survey conducted in

April 2024 and included a presentation on our pensions offer. In the second part of the meeting

attendees separated into breakout groups to discuss feedback from the recent pay review in more

detail. Discussions highlighted the ongoing cost-of-living pressures faced by our hourly colleagues,

particularly in stores and notwithstanding the recent salary increase in April 2024. The final part of

the meeting enabled William Reeve to provide insight into the role of the Remuneration Committee

and how it operates. He explained how the Committee considers strategy, performance and the

external environment when setting Executive remuneration and aligns its decision-making with

our remuneration principles, with a view to ensuring that these principles are applied throughout

the business.

A summary of the discussions, questions and responses was shared with the Board, which

welcomed the openness of the debate and noted management’s desire to find ways to continue

to improve communication as to the benefits that are on offer and act on the feedback received,

including how to offer an even more personalised approach within our Employee Value Proposition.

For more information on the NCV and its other activities during the year see page 22.

Committee effectiveness

The effectiveness of the Committee was considered as part of this year’s Board evaluation process,

more details of which can be found on page 78. The review concluded that the Committee

continues to operate effectively and having considered the findings, it was agreed that particular

areas of focus during the forthcoming year should be:

1. Reflecting on measures used to determine performance, alignment of management incentives;

2. Enabling an effective handover to the new Committee Chair; and

3. Reviewing papers to ensure succinct presentation of information, utilising templates to ensure

ongoing simplicity and consistency.

Approved by the Board on 11 September 2024.

William Reeve

Chair of the Remuneration Committee

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Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Directors’ report

The Directors present their report together with the audited financial

statements for the period ended 29 June 2024.

A final ordinary dividend of 27.5p per share

(2023: 27p per share) is proposed in respect of the

period ended 29 June 2024, to add to a special

dividend of 35p per share paid on 9 April 2024

(2023: 40p per share) and an interim ordinary

dividend of 16p per share paid on 9 April 2024

(2023: 15p per share). The final dividend will be

paid on 26 November 2024 to shareholders on

the register on 1 November 2024.

Treasury and risk management

The Group’s approach to treasury and financial

risk management, including its use of hedging

instruments, is explained in the Principal Risks

and Uncertainties section on page 45 and note

18 of the financial statements.

Stakeholder engagement

Details of how the Directors have engaged with

employees and other stakeholders, and had

regard to the interests of colleagues and the

need to foster the Company’s business

relationships with suppliers, customers and

others and the effect of that regard, including

on the principal decisions taken by the

Company during the financial year, are set out in

stakeholder engagement of the Strategic report

on pages 20 to 24, with complementary

information in the Governance report on pages

72 and 73. Our s.172(1) Companies Act 2006

statement can be found on page 25.

Disclosures that are relevant to the Directors’

report have been incorporated by reference

and can be found elsewhere within the Annual

Report and Accounts as noted below.

Strategic report

The Group’s Strategic report is set out on pages

1 to 55. It contains an indication of likely future

developments in the business of the Company

and the Group.

Corporate governance

Our Governance report on pages 57 to 120

explains how we have applied the Principles set

out in the UK Corporate Governance Code

published in July 2018 (the ‘Code’). Our Code

compliance statement can be found on page 59.

Employee information

Information relating to employees of the Group

is set out in the Nomination Committee report,

with more information in our Sustainability

Report 2024.

The Company is clear in its policy that people

with health conditions, both visible and

non-visible, will have full and fair consideration

for all vacancies. Dunelm continues to

demonstrate its commitment to interviewing

applicants with disabilities who fulfil the

minimum criteria for the role and endeavours to

retain colleagues in roles in the business if they

become disabled during their employment.

Dunelm will actively look to put into place

reasonable adjustments that may be required

by the colleague to allow them to thrive and

belong at Dunelm.

Share incentive schemes in which employees

participate are described in the Remuneration

Committee report on page 99.

Shareholder and voting rights

All members who hold Ordinary Shares are

entitled to attend and vote at the Annual

General Meeting. On a show of hands at a

general meeting every member present in

person shall have one vote and, on a poll, every

member present in person or by proxy shall

have one vote for every Ordinary Share held.

There are no special voting rights attached to

any of the Company’s shares.

Information to be disclosed under UK

Listing Rule (‘UKLR’) 6.6.1R

The majority of the disclosures required under

UKLR 6.6.1R are not applicable to Dunelm.

The table below sets out the location of those

requirements that are applicable:

Applicable sub-paragraph

within UKLR 6.6.1

Disclosure

provision

(pages)

(3) Long-term incentive schemes 105,106,113

(13) A statement made by the

Board that the Company

continues to comply with the

requirements in UKLR 6.2.3R

‘Shareholder

and voting

rights’ below.

Sustainability reporting

For information on the Group’s approach to

environmental, social and governance matters,

see Sustainability on pages 32 and 33, our

TCFD report on pages 46 to 54 which includes

the Streamlined Energy and Carbon Reporting

disclosures, and our standalone Sustainability

Report 2024, available at corporate.dunelm.com.

Results and dividend

The consolidated profit of the Group for the

year after taxation was £151.2m (2023: £151.9m).

The results are discussed in more detail in the

CFO’s review on pages 28 to 31.

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Directors’ report continued

In order to be passed, an ordinary resolution of

the Company must be supported by at least

50% of the votes cast at a shareholders’

meeting, and a special resolution by at least

75% of votes cast.

On 2 October 2006, Jean Adderley, Bill Adderley

and Sir Will Adderley (all shareholders at that

time) entered into a Relationship Agreement

with the Company, pursuant to which each of

Jean Adderley, Bill Adderley and Sir Will

Adderley undertook to the Company that, for

so long as, individually or together, they are

entitled to exercise, or to control the exercise

of, 30% or more of the rights to vote at general

meetings of the Company or they are able to

control the appointment of Directors who are

able to exercise a majority of votes at Board

meetings of the Company, they will:

• conduct all transactions and relationships with

any member of the Group on arm’s length

terms and on a normal commercial basis;

• not take any action which precludes or inhibits

any member of the Group from carrying on its

business independently of Jean Adderley, Bill

Adderley, Sir Will Adderley or their associates

(as defined in the UK Listing Rules);

• not exercise any of their voting rights or other

powers to procure any amendment to the

Articles of Association of the Company which

would be inconsistent with or undermine any

of the provisions of the Relationship Agreement;

• only enter into, amend or terminate any

transaction, agreement or relationship

between themselves or any of their associates

and any member of the Group with the

approval of a majority of the independent

Non-Executive Directors; and

• not carry on (other than through their holding

of securities of the Company) or have any

financial interest (other than a financial interest

in securities which are held for investment

purposes only) in any person who carries on a

business as a homewares retailer, to the extent

that it would be inconsistent with or undermine

any provisions of the Relationship Agreement.

WA Capital Limited and Lady Nadine Adderley,

to whom Sir Will Adderley transferred shares by

way of a gift, subsequently became parties to

the Relationship Agreement.

In July 2014, the Relationship Agreement was

amended so as to comply with amendments to

the UK Listing Rules and the following additional

undertakings were given by the parties:

• no action will be taken that would have the

effect of preventing the Company from

complying with its obligations under the UK

Listing Rules; and

• no resolution will be proposed, or procured to

be proposed, which is intended to, or appears

to be intended to circumvent the proper

application of the UK Listing Rules.

In addition, the Articles of Association of the

Company provide that the election and

re-election of independent Directors must be

conducted in accordance with the election

provisions set out in UKLR 6.2.8R and UKLR 6.2.9R.

The Company confirms that it has complied with

its obligations under the Relationship Agreement

during the financial period under review, and

that so far as it is aware, all other parties to that

agreement have complied with it.

The Company confirms that there are no

contracts of significance between any member

of the Group and any of the parties to the

Relationship Agreement, with the exception of

Sir Will Adderley’s service agreement as a Director

of the Company, the terms of which are outlined

in the Remuneration Committee report.

There are no restrictions on the transfer of

Ordinary Shares in the Company other than

certain restrictions imposed by laws and

regulations (such as insider trading and

marketing requirements relating to closed

periods) and requirements of the UK Listing

Rules whereby Directors and certain employees

of the Company require Board approval to deal

in the Company’s securities.

Change of control

The Company is not party to any significant

agreements which take effect, alter or terminate

solely on a change of control of the Company

following a takeover bid.

There are no agreements between the

Company and its Directors or employees

providing for additional compensation for loss

of office or employment (whether through

resignation, redundancy or otherwise) that

occurs because of a takeover bid.

Details of the rights of employees to exercise

options on a change of control of the Company

are set out in the Remuneration Policy found on

pages 91 to 100 of this report.

Share capital and treasury shares

The Company has only one class of shares,

Ordinary Shares of 1p each. As at 29 June 2024,

its capital comprised 203,426,835 (2023:

203,426,835) fully paid Ordinary Shares of

1p each.

At the 2023 Annual General Meeting,

shareholders renewed the Directors’ authority

to allot shares in the Company. No shares were

allotted during the year. A resolution to renew

the standard authority will be proposed at the

2024 Annual General Meeting.

At 29 June 2024, the Company held 1,226,461

Ordinary Shares in treasury (2023: 1,712,790).

During the year ended 29 June 2024, the

Company did not purchase shares under

a buyback authority.

Since the financial year end, 2,286 Ordinary Shares

have been moved out of treasury to employees

who exercised options under a share incentive

scheme. Details of option exercises by Directors

are set out in the Remuneration Committee

report on page 108.

Further details on the Company’s

share capital are set out in note 21 to the

financial statements

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Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Directors’ report continued

Substantial shareholders

At 29 June 2024, the Company had been notified under the Disclosure and Transparency Rules

(DTR 5) of the following notifiable interests in the Company’s issued share capital. The information

provided below was correct at the date of notification. These holdings are likely to have changed

since the Company was notified; however, notification of any change is not required until the next

notifiable threshold is crossed. Between 29 June 2024 and 11 September 2024 (being the date of

this report) the Company has been notified that JP Morgan Asset Management Holdings Inc now

holds 10,369,851 Ordinary Shares which equates to 5.13% of the issued share capital.

Notifiable interests Ordinary shares

Percentage of

share capital

disclosed Date of notification

Sir Will Adderley

76,371,779 37.8 15 February 2021

Jean Adderley 9,968,500 4.92 7 July 2021

JP Morgan Asset Management Holdings Inc 10,936,894 5.43 11 December 2022

Jupiter Fund Management PLC 10,044,063 4.95 6 January 2022

Royal London Asset Management Limited 9,907,809 4.91 13 July 2018

abrdn plc 9,565,468 4.74 22 March 2018

1. This includes: (i) 1,967,250 Ordinary Shares held by the Stoneygate Trust and 172,750 Ordinary Shares held by the Paddocks

Discretionary Trust, which Sir Will Adderley is deemed to hold a legal interest in by virtue of the fact that he is a trustee of those trusts;

and (ii) 11,000,000 Ordinary Shares held by his wife, Lady Nadine Adderley.

Directors and officers

The Directors of the Company who served on

the Board during the year, together with details

of changes to the Board are set out on page 63.

The biographies of the Directors on the Board

at the date of this report are set out on pages 60

to 62. Details of the interests of the Directors in

shares of the Company can be found in the

Annual Report on Remuneration on page 107.

Power of Directors

The business of the Company is managed by

the Board, which may exercise all the powers of

the Company, subject to the requirements of

the Companies Act, the Articles of Association

of the Company and any special resolution of

the Company. As stated in the Governance

report on pages 64 to 66, the Board has

adopted internal delegations of authority in

accordance with the Code and these set out

matters which are reserved to the Board or

Committees and the powers and duties of

the Chair, the Deputy Chair and the Chief

Executive respectively.

Appointment and removal of Directors

The Articles of Association of the Company

provide that a Director may be appointed

by ordinary resolution of the Company’s

shareholders in a general meeting, or by the

Board so long as the Director stands down and

offers him or herself for election at the next

Annual General Meeting of the Company.

The Board’s policy is that all Directors are

subject to annual re-election and therefore

should stand down and offer themselves for

re-election at each Annual General Meeting.

The Articles also provide that each Director

must stand down and offer him or herself for

re-election by shareholders at the Annual

General Meeting at least every three years.

The Nomination Committee makes

recommendations to the Board on the

appointment and removal of Directors.

Directors may be removed by a special

resolution of shareholders, or by an ordinary

resolution of which special notice has been

given in accordance with the Companies Act

2006. The Articles also provide that the office of

a Director shall be vacated if they are prohibited

by law from being a Director or are declared

bankrupt, and that the Board may resolve that

his or her office be vacated if he or she is of

unsound mind or is absent from Board meetings

without consent for six months or more.

A Director may also resign from the Board.

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Directors’ report continued

Indemnities and insurance

The Company has granted indemnities to each

of its Directors and the Company Secretary to

the extent permitted by law in respect of costs

of defending claims against them and third-

party liabilities. A deed of indemnity in favour of

each of Ajay Kavan and Dan Taylor was entered

into during the year following their appointment

as Non-Executive Directors.

All indemnities, the provisions of which are

deemed to be qualifying third-party indemnity

provisions pursuant to section 234 of the Act,

were in force throughout FY24 (or, in the case of

Ajay Kavan and Dan Taylor from the date of their

respective appointments, and thereafter for the

remainder of FY24) and remain in force as at the

date of this report.

A copy of each indemnity is available for

inspection at the Company’s registered office

during normal business hours and will be

available for inspection at the Company’s

Annual General Meeting.

The Group maintained Directors’ and Officers’

liability insurance cover for its Directors and

officers as permitted under the Company’s

Articles of Association and the Companies Act

2006 throughout the financial year.

Managing conflicts of interest and related

party matters

The Companies Act 2006 allows the board

of a public company to authorise conflicts and

potential conflicts of interest of individual

Directors where the Articles of Association

contain a provision to that effect. The Company’s

Articles of Association give the Board this

authority subject to the following safeguards:

• Directors who have an interest in matters

under discussion at a Board meeting must

declare that interest and abstain from voting;

• only Directors who have no interest in the

matter being considered are able to approve

a conflict of interest and, in taking that

decision, the Directors must act in a way

that they consider, in good faith, would be

most likely to promote the success of the

Company; and

• the Directors are able to impose limits or

conditions when giving authorisation if they

feel this is appropriate.

Directors are required to disclose any actual

or potential conflicts of interests to the Board

immediately when they arise. In addition, a

formal process is undertaken each year when

all Directors confirm to the Board details of any

other directorships and confirm relevant

information in connection with related parties.

Further to the above, the Board believes that it

has effective procedures in place to monitor

and manage conflicts of interest and ensure that

any related party transactions involving Directors

or their connected persons are conducted on

an arm’s length basis.

Donations

The Group does not make any political donations.

Public policy

We are members of the British Retail

Consortium and support relevant campaigning

activity by that body. During the year we have

not taken part in any direct lobbying or public

policy activity.

Articles of Association

The Company’s Articles of Association may only

be amended, or new articles adopted, by a

special resolution of shareholders.

Independent auditors

In accordance with section 489 of the

Companies Act 2006 and the recommendation

of the Audit and Risk Committee, a resolution

will be proposed at the 2024 AGM to reappoint

PricewaterhouseCoopers LLP as the external

auditor of the Group.

Important events since 29 June 2024

There have been no important events affecting the

Company or any subsidiary since 29 June 2024.

Disclaimer

This Directors’ report, the Strategic report

and the financial statements contain certain

forward-looking statements with respect to

the financial condition, results, operations and

business of Dunelm Group plc. These statements

and forecasts involve risk and uncertainty

because they relate to events and depend

upon circumstances that will occur in the future.

There are a number of factors that could cause

actual results or developments to differ materially

from those expressed or implied by these

forward-looking statements and forecasts.

Nothing in this Directors’ report, the Strategic

report or in the financial statements should be

construed as a profit forecast.

This document also contains non-financial

information and data. While reasonable steps

have been taken to ensure that this is correct,

it has not been externally audited or verified

unless specifically stated in this document.

