Dixons Carphone warns of 'uncertain times' despite 19% rise in profits
Electricals and mobile phones giant Dixons Carphone cheered its best ever Black Friday as it posted a 19% jump in half-year profits, but said it was planning for "more uncertain times".
The group said that, while it had yet to see a knock to shopper confidence from the Brexit vote, it was bracing for a more unsettled 2017 as EU exit negotiations loom large and amid cost pressures from the sharply weaker pound.
Dixons Carphone buys around 90% of its products in sterling, although its manufacturers are expected to start increasing prices as the Brexit-hit pound sends their costs soaring.
It hopes to offset this and insisted customers were unlikely to see any noticeable hike in prices.
Dixons Carphone chief executive Seb James of said: "W hile 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.
"We are also planning our offer so that potential currency impacts are minimised for the customer, and are ensuring that next year, as always, everybody can be absolutely sure that they won't get a better deal anywhere."
Dixons Carphone posted a 19% jump in underlying pre-tax profits to £144 million for the six months to October 29 after notching up a 5% rise in like-for-like sales across the UK and Ireland.
Black Friday, which fell after its first half, was another record trading day for the group as shoppers snapped up gadgets such as smart fitness and wearable technology, as well as drones and dash cams.
Mr James said the Currys and PC World owner was cutting its fixed costs so the group can adapt to any potential difficult market conditions and " generally preparing for all eventualities - just in case".
Dixons Carphone has so far shrugged off any Brexit vote impact, with sales growth picking up over its first half - to 6% over the second quarter across the UK and Ireland.
It added that Christmas trading was "so far so good", following on from its Black Friday success last month.
Black Friday best-sellers included the Dyson V6 cordless vacuum cleaner, while sales of smart fitness technology leapt 241% higher year-on-year, drones sales rose 60% and dash cams - which capture footage of car journeys - saw a 250% sales leap.
It added that it saw a 10-fold increase in demand for virtual reality products, such as the Samsung Gear 360 camera.
Despite the caution over 2017, retail experts at Liberum said it was a "reassuring" set of half-year results.
Dixons Carphone - created from the £5 billion merger between Dixons and Carphone Warehouse in 2014 - said its store overhaul was on track to see all its shops revamped as electrical superstores merging its three main brands by April.
It is shutting 134 shops as part of the plan, but is relocating all staff affected to nearby superstores.
Shares in Dixons Carphone fell 4% as the comments over a more uncertain outlook weighed on the stock.
The company's shares have already fallen by a third so far this year amid investor concerns over the impact of the weak pound on costs and demand next year.
But its overseas operations were offered a boost from the pound in half-year results, with revenues up 23% across the Nordics and 20% in southern Europe.
Analysts at Liberum said the market's fear over the impact of the pound is "overdone".
They added: "Should the group have to raise prices, its broad ranges and price architecture mean that consumers will still be able to find products that meet their desired price points.
"Additionally, we would expect favourable negotiations with suppliers to be had, given the deep relationships that exist."