Saturday, January 19, 2019

Dixons Carphone lifts profit predictions


After a “rollercoaster Christmas”, electricals and white goods retailer Dixons Carphone, is forecasting a higher-than-expected profit for the full year.

The company, which was formed after a merger between Dixons Retail and Carphone Warehouse in August last year, is expecting pre-tax profits of £355m to £375m, above the initial forecast of £354m, it said in a statement this morning.

The firm said it had also seen some shifts in the way people shopped, with online sales growing.

Sebastian James, Group Chief Executive, said he is “pleased with the end result” having also experienced stable gross margin. James cited the retailer‘s Black Friday promotion as majorly impacting on the three weeks that followed, although customers also responded positively to deals held on Boxing Day. The latter saw growth on record-breaking numbers last year across the UK and Nordics, which James attributed to “availability, pricing, service and marketing”, subsequently translating into growth in market share across all key territories over the period.

James added:

There have been some market shifts as product lifecycles and ways of buying change: online has risen as a proportion, with excellent growth in both home delivery and click-and-collect. Prepay phone sales have continued to fall, replaced by postpay contracts to a large extent. We have seen a return to growth in laptops but tablet sales fell sharply as we saw less innovation in the category. We have seen excellent growth in ultra-high-definition TVs as people, rightly, trade into the newer technologies. Finally, white goods had a very good peak trading period across the board with particularly rapid growth in online.

Our peak time of year is now behind us, and I am therefore comfortable to guide the market that our overall pro forma Headline profit before tax will be somewhere ahead of market expectations in the range of £355m to £375m. This includes continued price and service investment as well as, of course, the impact of the decline in the value of the Norwegian Krone which affects us negatively in Sterling terms.

I have been consistently impressed by the way in which our teams have kept the great engines of the business turning through what must be one of the biggest years of change in our history.”