Annual General Meeting

The 2024 Annual General Meeting will be held

at Dunelm Store Support Centre, Watermead

Business Park, Syston, Leicester, Leicestershire,

LE7 1AD on Thursday 21 November 2024

at 11:30am.

A formal notice of meeting, explanatory notes

and a form of proxy will accompany this Annual

Report and financial statements.

This report was reviewed and signed by order

of the Board on 11 September 2024.

Luisa Wright

Company Secretary

11 September 2024

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Statement of Directors’ responsibilities

in respect of the financial statements

The Directors are responsible for preparing the

Annual Report and Accounts 2024 in accordance

with applicable law and regulation.

Company law requires the Directors to prepare

financial statements for each financial year.

Under that law, the Directors have prepared the

Group financial statements in accordance with

UK-adopted international accounting standards

and the parent company financial statements in

accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom

Accounting Standards, comprising FRS 101

‘Reduced Disclosure Framework’), and

applicable law.

Under company law, Directors must not

approve the financial statements unless they are

satisfied that they give a true and fair view of the

state of affairs of the Group and parent

company and of the profit or loss of the Group

for that period. In preparing the financial

statements, the Directors are required to:

• select suitable accounting policies and then

apply them consistently;

• state whether applicable UK-adopted

international accounting standards have been

followed for the Group financial statements

and United Kingdom Accounting Standards,

comprising FRS 101, have been followed for

the parent company financial statements,

subject to any material departures disclosed

and explained in the financial statements;

• make judgements and accounting estimates

that are reasonable and prudent; and

• prepare the financial statements on the going

concern basis unless it is inappropriate to

presume that the Group and parent company

will continue in business.

The Directors are responsible for safeguarding

the assets of the Group and parent company

and hence for taking reasonable steps for the

prevention and detection of fraud and other

irregularities.

The Directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the Group’s and parent

company’s transactions and disclose with

reasonable accuracy at any time the financial

position of the Group and parent company and

enable them to ensure that the financial

statements and the Directors’ Remuneration

Report comply with the Companies Act 2006.

The Directors are responsible for the

maintenance and integrity of the parent

company’s website. Legislation in the United

Kingdom governing the preparation and

dissemination of financial statements may

differ from legislation in other jurisdictions.

Directors’ confirmations

Each of the Directors, whose names and

functions are listed in the Governance report

confirm that, to the best of their knowledge:

• the Group financial statements, which have

been prepared in accordance with UK-

adopted international accounting standards,

give a true and fair view of the assets,

liabilities, financial position and profit of

the Group;

• the parent company financial statements,

which have been prepared in accordance with

United Kingdom Accounting Standards,

comprising FRS 101, give a true and fair view

of the assets, liabilities and financial position

of the parent company; and

• the Strategic report includes a fair review of

the development and performance of the

business and the position of the Group and

parent company, together with a description

of the principal risks and uncertainties that

it faces.

Disclosure of information to the auditor

Each Director in office at the date on which the

Directors’ report is approved confirms that:

• so far as the Directors are aware, there is no

relevant audit information of which the auditor

is unaware; and

• the Directors have taken all the steps that they

ought to have taken as Directors to make

themselves aware of any relevant audit

information and to establish that the auditor

is aware of that information.

Nick Wilkinson

Chief Executive Officer

11 September 2024

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Strategic report Governance report Financial statements Other information

Financial

Statements

122 Independent auditors’ report

128 Consolidated financial statements

151 Parent company financial statements

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Strategic report Governance report Financial statements Other information

121

Independent auditors’ report

to the members of Dunelm Group plc

Report on the audit of the financial statements

Opinion

In our opinion:

• Dunelm Group plc’s group financial statements and parent company financial statements

(the “financial statements”) give a true and fair view of the state of the group’s and of the parent

company’s affairs as at 29 June 2024 and of the group’s profit and the group’s cash flows for the

52 week period then ended;

• the group financial statements have been properly prepared in accordance with UK-adopted

international accounting standards as applied in accordance with the provisions of the

Companies Act 2006;

• the parent company financial statements have been properly prepared in accordance with

United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting

Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and

• the financial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts (the

“Annual Report”), which comprise: the Consolidated Statement of Financial Position and Parent

Company Statement of Financial Position as at 29 June 2024; the Consolidated Income Statement,

Consolidated Statement of Comprehensive Income, Consolidated Statement of Cash Flows,

Consolidated Statement of Changes in Equity and Parent Company Statement of Changes in

Equity for the period then ended; the Consolidated Accounting Policies and Parent Company

Accounting Policies; and the notes to the financial statements.

Our opinion is consistent with our reporting to the Audit and Risk Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”)

and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’

responsibilities for the audit of the financial statements section of our report. We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are

relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical

Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical

responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the

FRC’s Ethical Standard were not provided.

Other than those disclosed in note 3, we have provided no non-audit services to the parent

company or its controlled undertakings in the period under audit.

Our audit approach

Overview

Audit scope

• The group is structured with one segment which comprises a consolidation of the parent

company and eight additional components.

• For the purposes of the group financial statements, we conducted an audit of the complete

financial information of one financially significant component, together with additional

procedures performed centrally including auditing the group consolidation.

• We separately audited the parent company financial statements.

Key audit matters

• Inventory provisions (group)

• Recoverability of investments in subsidiary undertakings (parent)

Materiality

• Overall group materiality: £10,300,000 (2023: £9,635,000) based on 5% of profit before tax.

• Overall parent company materiality: £1,550,000 (2023: £2,300,000) based on 1% of total assets.

• Performance materiality: £7,700,000 (2023: £7,225,000) (group) and £1,150,000 (2023:

£1,725,000) (parent company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material

misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most

significance in the audit of the financial statements of the current period and include the most

significant assessed risks of material misstatement (whether or not due to fraud) identified by the

auditors, including those which had the greatest effect on: the overall audit strategy; the allocation

of resources in the audit; and directing the efforts of the engagement team. These matters, and

any comments we make on the results of our procedures thereon, were addressed in the context

of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do

not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

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The key audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Inventory provisions (group)

Refer to the Audit and Risk Committee Report, the Accounting Policies, Note 3 (Operating Profit)

and Note 13 (Inventories) to the Consolidated Financial Statements. Inventory represents a significant

asset on the Group’s balance sheet and is carried at the lower of cost and net realisable value

(“NRV”). The Group’s accounting policy is to determine a provision based upon: the historic negative

margin of the type of inventory, by ageing category, which is calculated by analysing the historic

sales price compared to the cost of inventory, and applying a percentage provision to each line of

inventory; and a further provision for ‘at risk’ lines where the calculated provision was not considered

to be sufficient.

We tested sales made post period-end to assess whether inventory items were held at the lower

of cost and NRV.

We examined inventory write-offs in the financial period to assess whether they are consistent with

the key assumptions used in the inventory provision model at the year end.

We tested the inputs to the provision calculation, including the classification of inventory and sales

data for each of the ageing categories from the Buying department, which is segregated from the

Finance department.

We tested the average cost of inventory by agreeing a sample of inputs to source documentation

and testing freight and duty costs.

We tested the integrity of the provision model to ensure that it was using the underlying data

correctly and calculating provision amounts accurately.

We challenged management’s assumptions on what they deemed the ‘at risk’ inventory lines were,

and corroborated whether these lines were at risk with the Merchandising team.

We also independently challenged the completeness of the ‘at risk’ lines based on our

understanding of the nature of the group’s inventory lines.

We found that the NRV provision recognised against inventory was consistent with the

evidence obtained.

Recoverability of investments in subsidiary undertakings (parent)

Refer to note 4 (Investments) to the Parent Company Financial Statements. In accordance with IAS 36

(Impairment of assets), the Parent Company’s investments balance of £72.5m (FY23: £68.8m) should

be carried at no more than its recoverable amount, being the higher of fair value less costs to sell

and its value in use. IAS 36 requires an entity to determine whether there are indications that an

impairment loss may have occurred and if so, make a formal estimate of the recoverable amount.

We evaluated whether there are any indications that an impairment loss may have occurred in relation

to the Parent Company’s investments balance with specific consideration given to the following:

• the market capitalisation of the Group is significantly in excess of the investments balance,

noting that substantially all of the market capitalisation is considered to be in relation to one

indirect subsidiary (Dunelm (Soft Furnishings) Ltd) of the Parent Company;

• the trading results of Dunelm (Soft Furnishings) Ltd are not worse than expected and are not

expected to be worse in future periods; and

• there have not been and are not expected to be any significant changes with an adverse impact

in relation to the technological, market, economic or legal environment in which this indirect

subsidiary operates.

We consider management’s conclusion that there are no indicators of impairment to be appropriate.

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Independent auditors’ report continued

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give

an opinion on the financial statements as a whole, taking into account the structure of the group

and the parent company, the accounting processes and controls, and the industry in which they

operate.

The group is structured with one reporting segment which comprises a consolidation of the

parent company and eight additional components.

In establishing the overall approach to the group audit, we identified one component: Dunelm

(Soft Furnishings) Ltd, which, as the sole trading legal entity in the Group, required an audit of its

complete financial information due to its financial significance to the group.

Further specific audit procedures over central functions including the Group consolidation, equity

and taxes were performed.

All audit procedures were performed by the Group Engagement Team. The scoping above gave

us the evidence we needed for our opinion on the group financial statements as a whole.

The Parent Company is comprised of one component which was subject to a full scope audit for

the purposes of the Parent Company financial statements.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the process adopted to

assess the extent of the potential impact of climate risk on the financial statements and to support

the disclosures made within the Annual Report.

Our risk assessment was based on enquiry, as well as the review of Dunelm’s corporate

responsibility reporting and climate related commitments. As detailed in the group accounting

policies, management considers that there is no material risk to the financial statements in respect

of climate change.

We challenged, based on our knowledge of the business, the impact of climate risk on right-of-use

assets and property, plant and equipment, which were considered to be the assets at most risk of

the effects of climate change.

We also considered the consistency of the disclosures in relation to climate change (including the

disclosures in the Task Force on Climate-related Financial Disclosures (TCFD) section) within the

Annual Report with the financial statements and our knowledge obtained from our audit.

Our procedures did not identify any material impact in the context of our audit of the financial

statements as a whole, or our key audit matters for the 52 week period ended 29 June 2024.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine

the scope of our audit and the nature, timing and extent of our audit procedures on the individual

financial statement line items and disclosures and in evaluating the effect of misstatements, both

individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements

as a whole as follows:

Financial statements — group Financial statements — parent company

Overall materiality £10,300,000 (2023: £9,635,000). £1,550,000 (2023: £2,300,000).

How we determined it 5% of profit before tax 1% of total assets

Rationale for benchmark

applied

Profit before tax is the primary

measure used by the

shareholders in assessing the

performance of the group

and is a generally accepted

auditing benchmark.

The parent company does not

trade and therefore total assets

is considered to be the most

appropriate benchmark.

For the component in the scope of our group audit, we allocated a materiality that is less than our

overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically,

we use performance materiality in determining the scope of our audit and the nature and extent

of our testing of account balances, classes of transactions and disclosures, for example in

determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall materiality,

amounting to £7,700,000 (2023: £7,225,000) for the group financial statements and £1,150,000

(2023: £1,725,000) for the parent company financial statements.

In determining the performance materiality, we considered a number of factors — the history of

misstatements, risk assessment and aggregation risk and the effectiveness of controls — and

concluded that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit and Risk Committee that we would report to them misstatements

identified during our audit above £500,000 (group audit) (2023: £480,000) and £75,000 (parent

company audit) (2023: £115,000) as well as misstatements below those amounts that, in our view,

warranted reporting for qualitative reasons.

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Independent auditors’ report continued

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the parent company’s ability to

continue to adopt the going concern basis of accounting included:

• We obtained management’s going concern assessment and ensured that this was consistent

with board approved budgets;

• We have evaluated management’s forecasting accuracy based on historical budgets versus

actual performance;

• We obtained confirmation from lenders of the level of drawn and undrawn revolving credit

facilities and tested the actual and forecast covenant compliance associated with these facilities;

• We considered the mitigating actions available to Dunelm to increase liquidity, if required,

with the key actions being reductions in stock purchases and capex, as well as cessation of

dividends; and

• We assessed the adequacy of the going concern disclosures in the accounting policies.

Based on the work we have performed, we have not identified any material uncertainties relating

to events or conditions that, individually or collectively, may cast significant doubt on the group’s

and the parent company’s ability to continue as a going concern for a period of at least twelve

months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going

concern basis of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a

guarantee as to the group’s and the parent company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance

Code, we have nothing material to add or draw attention to in relation to the directors’ statement

in the financial statements about whether the directors considered it appropriate to adopt the

going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are

described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the

financial statements and our auditors’ report thereon. The directors are responsible for the other

information. Our opinion on the financial statements does not cover the other information and,

accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated

in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the audit, or otherwise appears to be

materially misstated. If we identify an apparent material inconsistency or material misstatement,

we are required to perform procedures to conclude whether there is a material misstatement of

the financial statements or a material misstatement of the other information. If, based on the work

we have performed, we conclude that there is a material misstatement of this other information,

we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors’ Report, we also considered whether the

disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us

also to report certain opinions and matters as described below.

Strategic report and Directors’ Report

In our opinion, based on the work undertaken in the course of the audit, the information given in

the Strategic report and Directors’ Report for the period ended 29 June 2024 is consistent with

the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and parent company and their

environment obtained in the course of the audit, we did not identify any material misstatements

in the Strategic report and Directors’ Report.

Directors’ Remuneration

In our opinion, the part of the Remuneration Committee report to be audited has been properly

prepared in accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern,

longer-term viability and that part of the corporate governance statement relating to the parent

company’s compliance with the provisions of the UK Corporate Governance Code specified for

our review. Our additional responsibilities with respect to the corporate governance statement as

other information are described in the Reporting on other information section of this report.

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Independent auditors’ report continued

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the corporate governance statement, included within the Strategic report and

Governance report is materially consistent with the financial statements and our knowledge

obtained during the audit, and we have nothing material to add or draw attention to in relation to:

• The directors’ confirmation that they have carried out a robust assessment of the emerging and

principal risks;

• The disclosures in the Annual Report that describe those principal risks, what procedures

are in place to identify emerging risks and an explanation of how these are being managed

or mitigated;

• The directors’ statement in the financial statements about whether they considered it

appropriate to adopt the going concern basis of accounting in preparing them, and their

identification of any material uncertainties to the group’s and parent company’s ability to

continue to do so over a period of at least twelve months from the date of approval of the

financial statements;

• The directors’ explanation as to their assessment of the group’s and parent company’s

prospects, the period this assessment covers and why the period is appropriate; and

• The directors’ statement as to whether they have a reasonable expectation that the parent

company will be able to continue in operation and meet its liabilities as they fall due over the

period of its assessment, including any related disclosures drawing attention to any necessary

qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and parent

company was substantially less in scope than an audit and only consisted of making inquiries and

considering the directors’ process supporting their statement; checking that the statement is in

alignment with the relevant provisions of the UK Corporate Governance Code; and considering

whether the statement is consistent with the financial statements and our knowledge and

understanding of the group and parent company and their environment obtained in the course

of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of

the following elements of the corporate governance statement is materially consistent with the

financial statements and our knowledge obtained during the audit:

• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced

and understandable, and provides the information necessary for the members to assess the

group’s and parent company’s position, performance, business model and strategy;

• The section of the Annual Report that describes the review of effectiveness of risk management

and internal control systems; and

• The section of the Annual Report describing the work of the Audit and Risk Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement

relating to the parent company’s compliance with the Code does not properly disclose a departure

from a relevant provision of the Code specified under the Listing Rules for review by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors’ responsibilities in respect of the financial

statements, the directors are responsible for the preparation of the financial statements in

accordance with the applicable framework and for being satisfied that they give a true and fair

view. The directors are also responsible for such internal control as they determine is necessary to

enable the preparation of financial statements that are free from material misstatement, whether

due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and

the parent company’s ability to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of accounting unless the directors

either intend to liquidate the group or the parent company or to cease operations, or have no

realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’

report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a

guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered

material if, individually or in the aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We

design procedures in line with our responsibilities, outlined above, to detect material misstatements

in respect of irregularities, including fraud. The extent to which our procedures are capable of

detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of

non-compliance with laws and regulations related to employment regulations, and we considered

the extent to which non-compliance might have a material effect on the financial statements. We

also considered those laws and regulations that have a direct impact on the financial statements such

as the Companies Act 2006 and taxation. We evaluated management’s incentives and opportunities

for fraudulent manipulation of the financial statements (including the risk of override of controls),

and determined that the principal risks were related to the posting of journals with unexpected

account combinations, which manipulate revenue or profits, and management bias in accounting

estimates and judgements. Audit procedures performed by the engagement team included:

• Discussions with management, internal audit and the Company Secretary, including

consideration of known or suspected instances of non-compliance with laws and regulation

and fraud;

• Assessment of matters reported on the Group’s whistleblowing log;

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• Searches for news articles which would highlight potential non-compliance with laws

and regulations;

• Identifying and testing journal entries, in particular journal entries posted with unusual

account combinations which manipulate revenue or profits; and

• Challenging assumptions and judgements made by management in their significant

accounting estimates and judgements, in particular in relation to inventory provisions

(see related key audit matter).

