First-half profit rises at Dixons Carphone on strong demand

Retailer made an underlying pretax profit of £144m in the 26 weeks to October 29th

 Carphone Warehouse headquarters  in west London: The retailer beat forecasts with a 19 per cent rise in first-half profit

Carphone Warehouse headquarters in west London: The retailer beat forecasts with a 19 per cent rise in first-half profit

 

Dixons Carphone, Europe’s largest electronic device and mobile phone retailer, beat forecasts with a 19 per cent rise in first-half profit, helped by a robust performance in its home market.

The group, which trades as Currys, PC World and Carphone Warehouse in the UK and Ireland, Elkjop and Elgiganten in Nordic countries and Kotsovolos in Greece, said on Wednesday it made an underlying pretax profit of £144 million (€171 million)in the 26 weeks to October 29th.

That compares to analysts’ average forecast of £141 million and £121 million made in the same period last year.

Group sales at stores open over a year rose 4 per cent, driven by a 5 per cent rise in the UK & Ireland division.

“Looking forward, we remain optimistic about our ability to continue to gain market share in all our key markets, and, while we have still not seen any effect on consumer demand as a consequence of Brexit, we have been planning for the possibility of more uncertain times ahead,” said chief executive Seb James.

Robust growth in consumer spending has been one of the main drivers of Britain’s economy since June’s vote to leave the European Union. But many retailers expect to have to raise prices next year, probably squeezing consumer demand.

Despite reporting solid results so far in 2016, shares in Dixons Carphone have fallen 29 per cent, given its exposure to expensive, big ticket goods and perceived vulnerability to any slide in consumer demand next year.

Before Wednesday’s update analysts were on average forecasting an underlying pretax profit of £487 million for 2016-17, up from £447 million in 2015-16.

Dixons Retail also announced it has formed a strategic partnership with energy supplier SSE to provide “connected home” services.

– (Reuters)