Dixons Carphone profits climb by 17%
Dixons Carphone has seen a 17% increase in full year profits as it took its market share to a record high in nearly all of its markets.
In the year to 30 April group like-for-like revenue rose by 5% including a 6% increase in the UK & Ireland and a 4% rise in its Nordics business.
Group headline revenue was up 3% on a local currency basis but broadly flat in Sterling terms at £9.7 billion. The difference between the total revenue growth on a local currency basis and like-for-like was predominantly due to a reduction in stores in the UK during the year and a decision to reduce low-margin wholesale activity.
Headline pre-tax profit was £447 million compared to £381 million in the previous year. Statutory profit was £161 million compared to the previous £97 million after non-headline charges of £176 million which included a loss from discontinued operations of £18 million.
Seb James, Dixons Carphone group chief executive, said: “I am very pleased to be announcing another year of significant earnings growth, with profits before tax up more than 17%.
“In this momentous year we have largely completed our merger activities, driven customer satisfaction and market share to all-time highs in virtually all of our markets, made our shops more interactive and exciting while becoming ever more competitive with pure-play retailers, launched a new joint venture in the US, launched a new UK mobile network, and embarked on an ambitious property plan in the UK and Ireland. We also had our biggest ever trading day on Black Friday last year.”
Revenue in the UK & Ireland increased by 1% to £6.4 billion. The like-for-like sales growth in the UK & Ireland was a reflection of mobile phone market share gains along with good growth in electricals. The difference between the total revenue growth and like-for-like mainly reflected a reduction in stores. The revenue growth combined with cost and synergy savings resulted in headline EBIT increasing by 20% to £365 million.
Like-for-like revenue growth in the Nordics business was mainly driven by white goods, mobile and laptops, which offset a weakness in PCs and tablets.
The company’s Southern Europe business had strong underlying results with like-for-like revenue up 4%. This was largely driven by Greece which benefited from strong growth in white goods and tablets. This more than offset some weakness in TV and laptops following the end of a government laptop promotion in the prior year.
The Spanish business continued to shift its store mix to franchise and away from owned stores, with owned stores down 52 to 249 but with an increase in franchise stores from 198 to 249.
This year the company plans to turn all of the former Dixons stores into the new 3-in-1 shops, introduce an interactive new e-commerce platform to Carphone Warehouse, open a new distribution centre in Sweden, introduce same-day delivery, and roll out around 150 new stores in the US with Sprint.
Looking ahead following the result of the EU referendum James said: “Finally, the nation has spoken and there has been a vote to exit the EU in due course. As you can imagine, we have been giving some thought to this. Our view is that, as the strongest player in our market and despite the volatility that is the inevitable consequence of such change, we expect to find opportunities for additional growth and further consolidate our position as the leader in the UK market.”