There are inherent limitations in the audit procedures described above. We are less likely to

become aware of instances of non-compliance with laws and regulations that are not closely

related to events and transactions reflected in the financial statements. Also, the risk of not

detecting a material misstatement due to fraud is higher than the risk of not detecting one

resulting from error, as fraud may involve deliberate concealment by, for example, forgery or

intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances,

possibly using data auditing techniques. However, it typically involves selecting a limited number

of items for testing, rather than testing complete populations. We will often seek to target

particular items for testing based on their size or risk characteristics. In other cases, we will use

audit sampling to enable us to draw a conclusion about the population from which the sample

is selected.

A further description of our responsibilities for the audit of the financial statements is located on

the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the parent company’s

members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for

no other purpose. We do not, in giving these opinions, accept or assume responsibility for any

other purpose or to any other person to whom this report is shown or into whose hands it may

come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the parent company, or returns adequate

for our audit have not been received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• the parent company financial statements and the part of the Remuneration Committee report

to be audited are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit and Risk Committee, we were appointed by the

members on 14 January 2014 to audit the financial statements for the year ended 28 June 2014

and subsequent financial periods. The period of total uninterrupted engagement is eleven years,

covering the years ended 28 June 2014 to 29 June 2024.

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and

Transparency Rules to include these financial statements in an annual financial report prepared

under the structured digital format required by DTR 4.1.15R — 4.1.18R and filed on the National

Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no

assurance over whether the structured digital format annual financial report has been prepared

in accordance with those requirements.

Gillian Hinks

(Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

East Midlands

11 September 2024

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Consolidated Income Statement

For the 52 weeks ended 29 June 2024

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 29 June 2024

		2024	2023
		52 weeks	52 weeks
	Note	£’m	£’m
Revenue	1	1,706.5	1,638.8
Cost of sales		(823.2)	(817.9)
Gross profit		883.3	820.9
Operating costs	2	(670.0)	(622.1)
Operating profit	3	213.3	198.8
Financial income	5	2.0	1.7
Financial expenses	5	(9.9)	(7.8)
Profit before taxation		205.4	192.7
Taxation	6	(54.2)	(40.8)
Profit for the period		151.2	151.9
Earnings per Ordinary Share — basic	8	74.7p	75.2p
Earnings per Ordinary Share — diluted	8	74.4p	75.0p

		2024	2023
		52 weeks	52 weeks
	Note	£’m	£’m
Profit for the period		151.2	151.9
Other comprehensive income/(expense):
Items that may be subsequently reclassified to profit or loss:
Movement in fair value of cash flow hedges	18	0.2	(14.0)
Deferred tax on hedging movements	13	(1.0)	6.6
Other comprehensive Income/(expense) for the period, netof tax		(0.8)	(7.4)
Total comprehensive income for the period		150.4	144.5

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Consolidated Statement of Financial Position

As at 29 June 2024

		29 June	1 July
		2024	2023
	Note	£’m	£’m
Non-current assets
Intangible assets	9	3.8	5.3
Property, plant and equipment	10	173.0	169.9
Right-of-use assets	11	222.9	231.3
Investment property	12	7.5	—
Deferred tax assets	13	1.8	6.9
Derivative financial instruments	18	0.1	—
Total non-current assets		409.1	413.4
Current assets
Inventories	14	223.0	211.0
Trade and other receivables	15	26.2	24.3
Derivative financial instruments	18	0.3	1.8
Cash and cash equivalents	16	23.4	46.3
Total current assets		272.9	283.4
Total assets		682.0	696.8
Current liabilities
Trade and other payables	17	(205.0)	(208.1)
Lease liabilities	11	(52.1)	(53.4)
Current tax liability		(1.5)	(0.2)
Derivative financial instruments	18	(4.9)	(7.9)
Total current liabilities		(263.5)	(269.6)
Non-current liabilities
Bank loans	19	(77.0)	(75.9)
Lease liabilities	11	(197.5)	(204.8)
Provisions	20	(5.5)	(5.9)
Derivative financial instruments	18	(0.6)	(3.1)
Total non-current liabilities		(280.6)	(289.7)
Total liabilities		(544.1)	(559.3)
Net assets		137.9	137.5

		29 June	1 July
		2024	2023
	Note	£’m	£’m
Equity
Issued share capital	21	2.0	2.0
Share premium account		1.7	1.7
Capital redemption reserve		43.2	43.2
Hedging reserve		(3.8)	(6.9)
Retained earnings		94.8	97.5
Total equity attributable to equity holders of the Parent		137.9	137.5

The financial statements on pages 128 to 151 were approved by the Board of Directors on

11 September 2024 and were signed on its behalf by:

Karen Witts

Chief Financial Officer

11 September 2024

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Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Consolidated Statement of Cash Flows

For the 52 weeks ended 29 June 2024

		2024	2023
		52 weeks	52 weeks
	Note	£’m	£’m
Cash flows from operating activities
Profit before taxation		205.4	192.7
Net financial expense	5	7.9	6.1
Operating profit		213.3	198.8
Depreciation and amortisation of property, plant and equipment and intangible assets	3	30.4	29.8
Depreciation of right-of-use assets	3	50.2	49.3
Loss on disposal and impairment of property, plant and equipment and intangible assets	3	0.5	0.3
Impairment of right-of-use assets	3	0.9	—
Share-based payments expense		4.3	4.8
Operating cash flows before movements in working
capital		299.6	283.0
(Increase)/decrease in inventories		(12.0)	12.0
Increase in trade and other receivables		(1.9)	(1.6)
Decrease in trade and other payables		(3.8)	(14.6)
Net movement in working capital		(17.7)	(4.2)
Tax paid		(49.6)	(38.2)
Net cash generated from operating activities		232.3	240.6
Cash flows from investing activities
Acquisition of intangible assets		(2.6)	(0.4)
Acquisition of property, plant and equipment		(29.8)	(21.4)
Acquisition of Investment Property		(7.5)	—
Interest received		1.6	1.1
Net cash used in investing activities		(38.3)	(20.7)

		2024	2023
		52 weeks	52 weeks
	Note	£’m	£’m
Cash flows from financing activities
Proceeds from issue of treasury shares and Ordinary
Shares	22	0.1	2.4
Purchase of treasury shares	22	—	(7.0)
Drawdowns on Revolving Credit Facility		110.0	139.0
Repayments of Revolving Credit Facility		(108.0)	(116.0)
Interest paid and loan transaction costs		(4.9)	(2.2)
Interest paid on lease liabilities	11	(6.1)	(5.3)
Repayment of principal element of lease liabilities		(50.8)	(52.0)
Dividends paid	7	(157.6)	(163.3)
Net cash used in financing activities		(217.3)	(204.4)
Net (decrease)/increase in cash and cash equivalents		(23.3)	15.5
Foreign exchange revaluations	5	0.4	0.6
Cash and cash equivalents at the beginning of the period	16	46.3	30.2
Cash and cash equivalents at the end of the period	16	23.4	46.3

130

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Consolidated Statement of Changes in Equity

For the 52 weeks ended 29 June 2024

							Total equity
							attributable
		Issued	Share	Capital			to equity
		share	premium	redemption	Hedging	Retained	holders of
		capital	account	reserve	reserve	earnings	the Parent
	Note	£’m	£’m	£’m	£’m	£’m	£’m
As at 2 July 2022		2.0	1.7	43.2	20.2	111.2	178.3
Profit for the period		—	—	—	—	151.9	151.9
Movement in fair value of cash flow hedges	18	—	—	—	(14.0)	—	(14.0)
Deferred tax on hedging
movements	13	—	—	—	6.6	—	6.6
Total comprehensive income for the period		—	—	—	(7.4)	151.9	144.5
Proceeds from issue of treasury shares	22	—	—	—	—	2.4	2.4
Purchase of treasury shares	22	—	—	—	—	(7.0)	(7.0)
Share-based payments	23	—	—	—	—	4.8	4.8
Deferred tax on share-based
payments	13	—	—	—	—	(3.1)	(3.1)
Current tax on share options
exercised		—	—	—	—	0.6	0.6
Movement on cash flow
hedges transferred to inventory	18	—	—	—	(19.7)	—	(19.7)
Ordinary dividends paid	7	—	—	—	—	(163.3)	(163.3)
Total transactions with owners, recorded directly
in equity		—	—	—	(19.7)	(165.6)	(185.3)

							Total equity
							attributable
		Issued	Share	Capital			to equity
		share	premium	redemption	Hedging	Retained	holders of
		capital	account	reserve	reserve	earnings	the Parent
	Note	£’m	£’m	£’m	£’m	£’m	£’m
As at 1 July 2023		2.0	1.7	43.2	(6.9)	97.5	137.5
Profit for the period		—	—	—	—	151.2	151.2
Movement in fair value of cash flow hedges	18	—	—	—	0.2	—	0.2
Deferred tax on hedging
movements	13	—	—	—	(1.0)	—	(1.0)
Total comprehensive income for the period		—	—	—	(0.8)	151.2	150.4
Proceeds from issue of treasury shares	22	—	—	—	—	0.1	0.1
Purchase of treasury shares	22	—	—	—	—	—	—
Share-based payments	23	—	—	—	—	4.3	4.3
Deferred tax on share-based
payments	13	—	—	—	—	(1.3)	(1.3)
Current tax on share options
exercised		—	—	—	—	0.6	0.6
Movement on cash flow
hedges transferred to inventory	18	—	—	—	3.9	—	3.9
Ordinary dividends paid	7	—	—	—	—	(157.6)	(157.6)
Total transactions with owners, recorded directly
in equity		—	—	—	3.9	(153.9)	(150.0)
As at 29 June 2024		2.0	1.7	43.2	(3.8)	94.8	137.9

131

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Consolidated Accounting Policies

For the 52 weeks ended 29 June 2024

General information

The Group financial statements consolidate those of Dunelm Group plc (‘the Company’) and its

subsidiaries (together referred to as ‘the Group’). The Company financial statements on pages 128

to 151 present information about the Company as a separate entity and not about its Group.

Dunelm Group plc and its subsidiaries are incorporated and domiciled in the UK, and registered

in England and Wales. Dunelm Group plc is a listed public Company, limited by shares and the

Company registration number is 04708277. The registered office is Dunelm Store Support Centre,

Watermead Business Park, Syston, Leicester, Leicestershire, England, LE7 1AD.

The primary business activity of the Group is the sale of homewares in the UK in stores and online.

Basis of preparation

The financial statements presented cover a 52-week trading period for the financial period ended

29 June 2024 (2023: 52-week period ended 1 July 2023).

The financial statements of Dunelm Group plc have been prepared in accordance with

UK-adopted International Accounting Standards and with the requirements of the Companies Act

2006 as applicable to companies reporting under those standards. These financial statements are

presented on pages 128 to 151.

The accounting policies set out below have, unless otherwise stated, been applied consistently

to all periods presented in these Group financial statements.

The annual financial statements are prepared under the historical cost convention except for

financial assets and financial liabilities (including derivative financial instruments and share-based

payments), which have been stated at fair value. The financial statements are prepared in pounds

sterling, rounded to the nearest 0.1 million.

Going concern

At the time of approving the financial statements, the Board of Directors is required to formally

assess that the business has adequate resources to continue in operational existence and as such

can continue to adopt the ‘going concern’ basis of accounting. To support this assessment, the

Board is required to consider the Group’s current financial position, its strategy, the market

outlook, and its principal risks.

The key judgement that the Directors have considered in forming their conclusion is the potential impact

on future revenue, profits and cashflows of a downturn in consumer spending away from homewares due

to the ongoing impact of sustained inflation, as well as the impact of broader economic uncertainty across

a three-year review period. This scenario could result in no year growth in Year 1 and lower sales and

higher costs across all channels throughout the review period. The Directors’ have also considered

a deeper downturn in consumer spending away from homewares, resulting in negative growth in

Year 1 and lower sales and higher costs across all channels throughout the review period.

In both downside scenarios Dunelm has sufficient liquidity to continue trading, including maintaining

the payment of dividends in line with its dividend policy, and to comfortably meet its financial

covenants. The Directors continue to assess the risks that climate change poses to the business

and based on current legislation, climate change is not expected to have a significant impact on

the Group’s going concern assessment or on the viability of the Group over the next five years.

Therefore, no incremental impact has been modelled in either of the downturn scenarios.

Reverse stress modelling has demonstrated that a prolonged sales reduction of 26% in each year

is required to breach covenants by the end of FY26 and a reduction of 42% in both FY24 and FY25

is required to breach the RCF limit by the end of FY25, assuming reasonable mitigating actions

have been implemented.

Even in such an event, management would follow a similar course of action to that initially

undertaken during the recent Covid-19 pandemic. Such actions could include further reductions

in discretionary spend (e.g. marketing and travel) and capital investment in new stores and refits,

and reducing headcount.

As a result, the Board believes that the Group is well placed to manage its financing and other

significant risks satisfactorily and that the Group will be able to operate within the level of its

facilities and meet its liabilities as they fall due, for at least the next five years. For this reason, the

Board considers it appropriate for the Group to adopt the going concern basis in preparing its

financial statements.

Further detail in respect of the Directors’ going concern assessment is included in the going

concern statement on page 55.

Further information regarding the Group’s business activities, together with the factors likely to

affect its future development, performance and position is set out in the Strategic Report on

pages 1 to 55. In addition, note 18 includes the Group’s objectives, policies, and processes for

managing its capital, its financial risk management objectives and its exposures to credit risk and

liquidity risk.

Use of estimates and judgements

Based on the IAS 1 definitions, there are no significant estimates or critical judgements used in

the Financial Statements. The inventory provision is not considered a significant estimate as there

is not a significant risk of a material adjustment to the level of the provision in the next 12 months.

Management does, however, consider the inventory provision to be a key estimate as it is based

on assumptions relating to a highly material balance (gross inventory) and is subject to uncertainty.

It is therefore disclosed as an other estimate in line with IAS 1.

132

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Inventory provisions

The Group provides against the carrying value of the inventories held where it is anticipated that

net realisable value (‘NRV’) will be below cost. NRV is based on estimated selling price with future

price reductions assumed to be in line with historic margin analysis on a line-by-line basis and

applied to the inventory population as deemed appropriate given the expected sell through

period and discontinuation status. A 100 basis points change in the provision rate of each stock

discontinuation category would lead to a change in the provision of £2.0m (2023: £1.9m).

Consideration is also given to whether any stock categories require additional provision due

to specific circumstances in place at the period end date.

Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Company. The Financial Statements of subsidiaries are

included in the Consolidated Financial Statements from the date that control commences until the

date that control ceases.

Transactions eliminated on consolidation

Intra-group balances, and any unrealised gains and losses or income and expenses arising from

intra-group transactions, are eliminated in preparing the Consolidated Financial Statements.

Consistent accounting policies have been adopted across the Group.

