Dixons Carphone eases consumer spending fears with 10% rise in profits
Electricals giant Dixons Carphone has batted away fears of a consumer spending slowdown as it said high street conditions were "holding up" following a 10% leap in annual profits.
The group reported underlying pre-tax profits of £501 million for the year to April 29, up from £457 million the previous year.
Like-for-like sales rose 4% in the UK and Ireland, although Dixons said around 3% of this rise was thanks to sales transferred from closed shops as part of a store overhaul.
Finance boss Humphrey Singer said the group was "alive to how the consumer is behaving", but it had seen "no changes yet".
Chief executive Seb James said: " While the UK consumer environment seems to be holding up for us, there will undoubtedly continue to be changes in the way people buy all of the products that we sell from phones to washing machines.
"Change always represents opportunity, and our job is to find the propositions that keep us compelling to our customers forever."
Bottom-line pre-tax profits rose 47% to £386 million, while group-wide like-for-like sales lifted 4%.
The Currys and PC World owner said its electricals sales - seen as a retail bellwether - had so far proved resilient to the consumer squeeze being felt by many high street rivals.
Mr Singer said the group had seen "nothing out of the ordinary", although Dixons is expecting "modest" growth in electricals sales over the year ahead.
Other retailers have been sounding the alarm over the squeeze from Brexit-fuelled inflation, with department store Debenhams the latest to warn over trading conditions on Tuesday.
Sofa chain DFS sparked fears over a slowdown earlier this month when it issued a surprise profit warning, blaming political and economic uncertainty.
Dixons said strong electricals sales in the UK and Ireland offset a more "challenging" mobile phone market, hit by supply issues with some models and more competitive SIM-only deals.
Its new three-in-one megastores are preforming as expected, Mr Singer added.
Internationally, the group said sales in the Nordics rose 1% and were 6% higher across southern Europe.
Dixons Carphone - created from a £5 billion merger between Dixons and Carphone Warehouse in 2014 - said its annual results saw profits rise above half a billion pounds for the first time.
George Salmon, equity analyst at Hargreaves Lansdown, said the results were a dose of much-needed cheer for the retail sector, but cautioned the chain may face tougher conditions ahead.
He said: " It's reassuring to hear Dixons say that for now at least, the UK consumer environment seems to be holding up.
"The business has some strengths, not least its unique position as the last electrical specialist standing on the UK high street, but the company faces the triple threat of Amazon's relentless expansion, sterling's weakness and a squeezed UK consumer."