Revenue

Revenue is generated from the sale of homewares and related goods and services through the

Group’s stores and website, and is after deducting returns, relevant discounts and VAT. Revenue

is recognised when the Group has satisfied its performance obligations to its customers and the

customer has obtained control of the goods and services being transferred.

In general, these conditions for store sales are met at the point of sale. The exceptions to this are

custom-made products and Click & Collect sales, where revenue is recognised at the point that

the goods are collected, and gift cards, where revenue is deferred and subsequently recognised

when redeemed or expired. Gift card obligations are recognised as deferred income as shown in

note 16. An estimate of breakage is made on outstanding gift card balances based on historical

data and estimates of future usage patterns, and recognised in line with the pattern of utilisation

of the gift card balances. Revenue on home delivery sales is recognised at the point of delivery.

Revenue is settled in cash at the point of sale for all revenue channels.

The Group has two types of products; stocked products and products which are sent directly from

suppliers to customers. Management has established that the Group acts as a principal for both

types of products and thus should recognise revenue as the gross amount of consideration to

which it expects to be entitled.

The Group holds a sales return provision in the Consolidated Statement of Financial Position to

provide for expected levels of returns on sales made before the period end but returned after

the period end. The Group recognises the expected value of revenue relating to returns within

sales provisions and the expected value of cost of sales relating to the returned items is included

within inventories.

Expenses

Financial income and expenses

Financial income and expenses comprise interest payable on borrowings calculated using the

effective interest method, interest receivable on funds invested and related foreign exchange

gains and losses.

Retirement benefits

The Group operates a defined contribution pension plan using a third-party provider. Obligations

for the contributions to this plan are recognised as an expense in the Consolidated Income

Statement as incurred.

Share-based payments

The Group operates a number of equity-settled, share-based compensation plans, under which

the entity receives services from employees as consideration for equity instruments (options) of

the Group. The fair value of the employee services received in exchange for the grant of the

options is recognised as an expense. The total amount to be expensed is determined by reference

to the fair value of the options granted:

• including any market performance condition (for example, an entity’s share price);

• excluding the impact of any service and non-market performance vesting conditions (for

example, profitability, sales growth targets and remaining an employee of the entity over a

specified time period); and

• including the impact of any non-vesting conditions (for example, the requirement for employees

to save).

Non-market performance and service conditions are included in assumptions about the number

of options that are expected to vest. The total expense is recognised over the vesting period,

which is the period over which all of the specified vesting conditions are to be satisfied.

In addition, in some circumstances employees may provide services in advance of the grant date

and therefore the grant date fair value is estimated for the purposes of recognising the expense

during the period between service commencement period and grant date.

At the end of each reporting period, the Group revises its estimates of the number of options that

are expected to vest based on the non-market vesting conditions. It recognises the impact of the

revision to original estimates, if any, in the Consolidated Income Statement, with a corresponding

adjustment to equity.

Consolidated Accounting Policies continued

133

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

When options are exercised, the Company either issues new shares, or uses treasury shares

purchased for this purpose. For newly issued shares, the proceeds received net of any directly

attributable transaction costs are credited to share capital (nominal value) and the share

premium account.

Social security contributions payable in connection with the grant of the share options

are considered an integral part of the grant itself, and the charge will be treated as a

cash-settled transaction.

Foreign currencies

Transactions in foreign currencies are recorded at the prevailing rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currency are translated at the rates ruling at

the Consolidated Statement of Financial Position date. Resulting exchange gains or losses are

recognised in the Consolidated Income Statement for the period in financial income and expenses,

except when deferred as qualifying cash flow hedges.

Taxation

Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the

Consolidated Income Statement except to the extent that it relates to items recognised directly in

equity, in which case it is recognised in equity.

Current tax represents the expected tax payable on the taxable income for the period, using tax

rates enacted or substantively enacted at the Consolidated Statement of Financial Position date,

together with any adjustment to tax payable in respect of previous periods.

Deferred tax is provided using the Statement of Financial Position liability method, providing

for temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for taxation purposes. Deferred tax is determined

using tax rates (and laws) that have been enacted or substantively enacted at the Consolidated

Statement of Financial Position date and are expected to apply when the related deferred tax

asset is realised, or the deferred tax liability is settled.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits

will be available against which the asset can be recognised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to

offset current tax assets against current tax liabilities and when they relate to income taxes levied

by the same taxation authority on either the taxable entity or different taxable entities where there

is an intention to settle the balances on a net basis.

Dividends

Dividends are recognised as a liability in the period in which they are approved such that the

Group is obligated to pay the dividend.

Intangible assets

Intangible assets comprise of software development, licences, rights to brands and customer lists

and are stated at cost less accumulated amortisation and impairment. Costs incurred in

developing the Group’s own brands are expensed as incurred.

Separately acquired brands and customer lists are shown at historical cost. Software, brands and

customer lists acquired in a business combination are recognised at fair value at the acquisition

date. These assets are deemed to have a finite useful life and are carried at cost less accumulated

amortisation. Amortisation is calculated using the straight-line method to allocate the cost over the

estimated useful life.

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire

and bring to use the specific software. These costs are amortised over their estimated useful lives.

Costs associated with maintaining computer software programmes are recognised as an expense

as incurred. Development costs that are directly attributable to the design and testing of

identifiable and unique software products controlled by the Group are recognised as intangible

assets when the following criteria are met:

• it is technically feasible to complete the software product so that it will be available for use;

• management intends to complete the software product and use or sell it;

• there is an ability to use or sell the software product;

• it can be demonstrated how the software product will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use

or sell the software product are available; and

• the expenditure attributable to the software product during its development can be

reliably measured.

Other development expenditures that do not meet these criteria are recognised as an expense

as incurred.

Computer software development costs recognised as assets are amortised over their estimated

useful lives.

Amortisation

Amortisation is charged to the Consolidated Income Statement on a straight-line basis over the

estimated useful life of the asset. These are as follows:

Software development and licences 3 to 5 years

Rights to brands and customer lists 5 to 15 years

Consolidated Accounting Policies continued

134

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Property, plant and equipment

Owned assets

Items of property, plant and equipment are stated at historical cost less accumulated depreciation

and impairment losses. Cost includes the original purchase price of the asset and the costs

attributable to bringing the asset to its working condition for intended use.

Where parts of an item of property, plant and equipment have different useful lives, they are

accounted for as separate items of property, plant and equipment.

Investment properties

Property held by the Group to earn rental income or for capital appreciation is classified as

investment property. Property occupied by the Group is recognised within property, plant and

equipment. Judgement is applied in determining classification when management’s future plans

for properties include possible changes in future use.

Investment property is initially measured at cost being purchase price and directly attributable

expenditure. Subsequently investment properties are held at cost less accumulated depreciation

and impairment losses. Depreciation is provided on a consistent basis with that applied to

property, plant and equipment.

For the current period, given the proximity of the transaction to the end of the reporting period,

an independent valuation has not been sought, as it is considered that the purchase price is

consistent with its fair value as at the period-end date.

Depreciation

Depreciation is charged to the Consolidated Income Statement on a straight-line basis over the

estimated useful lives of each part of an item of property, plant and equipment, to write down the

cost to its estimated residual value. Land is not depreciated.

The estimated useful lives are as follows:

Freehold buildings 50 years

Leasehold improvements over the remaining period of the lease, or useful life if shorter

Fixtures, fittings, and equipment 3 to 5 years

The assets’ residual values and useful lives are reviewed and adjusted if appropriate at the end of

each reporting period. An asset’s carrying amount is written down immediately to its recoverable

amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Leases

Lease recognition

At the inception of a contract, the Group assesses whether a contract is, or contains, a lease.

A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for

a period of time in exchange for consideration. To assess whether a contract conveys the right to

control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use

assets are measured at cost, less accumulated depreciation and impairment losses and adjusted

for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of

lease liabilities recognised, adjusted for any lease payments made at or before the commencement

date, less any lease incentives received. Right-of-use assets are depreciated over the shorter of the

asset’s useful life or the lease term on a straight-line basis. Right-of-use assets are subject to, and

reviewed regularly for, impairment. Depreciation of right-of-use assets is included in operating

costs in the Consolidated Income Statement.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the

present value of the lease payments to be made over the lease term. Lease payments include

fixed payments less any lease incentives receivable.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate

at the lease commencement date if the interest rate implicit in the lease is not readily determinable.

The carrying amount of lease liabilities is remeasured if there is a modification, a change in the

lease term or a change in the fixed lease payments. Interest charges are included in finance costs

in the Consolidated Income Statement.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term

leases of machinery and equipment that have a lease term of less than 12 months and leases of

low-value assets (defined as assets with a value, when new, of £5,000 or less). Lease payments

relating to short-term leases and leases of low-value assets are recognised as an expense on

a straight-line basis over the lease term.

Consolidated Accounting Policies continued

135

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Subsequent measurement

The lease liability and right-of-use asset is subsequently remeasured to reflect changes in:

• the lease term (using a revised discount rate);

• the assessment of a purchase option (using a revised discount rate); and

• future lease payments resulting from a change in an index, or a rate used to determine those

payments (using an unchanged discount rate).

Lease modifications may also prompt remeasurement of the lease liability unless they are

determined to be separate leases.

The payments related to leases are presented under cash flow from financing activities in the

Consolidated Cash Flow Statement.

Financial instruments

Recognition and measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of

a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly

attributable to the acquisition of the financial asset. Transaction costs of financial assets carried

at FVPL are expensed in the Consolidated Income Statement.

Financial assets with embedded derivatives are considered in their entirety when determining

whether their cash flows are solely payment of principal and interest.

Subsequent measurement of debt instruments depends on the Group’s business model for

managing the asset and the cash flow characteristics of the asset. There are two measurement

categories into which the Group classifies its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash

flows represent solely payments of principal and interest are measured at amortised cost.

Interest income from these financial assets is included in finance income using the effective

interest rate method. Any gain or loss arising on derecognition is recognised directly in the

Consolidated Income Statement and presented in other gains/(losses) together with foreign

exchange gains and losses; and

• FVPL: All other financial assets that do not meet the criteria for amortised cost are measured

at FVPL, unless the Group has made an irrevocable election at the time of initial recognition to

account for the equity investment at fair value through other comprehensive income (‘FVOCI’).

A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in the

Consolidated Income Statement in the period in which it arises.

Impairment of financial assets

The Group uses a forward-looking approach to assess the expected credit losses associated with

its debt instruments carried at amortised cost. The impairment methodology applied depends on

whether there has been a significant increase in credit risk.

Derivatives

Derivative financial instruments used are forward foreign exchange contracts. These are measured

at fair value. The fair values are determined by reference to the market prices available from the

market on which the instruments are traded.

Certain derivative financial instruments are designated as hedges in line with the Group’s treasury

policy. These are instruments that hedge exposure to variability in cash flows that is attributable to

a particular risk associated with a highly probable forecasted transaction.

Any gains or losses arising from changes in fair value derivative financial instruments not

designated as hedges are recognised in the Consolidated Income Statement.

The effective portion of changes in the fair value of derivatives that are designated and qualify as

cash flow hedges is recognised in the cash flow hedge reserve within equity. The gain or loss

relating to the ineffective portion is recognised immediately in the Consolidated Income

Statement, within operating costs.

When option contracts are used to hedge forecast transactions, the Group designates only the

intrinsic value of the options as the hedging instrument.

Gains or losses relating to the effective portion of the change in intrinsic value of the options and

time value of options are recognised in the cash flow hedge reserve within equity.

When forward contracts are used to hedge forecast transactions, the Group designates the full

change in fair value of the forward contract (including forward points) as the hedging instrument.

The gains or losses relating to the effective portion of the change in fair value of the entire forward

contract are recognised in the cash flow hedge reserve within equity.

Amounts accumulated in equity are reclassified in the periods when the hedged item affects

profit or loss. Where the hedged item subsequently results in the recognition of a non-financial

asset (such as inventory), both the deferred hedging gains and losses and the deferred time value

of the option contracts or deferred forward points, if any, are included within the initial cost of the

asset. The deferred amounts are ultimately recognised in the Consolidated Income Statement as

the hedged item affects profit or loss (for example, through cost of sales).

When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets

the criteria for hedge accounting, any cumulative deferred gain/loss and deferred costs of hedging

in equity at that time remain in equity until the forecast transaction occurs, resulting in the

recognition of a non-financial asset such as inventory. When the forecast transaction is no longer

expected to occur, the cumulative gain/loss and deferred costs of hedging that were reported in

equity are immediately reclassified to the Consolidated Income Statement.

Consolidated Accounting Policies continued

136

Dunelm Group plc

Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Offsetting financial instruments

Financial assets and liabilities are offset, and the net amount reported in the Consolidated

Statement of Financial Position when there is a legally enforceable right to offset the recognised

amounts and there is an intention to settle on a net basis or realise the asset and settle the liability

simultaneously. The legally enforceable right must not be contingent on future events and must

be enforceable in the normal course of business and in the event of default, insolvency or

bankruptcy of the Group or the counterparty.

Trade and other receivables

Trade and other receivables are initially recognised at fair value and then carried at amortised cost

using the effective interest method, net of impairment provisions.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is derived using the

average cost method and includes costs incurred in bringing the inventories to their present

location and condition. Net realisable value is the estimated selling price less cost to sell in the

ordinary course of business. Provisions are made for obsolete, slow-moving or discontinued stock

and for stock losses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances including credit card receipts and deposits.

All cash equivalents have an original maturity of three months or less.

Trade and other payables

Trade and other payables are recognised initially at their fair value and subsequently measured

at amortised cost using the effective interest rate method.

Bank borrowings and borrowing costs

Interest-bearing bank loans are initially recorded at their fair value and subsequently held at

amortised cost. Transaction costs incurred are amortised over the term of the loan.

Borrowings are classed as current liabilities unless the Group has an unconditional right to defer

settlement of the liability for at least 12 months from the Consolidated Statement of Financial

Position date.

Impairment of non-financial assets

The carrying amounts of the Group’s assets are reviewed annually at each Consolidated Statement

of Financial Position date to determine whether there is any indication of impairment. If any such

indication exists, the asset’s recoverable amount is estimated.

The recoverable amount is the greater of fair value less costs of disposal and value in use. In

assessing value in use, the estimated future cash flows are discounted to their present value using

a pre-tax discount rate that reflects current market assessments of the time-value of money and

the risks specific to the asset. For an asset that does not generate largely independent cash

inflows, the recoverable amount is determined for assets grouped at the lowest levels for which

there are largely independent cash flows, i.e. the cash-generating unit to which the asset belongs.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating

unit exceeds the recoverable amount. A cash-generating unit has been defined as an individual

store or the online business. If an impairment loss is identified for a cash-generating unit, the loss

shall be allocated to reduce the carrying amount of the assets of the unit pro-rated on the basis of

the carrying amount of each asset in the unit for both property, plant and equipment and

right-of-use assets. Impairment losses are recognised in the Consolidated Income Statement .

Share capital

Where the Group purchases its own equity share capital (treasury shares), the consideration

paid, including any directly attributable incremental costs, is deducted from equity attributable

to the Group’s equity holders until the shares are cancelled or reissued. Where such shares are

subsequently sold or reissued, any consideration received net of any directly attributable

incremental transaction costs and the related income tax effects, is included in equity attributab le

to the Group’s equity holders.

Provisions

A provision is recognised in the Consolidated Statement of Financial Position when the Group

has a current legal or constructive obligation as a result of a past event and it is probable that an

outflow of economic benefits will be required to settle the obligation, and the amount has been

reliably measured.

A provision for onerous contracts is recognised when the expected benefit to be derived by the Group

from a contract is lower than the unavoidable costs of meeting its obligations under the contract.

A dilapidations provision is recognised when there is an expectation of future obligations relating to

the maintenance of leasehold properties arising from events such as lease renewals or terminations.

Climate change

Climate change risks including the impact of achieving the Group’s carbon emissions reduction

targets and the risks identified in the TCFD disclosures on pages 46 to 54 have been considered

and assessed in the preparation of the Consolidated Financial Statements for the period to

29 June 2024.

There has been no material impact identified on the financial reporting judgements and estimates

applied in the preparation of the Group’s Consolidated Financial Statements as a result of climate

change risks.

Consolidated Accounting Policies continued

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Given that the identified risks of climate change are expected to be present in the medium to long

term our focus has been on the non-current assets within the Consolidated Statement of Financial

Position. Specifically, for the material non-current assets, we note the following:

• the plant, property and equipment, and the right-of-use assets have relatively short useful lives

(the average remaining lease term of our leasehold land and buildings is 5.2 years (2023: 5.0 years)).

The longer life assets relate to freehold stores and our head office, none of which are located in

areas identified as being at significant risk to climate change; and

• the intangible assets, which consist of a brand, internally generated and other software, have a useful

life of 3 to 5 years and therefore we would not expect the identified risks to impact these assets.

The other non-current assets were also reviewed, and no risk was identified. Current assets, by

their nature, are expected to be fully utilised within the business in the short term and no climate

risk has been identified in this time horizon.

New standards and interpretations

The Group has applied the following new standards and interpretations for the first time for the

annual reporting period commencing 2 July 2023:

• IFRS 17 Insurance Contracts;

• amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies;

• amendments to IAS 8: Definition of Accounting Estimates;

• amendments to IAS 12: Deferred Tax Related to Assets and Liabilities arising from a Single

Transaction; and

• amendments to IAS 12: International Tax Reform — Pillar Two Model Rules.

The Group has reviewed whether its arrangements meet the accounting definition of an insurance

contract. Product warranty agreements issued in connection with sales of goods transfer an

element of insurance risk, but contracts of this nature are excluded from IFRS 17 and will remain

accounted for under the existing revenue and provisions standards. Therefore there is no impact

on the financial position or performance of the Group on adoption.

The adoption of the standards and interpretations listed above has not led to any changes to the

Group’s accounting policies or had any other material impact on the financial position or

performance of the Group.

New accounting standards in issue but not yet effective

New standards and interpretations that are in issue, but not yet effective, are listed below:

• amendments to IAS 1: Classification of Liabilities as Current or Non-Current;

• amendments to IAS 7 and IFRS 7: Supplier finance arrangements; and

• amendments to IFRS 16: Lease liability in a sale and leaseback.

The adoption of the above standards and interpretations is not expected to lead to any changes

to the Group’s accounting policies nor have any other material impact on the financial position or

performance of the Group.

Consolidated Accounting Policies continued

1. Revenue

The Group has one reportable segment, in accordance with IFRS 8 ‘Operating Segments’, which

is the retail of homewares in the UK.

Customers access the Group’s offer across multiple channels and their journey often involves

more than one channel. Therefore, internal reporting focuses on the Group as a whole and does

not identify individual segments.

The Chief Operating Decision-maker is the Executive Board of Directors of Dunelm Group plc.

The Executive Board reviews internal management reports on a monthly basis and performance is

assessed based on a number of financial and non-financial KPIs as well as on profit before taxation.

The list of our financial and non-financial KPIs can be found on pages 26 to 27.

Management believes that these measures are the most relevant in evaluating the performance

of the Group and for making resource allocation decisions.

All material operations of the Group are carried out in the UK. The Group’s revenue is driven by

the consolidation of individual small value transactions and as a result, Group revenue is not reliant

on a major customer or group of customers.

At the period end the Group had £12.5m (2023: £13.8m) of sales orders placed that will be

recognised in the Consolidated Income Statement when the goods are despatched in the

following financial period.

2. Operating costs

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Selling and distribution costs	528.6	489.7
Tech and support expenses	141.4	132.4
	670.0	622.1

Notes to the Consolidated Financial Statements

For the 52 weeks ended 29 June 2024

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Notes to the Consolidated Financial Statements continued

3. Operating profit

Operating profit is stated after charging the following items:

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Cost of inventories included in cost of sales	812.3	803.4
Amortisation of intangible assets	4.1	4.6
Depreciation of owned property, plant and equipment	26.3	25.2
Depreciation of right-of-use assets	50.2	49.3
Loss on disposal and impairment of property, plant and equipment and intangible assets	0.5	0.3
Impairment of right-of-use assets	0.9	—
Expense related to short-term leases	3.7	1.6

The cost of inventories included in cost of sales includes the impact of a net increase in the

provision for obsolete inventory of £0.6m (2023: £0.8m decrease).

The analysis of the auditor remuneration is as follows:

	2024	2023
	52 weeks	52 weeks
	£’000	£’000
Fees payable to the Group’s auditor for the audit of the Parent and consolidated annual financial statements	37	34
Fees payable to the Group’s auditor and its associates for other services
to the Group
— Audit of the Company’s subsidiaries pursuant to legislation	322	293
— Other assurance services (See Audit and Risk Committee Report on page 85 for further information)	50	46

4. Employee numbers and costs

The average monthly number of people employed by the Group (including Directors) was:

	2024	2024	2023	2023
	52 weeks	52 weeks	52 weeks	52 weeks
	Number	Full time	Number	Full time
	of heads	equivalents	of heads	equivalents
Selling	9,591	5,258	9,446	5,252
Distribution	1,148	1,110	1,057	1,026
Administration	1,170	1,153	1,099	1,082
	11,909	7,521	11,602	7,360

The aggregate remuneration of all employees (including Directors) comprises:

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Wages and salaries (including termination benefits)	248.0	224.8
Social security costs	17.6	16.1
Share-based payment expense	4.3	4.8
Pension costs — defined contribution plans	6.9	6.2
	276.8	251.9

Details of Directors’ remuneration, share options, long-term incentive schemes and pension

entitlements are disclosed in the Remuneration Report on pages 88 to 115 and in the Related

Parties note (note 26).

5. Financial income and expenses

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Financial income
Interest on bank deposits	1.6	1.1
Net foreign exchange gains	0.4	0.6
	2.0	1.7
Financial expenses
Interest on bank borrowings	(3.0)	(2.2)
Amortisation of issue costs of bank loans	(0.8)	(0.3)
Interest on lease liabilities	(6.1)	(5.3)
	(9.9)	(7.8)
Net financial expense	(7.9)	(6.1)

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Notes to the Consolidated Financial Statements continued

6. Taxation

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Current taxation
UK corporation tax charge for the period	51.8	40.0
Adjustments in respect of prior periods	(0.4)	0.1
	51.4	40.1
Deferred taxation
Origination of temporary differences	2.9	0.7
Adjustments in respect of prior periods	(0.1)	0.1
Impact of change in tax rate	—	(0.1)
	2.8	0.7
Total tax expense	54.2	40.8

The tax expense is reconciled with the standard rate of UK corporation tax as follows:

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Profit before taxation	205.4	192.7
UK corporation tax at standard rate of 25.0% (2023: 20.5%)	51.4	39.5
Factors affecting the charge in the period:
Non-deductible expenses	3.2	1.2
Adjustments in respect of prior periods	(0.5)	0.2
Profit on disposal of ineligible assets	0.1	—
Impact of change in tax rate	—	(0.1)
Tax expense	54.2	40.8

The taxation expense for the period as a percentage of profit before tax is 26.4% (2023: 21.2%).

The UK Government substantively enacted an increase in the corporation tax rate to 25.0%

effective from 1 April 2023. The deferred tax asset as at 1 July 2023 has been calculated based

on the rate of 25.0%.

Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the

Group operates. The legislation will be effective for the Group’s financial year beginning 30 June

2024. The Group has performed an assessment of the Group’s potential exposure to Pillar Two

income taxes. This assessment is based on the most recent information available regarding the

financial performance of the constituent entities in the Group. Based on the assessment

performed, the Pillar Two effective tax rates in all jurisdictions in which the Group operates are

above 15% and management is not currently aware of any circumstances under which this might

change. Therefore, the Group does not expect a potential exposure to Pillar Two top up taxes.

7. Dividends

The dividends set out in the table below relate to the 1 pence Ordinary Shares:

			2024	2023
		Pence per	52 weeks	52 weeks
Dividend type	In respect of period ended	share	£’m	£’m
Final	2 July 2022	26.0	—	52.4
Interim	1 July 2023	15.0	—	30.2
Special	1 July 2023	40.0	—	80.7
Final	1 July 2023	27.0	54.5	—
Interim	29 June 2024	16.0	32.3	—
Special	29 June 2024	35.0	70.8	—
			157.6	163.3

The Board is proposing a final dividend of 27 .5 pence per Ordinary Share for the period ended

29 June 2024 which equates to £55.6m. Subject to shareholder approval at the AGM this will be

paid on 26 November 2024. The ex-dividend date is 31 October 2024 and the record date is

1 November 2024.

8. Earnings per Ordinary Share

Basic earnings per share is calculated by dividing the profit for the period attributable to equity

holders of the Company by the weighted average number of Ordinary Shares in issue during the

period, excluding Ordinary Shares purchased by the Company and held as treasury shares

(note 22).

For diluted earnings per share, the weighted average number of Ordinary Shares in issue is

adjusted to assume conversion of all dilutive potential Ordinary Shares. These represent share

options granted to employees where the exercise price is less than the average market price of

the Group’s Ordinary Shares during the period.

	2024	2023
	52 weeks	54 weeks
	£’m	£’m
Profit for the period	151.2	151.9

Weighted average numbers of shares:

	2024	2023
	52 weeks	52 weeks
	’000	’000
Weighted average number of shares in issue during the period	202,355	201,917
Impact of share options	893	746
Number of shares for diluted earnings per share	203,248	202,663

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Notes to the Consolidated Financial Statements continued

8. Earnings per Ordinary Share continued

	2024	2023
	52 weeks	54 weeks
	£p	£p
Earnings per Ordinary Share — basic	74.7p	75.2p
Earnings per Ordinary Share — diluted	74.4p	75.0p

9. Intangible assets

		Rights to
	Software	brands and
	development	customer
	and licences	lists	Total
	£’m	£’m	£’m
Cost
At 2 July 2022	52.6	11.5	64.1
Additions	0.1	—	0.1
Disposals	(0.7)	—	(0.7)
At 1 July 2023	52.0	11.5	63.5
Additions	2.6	—	2.6
Disposals	(0.2)	—	(0.2)
At 29 June 2024	54.4	11.5	65.9
Accumulated amortisation
2 July 2022	43.2	11.0	54.2
Charge for the financial period	4.5	0.1	4.6
Disposals	(0.6)	—	(0.6)
At 1 July 2023	47.1	11.1	58.2
Charge for the financial period	4.0	0.1	4.1
Disposals	(0.2)	—	(0.2)
At 29 June 2024	50.9	11.2	62.1
Net book value
At 2 July 2022	9.4	0.5	9.9
At 1 July 2023	4.9	0.4	5.3
At 29 June 2024	3.5	0.3	3.8

All amortisation is included within operating costs in the Consolidated Income Statement.

Management’s review of indicators of impairment did not result in the recognition of any

impairment in the period (2023: £nil).

Within software development and licences there were £2.4m additions (2023: £nil) related

to internally generated assets.

10. Property, plant and equipment

	Freehold		Fixtures,
	land and	Leasehold	fittings and
	buildings	improvements	equipment	Total
	£’m	£’m	£’m	£’m
Cost
At 2 July 2022	107.0	164.0	132.2	403.2
Transfer	—	0.2	(0.2)	—
Additions	—	10.2	11.4	21.6
Disposals	—	(7.2)	(3.1)	(10.3)
At 1 July 2023	107.0	167.2	140.3	414.5
Transfer	(0.2)	0.2	—	—
Additions	0.3	13.4	15.8	29.5
Disposals	—	(6.8)	(4.3)	(11.1)
At 29 June 2024	107.1	174.0	151.8	432.9
Accumulated depreciation
At 2 July 2022	19.9	97.7	111.9	229.5
Transfer	0.1	0.1	(0.2)	—
Charge for the financial period	1.8	14.3	9.1	25.2
Disposals	—	(7.0)	(3.1)	(10.1)
At 1 July 2023	21.8	105.1	117.7	244.6
Charge for the financial period	1.8	14.0	10.5	26.3
Disposals	—	(6.7)	(4.1)	(10.8)
Impairment	—	(0.1)	(0.1)	(0.2)
At 29 June 2024	23.6	112.3	124.0	259.9
Net book value
At 2 July 2022	87.1	66.3	20.3	173.7
At 1 July 2023	85.2	62.1	22.6	169.9
At 29 June 2024	83.5	61.7	27.8	173.0

All depreciation charges have been included within operating costs in the Consolidated

Income Statement.

The impairment charge of £(0.2)m recognised in the period (2023: £nil) relates to temporary

provision for impairment in respect of one store. The recoverable amount calculated in the

impairment review was based on a value in use, applying a pre-tax discount rate of 12.5%.

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Notes to the Consolidated Financial Statements continued

11. Leases

Right-of-use assets included in the Consolidated Statement of Financial Position at 29 June 2024

were as follows:

		2024
		Motor
	2024	vehicles,
	Land and	plant and	2024	2023
	buildings	equipment	Total	Total
	£’m	£’m	£’m	£’m
At the beginning of the period	215.5	15.8	231.3	248.5
Additions	33.6	11.0	44.6	32.3
Disposals	(1.8)	(0.1)	(1.9)	(0.2)
Impairment	(0.9)	—	(0.9)	—
Depreciation	(44.7)	(5.5)	(50.2)	(49.3)
At the end of the period	201.7	21.2	222.9	231.3

Right-of-use additions included £5.2m of lease modifications in the period (2023: £nil).

The impairment charge of £(0.9)m (2023: £nil) relates to a temporary provision for impairment

in respect of a lease for a property currently not in use.

Lease liabilities included in the Consolidated Statement of Financial Position at 29 June 2024

were as follows:

		2024
		Motor
	2024	vehicles,
	Land and	plant and	2024	2023
	buildings	equipment	Total	Total
	£’m	£’m	£’m	£’m
At the beginning of the period	(242.5)	(15.7)	(258.2)	(278.1)
Additions	(35.1)	(11.1)	(46.2)	(33.2)
Disposals	1.8	0.1	1.9	0.2
Interest	(5.1)	(1.0)	(6.1)	(5.3)
Repayment of lease liabilities	52.8	6.2	59.0	58.2
At the end of the period	(228.1)	(21.5)	(249.6)	(258.2)

The discount rate applied across all lease liabilities ranged between 0.90% and 6.76% (2023: 0.90%

and 5.85%). The discount rate reflects our incremental borrowing rate which we assess by considering

the marginal rate on the Group’s Revolving Credit Facility (‘RCF’), the Bank of England base rate,

the yield on Government bonds and the term of the lease.

The maturity analysis of the lease liabilities is as follows:

	2024	2023
	£’m	£’m
Current	(52.1)	(53.4)
Non-current	(197.5)	(204.8)
	(249.6)	(258.2)

The remaining contractual maturities of the lease liabilities, which are gross and undiscounted,

are as follows:

	2024	2023
	£’m	£’m
Less than one year	(59.2)	(65.8)
One to two years	(50.9)	(61.4)
Two to five years	(104.1)	(123.0)
Five to ten years	(63.2)	(78.9)
More than ten years	(1.7)	(3.7)
Total undiscounted lease liability	(279.1)	(332.8)

The average remaining lease term of our leasehold land and buildings is 4.2 years (2023: 5.0 years).

The following amounts have been recognised in the Consolidated Income Statement:

		2024
		52 weeks
	2024	Motor
	52 weeks	vehicles,	2024	2023
	Land and	plant and	52 weeks	52 weeks
	buildings	equipment	Total	Total
	£’m	£’m	£’m	£’m
Depreciation of right-of-use assets	44.7	5.5	50.2	49.3
Impairment of right-of-use assets	0.9	—	0.9	—
Interest expenses (included in financial expenses)	5.1	1.0	6.1	5.3
Expense relating to short-term leases	2.3	1.4	3.7	1.6

The total cash outflow for leases during the financial period was £56.9m (2023: £57.3m).

12. Investment properties

In June 2024 we purchased a tenanted freehold property for £7.5m, providing current rental

income and future capacity for our store support centre. Given the proximity of the transaction to

the end of the reporting period, an independent valuation has not been sought, as it is considered

that the purchase price is consistent with its fair value as at the period-end date.

Subsequent to the period end, we also secured a freehold tenanted retail property in an attractive

location for £22.2m. We expect to convert this into a Dunelm store in the future upon expiry of the

existing lease.

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Notes to the Consolidated Financial Statements continued

13. Deferred tax assets/liabilities

Deferred tax is provided in full on temporary differences under the liability method using

a taxation rate of 25.0%.

Deferred taxation assets and liabilities are attributable to the following:

	Assets		Liabilities			Net assets/(liabilities)
	2024	2023	2024	2023	2024	2023
	£’m	£’m	£’m	£’m	£’m	£’m
Property, plant and equipment	—	—	(2.7)	(0.8)	(2.7)	(0.8)
Share-based payments	3.0	5.1	—	—	3.0	5.1
Hedging	1.3	2.3	—	—	1.3	2.3
Other temporary differences	0.4	0.5	(0.2)	(0.2)	0.2	0.3
	4.7	7.9	(2.9)	(1.0)	1.8	6.9

	Assets		Liabilities			Net assets/(liabilities)
	2024	2023	2024	2023	2024	2023
	£’m	£’m	£’m	£’m	£’m	£’m
Deferred tax recoverable/
(payable) after more than 12 months	1.9	2.1	(2.9)	(1.0)	(1.0)	1.1
Deferred tax recoverable/
(payable) within 12 months	2.8	5.8	—	—	2.8	5.8
	4.7	7.9	(2.9)	(1.0)	1.8	6.9

The movement in the net deferred tax balance is as follows:

	Balance at			Balance at
	2 July	Recognised	Recognised	1 July
	2022	in income	in equity 2023
	£’m	£’m	£’m	£’m
Property, plant and equipment	0.7	(1.5)	—	(0.8)
Share-based payments	7.5	0.7	(3.1)	5.1
Hedging	(4.3)	—	6.6	2.3
Other temporary differences	0.2	0.1	—	0.3
	4.1	(0.7)	3.5	6.9

	Balance at			Balance at
	1 July	Recognised	Recognised	29 June
	2023	in income	in equity 2024
	£’m	£’m	£’m	£’m
Property, plant and equipment	(0.8)	(1.9)	—	(2.7)
Share-based payments	5.1	(0.8)	(1.3)	3.0
Hedging	2.3	—	(1.0)	1.3
Other temporary differences	0.3	(0.1)	—	0.2
	6.9	(2.8)	(2.3)	1.8

14. Inventories

	2024	2023
	£’m	£’m
Raw materials	1.3	1.6
Work in progress	0.1	—
Goods for resale	221.6	209.4
	223.0	211.0

Goods for resale includes a net realisable value provision of £21.3m (2023: £20.7m). Write-downs of

inventories to net realisable value amounted to £30.7m (2023: £30.2m). These were recognised as an

expense during the period and were included in cost of sales in the Consolidated Income Statement.

15. Trade and other receivables

	2024	2023
	£’m	£’m
Trade receivables	3.7	3.1
Other receivables	0.4	0.1
Prepayments and accrued income	22.1	21.1
	26.2	24.3

All trade receivables are due within one year from the end of the reporting period.

No impairment was incurred on trade and other receivables during the period and the expected

credit loss provision held at period end is £nil (2023: £nil). No material amounts are overdue

(2023: £nil).

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Notes to the Consolidated Financial Statements continued

16. Cash and cash equivalents

	2024	2023
	£’m	£’m
Cash at bank and in hand	23.4	46.3

The Group deposits funds only with institutions that have a credit rating of ‘A’ and above and the

term is less than three months.

17. Trade and other payables

	2024	2023
	£’m	£’m
Trade payables	92.3	94.6
Accruals	67.3	63.5
Deferred income	12.5	12.5
Taxation and social security	32.3	37.3
Other payables	0.6	0.2
	205.0	208.1

Deferred income includes contract liabilities of £8.8m (2023: £9.1m) where payment has been

received in respect of performance obligations which will be met in future periods. Performance

obligations associated with contact liabilities relating to unfulfilled sales orders of £7.5m (2023: £8.0m)

are expected to be met within twelve months of the reporting date. Contract liability for gift cards

of £1.3m (2023: £1.1m) may be met over a period of up to two years from the reporting date,

consistent with the term of the gift cards in issue.

	2024	2023
	£’m	£’m
Opening balance	1.1	1.3
Issued in the year	5.6	5.3
Released to income statement	(5.4)	(5.5)
	1.3	1.1

18. Financial risk management

The Board of Directors has overall responsibility for the oversight of the Group’s risk management

framework. A formal process for reviewing and managing risk in the business is in place.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial

instrument fails to meet its contractual obligations and arises principally from the Group’s deposits

with banks and financial institutions as well as foreign exchange hedging agreements with its

banking counterparties. The Group only deals with creditworthy counterparties and uses

publicly available financial information to rate its counterparties, therefore credit risk is considered

to be low.

Group policy is that surplus funds are placed on deposit with counterparties approved by the

Board, with a minimum of an ‘A’ credit rating. The credit limit for the syndicate banks is up to

£60.0m. All other parties are limited to £25.0m.

The Group’s maximum exposure to credit risk is represented by the carrying amount of financial

assets. No collateral is held (2023: £nil). At the period end the maximum exposure is detailed in

the table below:

	2024	2023
	£’m	£’m
Current
Cash and cash equivalents	23.4	46.3
Trade and other receivables	4.1	3.2
Accrued income	10.2	10.1
Derivative financial instruments	0.3	1.8
Total current financial assets	38.0	61.4
Non-current
Derivative financial instruments	0.1	—
Total financial assets	38.1	61.4

Credit risk

Trade and other receivables include rebates due from suppliers recognised as a reduction to cost

of sales in the period to which they relate. The rebates are recovered through deductions from

future payments to suppliers and therefore management is confident of the recoverability of

these balances.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses (‘ECL’)

which uses a lifetime expected loss allowance for all trade and other receivables and accrued

income. To measure the expected credit losses, trade and other receivables and accrued income

have been grouped based on shared credit risk characteristics and the days past due. There is

limited exposure to ECL due to the way the Group operates.

The Group will write off, either partially or in full, the gross carrying amount of a financial asset

when there is no realistic prospect of recovery. This is usually the case when it is determined that

the debtor does not have the assets or sources of income that could generate sufficient cash flows

to repay the amounts subject to the write-off. However, the Group may still choose to pursue

enforcement in order to recover the amounts due.

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Strategic report Governance report Financial statements Other information

Notes to the Consolidated Financial Statements continued

18. Financial risk management continued

On that basis, the loss allowance as at 1 July 2023 and 29 June 2024 was determined to not be

significant for trade and other receivables, accrued income and cash and cash equivalents.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall

due. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will

always have sufficient liquidity to meet its liabilities when due. The Group manages this risk by

regularly monitoring cash flow forecasts. Further details of the Group’s available facilities can be

found in the capital management section of this note.

All cash flows on financial liabilities for 2024 and 2023 are contractually due within one year with

the exception of provisions, bank loans, certain derivative financial liabilities and lease liabilities.

The details of lease liabilities are shown in note 11.

Total borrowings of £79.0m (2023: £77.0m) reflect the level of facility drawdown at the period end

on the Group’s committed RCF.

Interest rate risk

The Group’s bank borrowings incur variable interest rate charges. The Group’s policy aims to

manage the interest cost of the Group within the constraints of its financial covenants. The Group

will continue to monitor movements in the interest rate swap market.

During the period, if SONIA interest rates had been 100 basis points higher with all other variables

held constant, post-tax profit would have been £0.3m lower (2023: £0.3m lower).

Foreign currency risk

All of the Group’s revenues are in sterling. The majority of purchases are also in pounds sterling,

but some goods purchased direct from overseas suppliers are paid for in US dollars, accounting

for just over 30.0% (2023: 30.0%) of stock purchases in the period ended 29 June 2024.

The Group uses various means to cover its exposure to US dollars including holding US dollar

cash balances and taking out forward foreign exchange contracts for the purchase of US dollars.

All the Group’s foreign exchange transactions are designed to satisfy US dollar denominated

liabilities. The maximum level of hedging coverage which will be undertaken is 100.0% of

anticipated expenditure on a three-month horizon, stepping down to 75.0% on a four- to

12-month horizon and 50.0% on a 13- to 18-month horizon. There is a low level of coverage

beyond the 18-month horizon.

Cash flow hedges are in place to manage foreign exchange rate risk arising from forecast

purchases denominated in US dollars. At the Consolidated Statement of Financial Position date,

the fair value of US dollar foreign exchange forward contracts held in cash flow hedges was

a £5.1m liability (2023: £9.2m liability) which relates to a commitment to purchase $368.0m

(2023: $350.5m) for a fixed sterling amount. A fair value gain of £0.2m (2023: loss of £14.0m) was

recognised in other comprehensive income and no loss (2023: £nil) was recognised on cash flow

hedges during the period. In the period, a loss of £3.9m (2023: £19.7m gain) was recycled from the

cash flow hedge reserve to inventory to offset foreign exchange movements on purchases. The

remaining hedge reserve balance will be recycled to the Consolidated Income Statement to offset

future purchases occurring after the Consolidated Statement of Financial Position date, the

majority of which expire in the next 12 months.

The outstanding US dollar liabilities at the period end were $0.1m (2023: $0.1m).

At the period end if GBP had strengthened by 10% against US dollar with all other variables held

constant, post-tax profit would have been £0.1m higher (2023: £0.9m higher) as a result of foreign

exchange gains on translation of US dollar denominated trade payables and cash and cash

equivalents. Other components of equity would have been £0.5m higher (2023: £0.9m higher)

as a result of a decrease in fair value of derivatives designated as cash flow hedges.

Conversely, if GBP had weakened by 10% against US dollar with all other variables held constant,

post-tax profit for the period would have been £0.1m lower (2023: £1.1m lower) and other

components of equity would have been £0.5m lower (2023: £0.9m lower).

The US dollar period end exchange rate applied in the above analysis is £1 = $1.2644 (2023:

£1 = $1. 2694).

Capital management

The Group considers equity plus debt as capital. There are no externally imposed capital

requirements on the Group.

The Board’s objective with respect to capital management is to ensure the Group continues as a

going concern in order to optimise returns to shareholders. The Board regularly monitors the level

of capital in the Group to ensure that this can be achieved.

The Company has a syndicated RCF of £250m which is committed until 6 September 2027, which

may be extended by a further two, one year increments at Dunelm’s request, subject to lender

consent. There is also an optional accordion facility of £100m. The terms of the RCF are consistent

with normal practice and include covenants in respect of leverage (Group net debt to be no

greater than 2.5x Group EBITDA before exceptional items) and fixed charge cover (Group EBITDAR

before exceptional items to be no less than 1.75x Group fixed charges), both of which were met

comfortably as at 29 June 2024 as shown below. In addition, the Company maintains £10m of

uncommitted overdraft facilities with one syndicate partner bank.

145

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Strategic report Governance report Financial statements Other information

Notes to the Consolidated Financial Statements continued

18. Financial risk management continued

The gearing ratio and banking covenants were as follows:

	2024	2023
	£’m	£’m
Total borrowings (note 19)	79.0	77.0
Less: cash and cash equivalents (note 16)	(23.4)	(46.3)
Net debt	55.6	30.7
Less: unamortised debt issue costs (note 19)	(2.0)	(1.1)
Net debt including unamortised debt issue costs	53.6	29.6
Total equity	137.9	137.5
Total capital	191.5	167.1
Gearing ratio	28.0%	17.7%

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Operating profit	213.3	198.8
Add: Depreciation and amortisation of property, plant and equipment
and intangible assets (note 3)	30.4	29.8
Add: Loss on disposal and impairment of property, plant and equipment
and intangible assets (note 3)	0.5	0.3
Adjusted EBITDA	244.2	228.9
Leverage ratio	0.22	0.13
Adjusted EBITDA	244.2	228.9
Add: RoUA impairment	0.9	—
Add: RoUA depreciation	50.2	49.3
EBITDA	295.3	278.2
Add: Rent	4.3	4.5
EBITDAR	299.6	282.7
Net interest (note 5)	7.9	6.1
Rent plus RoUA depreciation	54.5	53.8
Fixed charges	62.4	59.9
Fixed charge cover	4.8	4.7

Derivatives: Hedge ineffectiveness

Hedge effectiveness is determined at the inception of the hedge relationship, and through

periodic prospective effectiveness assessments to ensure that an economic relationship exists

between the hedged item and hedging instrument.

For hedges of foreign currency purchases, the Group enters into hedge relationships where the

critical terms of the hedging instrument match exactly with the terms of the hedged item. The

Group therefore performs a qualitative assessment of effectiveness. If changes in circumstances

affect the terms of the hedged item such that the critical terms no longer match exactly with the

critical terms of the hedging instrument, the Group uses the hypothetical derivative method to

assess effectiveness.

In hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast

transaction changes from what was originally estimated, or if there are changes in the credit risk

of the Group or the derivative counterparty.

Market risk

The Group has the option to use a combination of foreign currency options and foreign currency

forwards to hedge its exposure to foreign currency risk.

The Group only designates the spot component of foreign currency forwards in hedge relationships.

The spot component is determined with reference to relevant spot market exchange rates. The

differential between the contracted forward rate and the spot market exchange rate is defined as

the forward points. It is discounted where material.

The changes in the forward element of the foreign currency forwards and the time value of the

options that relate to hedged items are deferred in the hedging reserve.

Effects of hedge accounting on the financial position and performance

	2024	2023
	£’m	£’m
Foreign currency forwards
Carrying amount of (liability)/asset	(5.1)	(9.2)
Notional amount	295.5	286.4
	July 2024—	July 2023—
Maturity date	April 2026	June 2025
Hedge ratio	1:1	1:1
Change in value of hedged item used to determine hedge
effectiveness	£0.2m	£(14.0)m
Change in the value of hedging instruments	£(0.2)m	£14.0m
Weighted average hedged rate for the year
(includingforward points)		£1:US$1.2445 £1:US$1.2998

146

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Strategic report Governance report Financial statements Other information

Notes to the Consolidated Financial Statements continued

18. Financial risk management continued

Fair values

The fair value of the Group’s financial assets and liabilities are equal to their carrying value. The fair

value of foreign currency contracts are amounts required by the counterparties to cancel the

contracts at the end of the period.

Fair value hierarchy

Financial instruments carried at fair value are required to be measured by reference to the

following levels:

• Level 1: quoted prices in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset

or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3: inputs for the asset or liability that are not based on observable market data

(unobservable inputs).

All derivative financial instruments carried at fair value have been measured by a Level 2 valuation

method, based on observable market data.

Financial assets/(liabilities)

The carrying value of all financial assets and financial liabilities was materially equal to their

fair value.

	Financial	Financial
	assets at	liabilities at	Derivatives
	amortised	amortised	used for
	cost	cost	hedging	Total
At 1 July 2023	£’m	£’m	£’m	£’m
Cash and cash equivalents	46.3	—	—	46.3
Trade and other receivables	3.2	—	—	3.2
Accrued income	10.1	—	—	10.1
Derivative financial instruments	—	—	1.8	1.8
Total financial assets	59.6	—	1.8	61.4
Trade and other payables	—	(94.8)	—	(94.8)
Accruals	—	(63.5)	—	(63.5)
Lease liabilities	—	(258.2)	—	(258.2)
Bank loans	—	(75.9)	—	(75.9)
Derivative financial instruments	—	—	(11.0)	(11.0)
Total financial liabilities	—	(492.4)	(11.0)	(503.4)
Net financial assets/(liabilities)	59.6	(492.4)	(9.2)	(442.0)

	Financial	Financial
	assets at	liabilities at	Derivatives
	amortised	amortised	used for
	cost	cost	hedging	Total
At 29 June 2024	£’m	£’m	£’m	£’m
Cash and cash equivalents	23.4	—	—	23.4
Trade and other receivables	4.1	—	—	4.1
Accrued income	10.2	—	—	10.2
Derivative financial instruments	—	—	0.4	0.4
Total financial assets	37.7	—	0.4	38.1
Trade and other payables	—	(92.9)	—	(92.9)
Accruals	—	(67.3)	—	(67.3)
Lease liabilities	—	(249.6)	—	(249.6)
Bank loans	—	(77.0)	—	(77.0)
Derivative financial instruments	—	—	(5.5)	(5.5)
Total financial liabilities	—	(486.8)	(5.5)	(492.3)
Net financial assets/(liabilities)	37.7	(486.8)	(5.1)	(454.2)

The currency profile of the Group’s cash and cash equivalents is as follows:

	2024	2023
	£’m	£’m
Sterling	22.2	33.8
US dollar	0.9	12.4
Euro	0.3	0.1
	23.4	46.3

19. Bank loans

	2024	2023
	£’m	£’m
Total borrowings	79.0	77.0
Less: unamortised debt issue costs	(2.0)	(1.1)
Net borrowings	77.0	75.9

Borrowings relate to the Group’s syndicated Revolving Credit Facility, as described in note 18.

147

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Annual Report and Accounts 2024

Strategic report Governance report Financial statements Other information

Notes to the Consolidated Financial Statements continued

19. Bank loans continued

The analysis below shows the reconciliation of net debt:

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Net debt at 2 July 2023 and 3 July 2022	(30.7)	(23.8)
Net (decrease)/increase in cash and cash equivalents (excluding foreign
exchange revaluations)	(23.3)	15.5
Effect of foreign exchange (note 5)	0.4	0.6
Repayments of Revolving Credit Facility	108.0	116.0
Drawdowns of Revolving Credit Facility	(110.0)	(139.0)
Movement in net debt	(24.9)	(6.9)
Net debt represented by Cash and cash equivalents (note 16)	23.4	46.3
Non-current borrowings (note 19)	(79.0)	(77.0)
Net debt at 29 June 2024 and 1 July 2023	(55.6)	(30.7)
Lease liabilities (note 11)	(249.6)	(258.2)
Net debt at 29 June 2024 and 1 July 2023 (including lease liabilities)	(305.2)	(288.9)

20. Provisions

					Balance at
	Balance at	Utilised in	Created in	Released in	29 June
	2 July 2023	the period	the period	the period	2024
	£’m	£’m	£’m	£’m	£’m
Property related	5.9	(0.2)	1.5	(1.7)	5.5

Property-related provisions consist of costs associated with vacant property and dilapidations.

Dilapidations are based on the Directors’ best estimate of the Group’s future liabilities.

21. Issued share capital

	2024	2023
	Number of	Number of
	Ordinary Shares	Ordinary Shares
	of 1p each	of 1p each
In issue at the start of the period	203,426,835	203,426,835
Issued during the period in respect of share option schemes	—	—
In issue at the end of the period	203,426,835	203,426,835

	2024		2023
	Number of	2024	Number of	2023
	shares	£’m	shares	£’m
Ordinary shares of 1p each:
Authorised	500,000,000	5.0	500,000,000	5.0
Allotted, called up and fully paid	203,426,835	2.0	203,426,835	2.0

Proceeds received in relation to shares issued during the period were £nil (2023: £nil).

22. Treasury shares

	2024		2023
	Number of	2024	Number of	2023
	shares	£’m	shares	£’m
Outstanding at the beginning of the period	1,712,790	16.0	1,686,200	17.5
Purchased during the period	—	—	908,064	7.0
Reissued during the period in respect of share
option schemes	(486,329)	(4.5)	(881,474)	(8.5)
Outstanding at the end of the period	1,226,461	11.5	1,712,790	16.0

The Group reissued 486,329 (2023: 881,474) treasury shares during the period for a total value of

£4.5m (2023: £8.5m). The Group acquired nil (2023: 908,064) shares through purchases on the

London Stock Exchange during the period for a total value of £nil (2023: £7.0m).

Proceeds from the issue of treasury shares included in the Consolidated Statement of Cash Flows

and Consolidated Statement of Changes in Equity of £0.1m (2023: £2.4m) is the amount

employees contributed.

The Group has the right to reissue the remaining treasury shares at a later date.

23. Share-based payments

The Group operates a number of share-based payment schemes as follows:

Dunelm Group Savings Related Share Option Plan (Sharesave)

The Dunelm Group plc Savings Related Share Option Plan (Sharesave) scheme is open to all

colleagues with eligible length of service. Invitations to participate in the scheme are issued

annually and the scheme is ‘approved’ under HMRC rules. The current maximum monthly savings

for the schemes detailed below is £500. Options are granted at the prevailing market rate less a

discount of 20.0%. Options may be exercised under the scheme within six months of the

completion of each three-year savings contract (from the grant date). There is provision for early

exercise in certain circumstances such as death, disability, redundancy, and retirement. Sharesave

options are accounted for as equity-settled awards under IFRS 2.

148

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Strategic report Governance report Financial statements Other information

Notes to the Consolidated Financial Statements continued

23. Share-based payments continued

The following table summarises the movement in Dunelm Group plc Sharesave options during

the period:

		2024		2023
		Weighted		Weighted
	2024	average	2023	average
	No. of	exercise	No. of	exercise
Sharesave Plans	options	price (p)	options	price (p)
Outstanding at beginning of period	2,214,266	717.67	1,182,512	923.00
Granted	614,293	810.00	2,063,669	667.00
Exercised	(22,174)	658.94	(371,564)	634.54
Forfeited	(371,340)	754.03	(660,351)	973.79
Outstanding at end of period	2,435,045	735.95	2,214,266	717.67
Exercisable at end of period	78,984	1,167.00	30,550	654.00

Exercisable at end of period refers to all share options not exercised which have passed their

vesting date, but not yet reached their expiry date. The figure of 78,984 options (2023: 30,550

options) excludes the provisions for early exercise explained above.

Options outstanding at 29 June 2024 are exercisable at prices ranging between 667.00p and

1,167.00p (2023: 654.00p and 1,167.00p) and have a weighted average remaining contractual life

of 2.1 years (2023: 2.8 years), as analysed in the table below:

		2024		2023
		Weighted		Weighted
		average		average
	2024	remaining	2023	remaining
	No. of	contractual	No. of	contractual
Sharesave Plans	options	life (years)	options	life (years)
Exercise price (pence):
654.00	—	—	19,110	—
667.0 0	1,683,046	2.0	1,928,943	3.0
810.00	537,082	3.0	—	—
1,046.00	135,195	1.0	170,758	2.0
1,167.0 0	79,722	—	95,455	1.0
	2,435,045	2.1	2,214,266	2.8

Long-Term Incentive Plan (LTIP)

As explained in the Remuneration Report, the Group operates an equity-settled LTIP scheme for

Executive Directors and other senior colleagues. Performance conditions for the LTIP awards are

detailed in the Remuneration Report. LTIP options are also accounted for as equity-settled awards

under IFRS 2.

The following table summarises the movements in nil-cost LTIP awards during the period:

	2024	2023
	No. of	No. of
LTIP awards	options	options
Outstanding at beginning of period	1,897,942	1,465,667
Granted	579,517	754,112
Dividend equivalent awarded in the period	67,275	122,382
Exercised	(348,727)	(345,487)
Forfeited	(204,096)	(98,732)
Outstanding at end of period	1,991,911	1,897,942
Exercisable at end of period	4,717	21,505

Exercisable at end of period refers to all share options not exercised which have passed their

vesting date, but not yet reached their expiry date.

The weighted average remaining contractual life of these options is 8.1 years (2023: 8.1 years).

Restricted Stock Award (RSA)

These awards are granted to particular individuals and are dependent on continuing employment.

The only performance condition is that the threshold diluted earnings per share as per the LTIP

conditions is met as detailed in the Remuneration Report on pages 88 to 115. RSA options are also

accounted for as equity-settled awards under IFRS 2.

The following table summarises the movements in nil-cost RSA options during the period:

	2024	2023
	No. of	No. of
Restricted Stock Awards	options	options
Outstanding at beginning of period	316,446	123,544
Granted	155,032	207,203
Dividend equivalent awarded in the period	9,928	14,697
Exercised	(115,428)	(12,756)
Forfeited	(31,231)	(16,242)
Outstanding at end of period	334,747	316,446
Exercisable at end of period	12,437	2,836

Exercisable at end of period refers to all share options not exercised which have passed their

vesting date, but not yet reached their expiry date.

The weighted average remaining contractual life of these options is 7.9 years (2023: 7.5 years).

149

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Strategic report Governance report Financial statements Other information

Notes to the Consolidated Financial Statements continued

23. Share-based payments continued

Bonus Deferred Shares Award

The Bonus Deferred Shares Award provides options over shares in Dunelm Group plc for

colleagues of the Group as a discretionary bonus. This is an equity-settled share option scheme

and there are no performance conditions attached to these awards, they are only dependent on

continued employment. Under this arrangement, colleagues are awarded a number of options

which is based on the cash value of the earned bonus award, determined by their achievement of

a mixture of Group and individual performance metrics, divided by a share price value of 1,189.00p

which was approved at the November 2020 AGM. The deferred shares awarded vested in

September 2021 and/or September 2022, depending on colleague level.

The Bonus Deferred Shares Award is structured as nil-cost options and the following table

summarises their movement during the period:

	2024	2023
Bonus Deferred Shares Award	No. of options	No. of options
Outstanding at beginning of period	2,783	158,398
Dividend equivalent awarded in the period	—	—
Exercised	—	(151,667)
Forfeited	(74)	(3,948)
Outstanding at end of period	2,709	2,783
Exercisable at end of period	2,709	2,783

The weighted average remaining contractual life of these options is nil years (2023: nil years).

Fair value calculations

The fair values of all share options granted are calculated at the date of grant using a Black-Scholes

option pricing model. Expected volatility is determined by calculating the historical volatility of the

Group’s share price over a period equivalent to the expected life of an option which is aligned to

its vesting period.

The following tables list the inputs to the model used for options granted in the periods ended

29 June 2024 and 1 July 2023 based on information at the date of grant:

Sharesave plans	2024	2023
Share price at date of grant	1,086.00p	974.00p
Exercise price	810.00p	667.00p
Volatility	34.55%	42.28%
Expected life	3 years	3 years
Risk-free rate	3.31%	3.66%
Dividend yield	3.88%	3.27%
Fair value per option	342.80p	393.50p

LTIP awards	2024	2023
Share price at date of grant	1,086.00p	865.00p
Exercise price	0.00p	0.00p
Volatility	34.55%	43.06%
Expected life	3 years	3 years
Risk-free rate	3.93%	3.62%
Dividend yield	3.88%	3.27%
Fair value per option	736.90p	623.30p

Restricted Stock awards	2024	2023
Share price at date of grant	1,086.00p—1,111.00p	678.00p—867.00p
Exercise price	0.00p	0.00p
Volatility	27.43%—34.55%	35.58%—35.90%
Expected life	1—2 years	1—2 years
Risk-free rate	3.93%—3.97%	2.82%—3.62%
Dividend yield	3.88%	3.27%
Fair value per option	736.90—1,086.20p	623.30p—839.10p

The charge to the Income Statement for all share option schemes is disclosed in note 4.

24. Commitments

As at the period end date, the Group had entered into capital contracts for new stores and refits

amounting to £1.5m (2023: £8.1m).

25. Contingent liabilities

The Group had no contingent liabilities at the period end date (2023: none).

26. Related parties

Identity of related parties

The Group has related party relationships with its subsidiaries and with its Directors. Transactions

between the Group and its subsidiaries, which are related parties, have been eliminated on

consolidation for the Group. A list of subsidiaries can be found in note C4 to the Parent Company

Financial Statements.

150

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Strategic report Governance report Financial statements Other information

Notes to the Consolidated Financial Statements continued

26. Related parties continued

Key management personnel

The key management personnel of the Group comprise members of the Board of Directors and

the Executive Board.

Directors of the Company and their close relatives control 42.7% (2023: 42.7%) of the voting shares

of the Company.

Disclosures relating to remuneration of Directors are set out in the Remuneration Report on

pages 88 to 115. The remuneration of the key management personnel is set out below:

	2024	2023
	52 weeks	52 weeks
	£’m	£’m
Wages and salaries	3.7	3.8
Termination benefits	—	0.1
Short-term employee benefits	2.0	3.1
Post-employment benefits	0.1	0.1
Share-based payments (including NI)	1.0	1.9
	6.8	9.0

The amount of gains made by Directors on the exercise of share options are disclosed in the

Remuneration Report on page 108.

From time to time Directors of the Group, or their related entities, may purchase goods from the

Group. These purchases are on the same terms and conditions as those entered into by other

Group employees and values involved are trivial.

27. Ultimate controlling party

The Directors consider that there is no ultimate controlling party of Dunelm Group plc.

Parent Company Statement of Financial Position

As at 29 June 2024

Note

29 June

2024

£’m

1 July

2023

£’m

Non-current assets

Investments in subsidiary undertakings C4 72.5 68.8

Deferred tax assets C5 0.4 0.6

Total non-current assets 72.9 69.4

Current assets

Trade and other receivables C6 84.7 162.3

Total current assets 84.7 162.3

Total assets 157.6 231.7

Current liabilities

Trade and other payables C7 (0.2) (0.3)

Total current liabilities (0.2) (0.3)

Total liabilities (0.2) (0.3)

Net assets 157.4 231.4

Equity

Issued share capital C11 2.0 2.0

Share premium account 1.7 1.7

Non-distributable reserves 27.4 23.6

Capital redemption reserve 43.2 43.2

Retained earnings 83.1 160.9

Total equity attributable to equity holders of the Parent 157.4 231.4

The Company made a profit after tax of £79.3m (2023: £230.9m).

The financial statements on pages 151 to 156 were approved by the Board of Directors on

11 September 2024 and were signed on its behalf by:

Karen Witts

Director

Company number 04708277

11 September 2024

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Strategic report Governance report Financial statements Other information

Parent Company Statement of Changes in Equity

For the 52 weeks ended 29 June 2024

Note

Issued

capital

£’m

premium

account

£’m

Non-

distributable

reserves

£’m

Capital

redemption

reserve

£’m

Retained

earnings

£’m

Total equity

attributable

to equity

holders of

the Parent

£’m

As at 2 July 2022 2.0 1.7 19.6 43.2 97.3 163.8

Profit for the period — — — — 230.9 230.9

Total comprehensive

income for the period — — — — 230.9 230.9

Purchase of treasury

shares C12 — — — — (7.0) (7.0)

Proceeds from issue of

treasury shares C12 — — — — 2.4 2.4

Share-based payments C13 — — 4.0 — 0.8 4.8

Deferred tax on share-

based payments C5 — — — — (0.3) (0.3)

Current corporation tax

on share options

exercised C8 — — — — 0.1 0.1

Dividends C3 — — — — (163.3) (163.3)

Total transactions with

owners, recorded directly

in equity — — 4.0 — (167.3) (163.3)

As at 1 July 2023 2.0 1.7 23.6 43.2 160.9 231.4

Profit for the period — — — — 79.3 79.3

Note

Issued

capital

£’m

premium

account

£’m

Non-

distributable

reserves

£’m

Capital

redemption

reserve

£’m

Retained

earnings

£’m

Total equity

attributable

to equity

holders of

the Parent

£’m

Total comprehensive

income for the period — — — — 79.3 79.3

Purchase of treasury

shares C12 — — — — — —

Proceeds from issue of

treasury shares C12 — — — — 0.1 0.1

Share-based payments C13 — — 3.8 — 0.5 4.3

Deferred tax on share-

based payments C5 — — — — (0.1) (0.1)

Current corporation tax

on share options

exercised C8 — — — — — —

Dividends C3 — — — — (157.6) (157.6)

Total transactions with

owners, recorded directly

in equity — — 3.8 — (157.1) (153.3)

As at 29 June 2024 2.0 1.7 27.4 43.2 83.1 157.4

The non-distributable reserves’ purpose is to reflect movements in share-based payments in

respect of awards given by the Parent Company to employees of its subsidiaries.

At the time of declaring dividends, the Directors assessed the level of available distributable

reserves with reference to relevant accounts and considered there to be sufficient levels to

support the dividend.

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Parent Company Accounting Policies

For the 52 weeks ended 29 June 2024

Non-market performance and service conditions are included in assumptions about the number

of options that are expected to vest. The total expense is recognised over the vesting period,

which is the period over which all of the specified vesting conditions are to be satisfied.

In addition, in some circumstances employees may provide services in advance of the grant date

and therefore the grant date fair value is estimated for the purposes of recognising the expense

during the period between service commencement period and grant date.

At the end of each reporting period, the Company revises its estimates of the number of options

that are expected to vest based on the non-market vesting conditions. It recognises the impact of

the revision to original estimates, if any, in the Income Statement, with a corresponding adjustment

to equity.

When the options are exercised, the Company either issues new shares, or uses treasury shares

purchased for this purpose. For newly issued shares, the proceeds received net of any directly

attributable transaction costs are credited to share capital (nominal value) and share premium.

The social security contributions payable in connection with the grant of the share options

are considered an integral part of the grant itself, and the charge will be treated as a

cash-settled transaction.

Taxation

Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the

Income Statement except to the extent that it relates to items recognised directly in equity, in

which case it is recognised in equity.

Current tax represents the expected tax payable on the taxable income for the period, using tax

rates enacted or substantively enacted at the Statement of Financial Position date, together with

any adjustment to tax payable in respect of previous periods.

Deferred tax provides for temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred

tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the

Statement of Financial Position date and are expected to apply when the related deferred tax

asset is realised or the deferred tax liability is settled.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits

will be available against which the asset can be recognised.

General information

Dunelm Group plc (the ‘Company’) is incorporated and domiciled in the UK. Dunelm Group plc

is a listed public Company, limited by shares and the Company registration number is 04708277.

The registered office is Dunelm Store Support Centre, Watermead Business Park, Syston,

Leicester, Leicestershire, England, LE7 1AD.

Basis of preparation

These Financial Statements have been prepared in accordance with FRS 101 “Reduced Disclosure

Framework” (FRS101).

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions

available under that standard in relation to standards not yet effective, presentation of a cash flow

statement and requirements to disclose related party transactions entered into between two or

more members of a group. The accounting policies adopted for the Parent Company, Dunelm

Group plc, are otherwise consistent with those used for the Group which are set out on pages 132

to 138.

The annual Financial Statements have been prepared under the historical cost convention, and in

accordance with the Companies Act 2006 and other applicable law. The Financial Statements are

prepared in pounds sterling, rounded to the nearest 0.1 million.

Going concern

After making enquiries, the Directors have a reasonable expectation that the Company has

adequate resources to continue in operational existence for the foreseeable future. Accordingly,

they continue to adopt the going concern basis in preparing the financial statements.

Additional considerations relating to the potential downturn in the homewares market on the

going concern assumptions are set out in the Consolidated Financial Statements on page 132.

Share-based payments

Employees of the Company have been granted options for two equity-settled, share-based

compensation plans, under which the entity receives services from employees as consideration for

equity instruments (options) of the Company. The fair value of the employee services received in

exchange for the grant of the options is recognised as an expense. The total amount to be expensed

is determined by reference to the fair value of the options granted:

• including any market performance conditions (for example, an entity’s share price);

• excluding the impact of any service and non-market performance vesting conditions (for

example, profitability, sales growth targets and remaining an employee of the entity over a

specified time period); and

• including the impact of any non-vesting conditions (for example, the requirement for employees

to save).

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Deferred income tax assets and liabilities are offset when there is a legally enforceable right to

offset current tax assets against current tax liabilities and when they relate to income taxes levied

by the same taxation authority on either the taxable entity or different taxable entities where there

is an intention to settle the balances on a net basis.

Dividends

Dividends are recognised as a liability in the period in which they are approved such that the

Company is obligated to pay the dividend.

Trade and other receivables

Trade and other receivables are initially recognised at fair value and then carried at amortised cost,

net of impairment provisions.

Share capital

Where the Company purchases its own equity share capital (treasury shares) the consideration

paid, including any directly attributable incremental costs, is deducted from equity attributable

to the Company’s equity holders until the shares are cancelled or reissued. Where such shares

are subsequently sold or reissued, any consideration received net of any directly attributable

incremental transaction costs and the related income tax effects, is included in equity attributable

to the Company’s equity holders.

Investments

Investments in subsidiary undertakings are stated at the adjusted cost of the investment. IFRS 2

requires the Parent Company to recognise an increase in the cost of its investment in a subsidiary

which has issued share options in the Parent Company’s shares to its employees.

New standards and interpretations

A detailed list of new standards, amendments or interpretations can be found in the consolidated

accounting policies on page 138.

Use of estimates and judgements

Based on the IAS 1 definitions, there are no significant estimates or critical judgements used in the

Company Financial Statements.

C1. Income Statement

The Company made a profit after tax of £79.3m (2023: £230.9m). The Directors have taken

advantage of the exemption available under section 408 of the Companies Act 2006 and have not

presented an Income Statement for the Company.

Disclosures relating to the fees paid to the Company’s auditors are set out in note 3 in the Group’s

financial statements on page 139.

C2. Employee costs

The Company’s employees are the three Executive Directors and the Non-Executive Directors.

Full details of the Directors’ remuneration and interests are set out in the Remuneration Report on

pages 88 to 115. Share-based payments details are given in note C13 on page 156.

C3. Dividends and special distributions to shareholders

Disclosures relating to dividends and special distributions to shareholders are set out in note 7

in the Group’s financial statements on page 140.

C4. Investments in subsidiary undertakings

Shares in subsidiary undertakings:

£’m

As at 2 July 2022 64.8

Share-based payments 4.0

As at 1 July 2023 68.8

Share-based payments 3.7

As at 29 June 2024 72.5

The share-based payment adjustment to investments reflects share option awards given by the

Parent Company to employees of its subsidiaries.

Parent Company Accounting Policies continued

Notes to the Parent Company Financial Statements

For the 52 weeks ended 29 June 2024

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Notes to the Parent Company Financial Statements continued

C4. Investments in subsidiary undertakings continued

The following were subsidiaries as at 29 June 2024:

Subsidiary Proportion of ordinary shares held Nature of business

Dunelm Limited 100% Holding company

Dunelm (Soft Furnishings) Ltd* 100% Retailer of soft furnishings

Dunelm Estates Limited* 100% Dormant company

Zoncolan Limited* 100% Dormant company

Fogarty Holdings Limited* 100% Non-trading company

Globe Online Limited* 100% Dormant company

Dunelm (Soft Furnishings)

Londonderry Ltd* 100% Non-trading company

* Share capital held by subsidiary undertaking.

Dunelm Group plc, the Parent Company, and its subsidiaries (excluding Dunelm (Soft Furnishings)

Londonderry Ltd) are incorporated and domiciled in the UK. The registered office is Dunelm Store

Support Centre, Watermead Business Park, Syston, Leicester, Leicestershire, England, LE7 1AD.

The registered address for Dunelm (Soft Furnishings) Londonderry Ltd is Faustina Retail Park,

35 Buncrana Road, Londonderry, Northern Ireland, BT48 8QN.

C5. Deferred tax assets

2024

£’m

2023

£’m

Employee benefits 0.4 0.6

The movement in deferred tax assets is as follows:

Balance at

3 July 2022

£’m

Recognised

in income

£’m

Recognised

in equity

£’m

Balance at

1 July 2023

£’m

Employee benefits 1.0 (0.1) (0.3) 0.6

Balance at

2 July 2023

£’m

Recognised

in income

£’m

Recognised

in equity

£’m

Balance at

29 June

2024

£’m

Employee benefits 0.6 (0.1) (0.1) 0.4

C6. Trade and other receivables

2024

£’m

2023

£’m

Amounts owed by subsidiary undertakings 84.7 162.3

Amounts owed by subsidiary undertakings are repayable on demand. Interest is charged monthly

on all intercompany balances at an annual rate of 2.0%. There is no security on these balances.

These amounts pose no liquidity or credit risk as they are owed by other Group undertakings and

are expected to be settled by Group transactions.

C7. Trade and other payables

2024

£’m

2023

£’m

Accruals and deferred income 0.2 0.3

0.2 0.3

C8. Taxation

2024

£’m

2023

£’m

Current taxation

UK corporation tax charge for the period — 0.1

Deferred taxation

Origination of temporary differences 0.1 0.1

Tax expense 0.1 0.2

The tax charge is reconciled with the standard rate of UK corporation tax as follows:

2024

£’m

2023

£’m

Profit before taxation 79.4 231.1

UK corporation tax at standard rate of 25% (2023: 20.5%) 19.9 47.4

Factors affecting the charge in the period:

Income not subject to tax (20.4) (47.8)

Impact of change in tax rate — (0.1)

Group relief 0.6 0.7

Tax expense 0.1 0.2

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Notes to the Parent Company Financial Statements continued

C8. Taxation continued

The UK Government substantively enacted an increase in the corporation tax rate to 25.0%

effective from 1 April 2023. The deferred tax asset as at 29 June 2024 has been calculated based

on the rate of 25.0%.

C9. Interest-bearing loans and borrowings

The Company’s only interest-bearing borrowings relate to intercompany loans which have interest

charges of 2.0% and are not affected by changes in SONIA.

C10. Financial risk management

Capital management

The Board’s objective with respect to capital management is to ensure the Company continues as

a going concern in order to optimise returns to shareholders. The Board’s policy is to retain a

strong capital base so as to maintain investor, creditor and market confidence and to sustain future

development. The Board regularly monitors the level of capital in the Group to ensure that this can

be achieved.

C11. Issued share capital

Disclosures relating to issued share capital are set out in note 21 in the Group’s financial

statements on page 148.

C12. Treasury shares

Disclosures relating to treasury shares are set out in note 22 in the Group’s financial statements

on page 148.

C13. Share-based payments

The Company operates the following share-based payment schemes for the CEO and CFO:

a. Dunelm Group Savings Related Share Option Plan (Sharesave)

The Dunelm Group plc Savings Related Share Option Plan (Sharesave) scheme is open to all

colleagues with eligible length of service. Invitations to participate in the scheme are issued

annually and the scheme is ‘approved’ under HMRC rules. The current maximum monthly savings

for the schemes is £500. Options are granted at the prevailing market rate less a discount of 20%.

Options may be exercised under the scheme within six months of the completion of each

three-year savings contract (from the grant date). There is provision for early exercise in certain

circumstances such as death, disability, redundancy, and retirement. Sharesave options are

accounted for as equity-settled awards under IFRS 2.

b. Long-Term Incentive Plan (LTIP)

As explained in the Remuneration report, the Company operates an equity-settled LTIP scheme.

Performance conditions for the LTIP awards are detailed in the Remuneration Report. LTIP options

are also accounted for as equity-settled awards under IFRS 2.

C14. Contingent liabilities

The Company had no contingent liabilities at the period end date (2023: £nil).

C15. Related parties

Key management personnel

All employees of the Company are key management personnel.

Directors of the Company and their close relatives control 42.7% (2023: 42.7%) of the voting shares

of the Company.

2024

52 weeks

£’m

2023

52 weeks

£’m

Wages and salaries 1.9 1.7

Short-term employee benefits 1.0 1.4

Share-based payments (including NI) 0.6 0.9

3.5 4.0

There were no termination benefits for employees of the Company.

The amount of gains made by Directors on the exercise of share options are disclosed in the

Remuneration report on page 108.

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Alternative performance measures (‘APMs’)

APM Definition, purpose and reconciliation to statutory measure

Adjusted EBITDA EBITDA less depreciation on right-of-use assets. To measure

compliance with bank covenants.

EBITDAR EBITDAR is calculated as EBITDA plus rent. To measure

compliance with bank covenants.

Effective tax rate Taxation expressed as a percentage of profit before taxation.

To measure how close we are to the UK corporation tax rate and

understand the reasons for any differences.

Capex (net of disposals) Acquisition of intangible assets, property, plant and equipment

and investment properties less proceeds on disposal of

intangible assets, property, plant and equipment and

investment properties.

Free cash flow Free cash flow is defined as net cash generated from operating

activities less capex (net of disposals) and business combinations,

net interest paid (including leases) and loan transaction costs, and

repayment of principal element of lease liabilities. Measures the

cash generated that is available for disbursement to shareholders.

Net cash/(debt) Cash and cash equivalents less total borrowings (as shown in note

19). Excludes IFRS 16 lease liabilities.

Cash conversion Free cash flow expressed as a percentage of operating profit.

APM Definition, purpose and reconciliation to statutory measure

Total sales Equivalent to revenue (from all channels). This is net of

customer returns.

Digital sales Digital sales include home delivery, Click & Collect and tablet-

based sales in store.

Digital % total sales Digital sales (as defined above) expressed as a percentage of

revenue. This is not a measure that we seek to maximise in itself,

but we measure it to track our adaptability to changing

customer behaviours.

Ordinary dividend cover Ordinary dividend cover is calculated as earnings per share

divided by the total ordinary dividend relating to the financial

year. This measure is used in our capital and dividend policy.

Gross margin % Gross profit expressed as a percentage of revenue. Measures the

profitability of product sales prior to operating costs.

Operating costs to sales ratio Operating costs expressed as a percentage of revenue.

To measure the growth of costs relative to sales growth.

EBITDA Earnings before interest, tax, depreciation, amortisation and

impairment. Operating profit plus depreciation and amortisation

of property, plant and equipment, right-of-use assets and

intangible assets plus loss on disposal and impairment of property,

plant and equipment and intangible assets. Used in our capital

and dividend policy.

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Advisors and contacts

Corporate

brokers

Barclays Bank plc

1 Churchill Place

London E14 5HP

Tel: 020 7623 2323

Peel Hunt LLP

100 Liverpool Street

London EC2M 2AT

Tel: 020 7418 8900

Financial

advisors

UBS Investment Bank

5 Broadgate

London EC2M 2QS

Tel: 020 7567 8000

Financial

public

relations

MHP Communications

60 Great Portland Street

London W1W 7RT

Tel: 020 3128 8100

Independent

auditors

PricewaterhouseCoopers LLP

Pegasus Business Park

Castle Donnington

East Midlands DE74 2UZ

Tel: 01509 604 000

Registered

office

Dunelm Store Support Centre

Watermead Business Park

Syston Leicester

Leicestershire England LE7 1AD

Company registration no: 4708277

Principal

bankers

Barclays Bank plc

1 Churchill Place

London E14 5HP

Tel: 020 7623 2323

Investor

relations

corporate.dunelm.com

Tel: 0116 264 4400

Email: investorrelations@dunelm.com

Registrars Equiniti

Aspect House

Spencer Road, Lancing

West Sussex BN99 6DA

Tel: 0371 384 2030

1. If dialling internationally, call +44 121 415 7047. The helpline is open Monday to Friday 8.30 am to 5.30 pm, excluding bank holidays.

158

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Designed and produced by Gather.London

This report is printed on Revive 100 Silk paper certified in accordance with the FSC®

(Forest Stewardship Council®) and is recyclable and acid-free.

Pureprint Ltd is FSC certified and ISO 14001 certified showing that it is committed to all round

excellence and improving environmental performance is an important part of this strategy.

Pureprint Ltd aims to reduce at source the effect its operations have on the environment and

is committed to continual improvement, prevention of pollution and compliance with any

legislation or industry standards.

Pureprint Ltd is a Carbon/Neutral® Printing Company.

This is to certify that by using Carbon Balanced Paper for the Dunelm Group Annual Report,

Dunelm has balanced through World Land Trust the equivalent of 122kg of carbon dioxide.

This support will enable World Trust to protect 23m

. of critically threatened tropical forest.

Issued on 20/09/2024 — Certificate number CBP026995. Presented by Denmaur Paper Media.

Tel: 0116 264 4400

Email: investorrelations@dunelm.com

corporate.dunelm.com