Dixons Carphone reveals 21% surge in profits following merger
Electricals and mobile phones giant Dixons Carphone hailed a "terrific year" as it revealed a 21% surge in profits in its first set of annual results since being created following a merger between two of the high street's biggest names.
The group behind Carphone Warehouse and Currys PC World said underlying pre-tax profits leapt to £381 million in the 13 months to May 2 after robust trading for both its electricals and mobile business.
Dixons Carphone said UK and Ireland like-for-like sales rose 8% over the year helped by its "most competitive ever" pricing on electricals, while its mobile business was also given a boost by the demise of rival Phones 4U.
Sebastian James, group chief executive, said: "This has been a terrific first year for Dixons Carphone.
"We have seen excellent increases in both sales and profitability and we have made very encouraging progress with the tricky job of integrating these two great companies."
But he added the job was "far from done".
"I am acutely aware that there is no room for complacency in a sector which has seen unprecedented change, bringing both opportunities and challenges," he said.
The group welcomed the Government's plans for a national "living wage" unveiled in last week's summer Budget, saying it was already preparing for higher minimum wages for staff ahead of the announcement .
It admitted the move had brought forward its plans, but stressed everything was " budgeted for".
Finance director Humphrey Singer said: "It's the right thing to do to offer a good wage for our employees."
Other firms have been highly critical of the living wage plans amid fears over soaring wage costs after Chancellor George Osborne said all firms must pay a compulsory living wage of £7.20 an hour for over-25s from April next year, rising to £9 by 2020.
JD Wetherspoon yesterday became the latest to warn over its impact, saying it would add "considerable uncertainty" to the under-pressure pub sector.
Dixons Carphone also responded to the Government's plans to allow councils to extend Sunday trading hours, saying it was ready to do so.
"It's our job to do what customers want," said Mr Singer.
The group - created last summer through the £5 billion mega-merger between Dixons Retail and Carphone Warehouse - said sales had been strong for domestic appliances such as coffee machines, as well as large so-called white goods and televisions.
It said it sold enough curved TVs to build a curved TV wall around the Isle of Wight.
But it said the business in Southern Europe had continued to weigh on the group, with Spain seeing difficult trading and dragging comparable store sales 5% lower - down 10% in local currencies.
D espite recent concerns that its Greek arm Kotsovolos would be impacted by the bailout crisis in the country, Dixons said strong sales of large screen TVs helped boosted like-for-like sales and saw the business return to profit in the year.
Dixons has already revealed that Greek shoppers have been panic buying electrical and white goods to protect their money, but said today this only lasted a few days after the recent referendum's No vote for austerity plans.
There are now strong hopes for a resolution to the Greek debt saga after politicians yesterday voted in favour of the latest bailout deal, but Dixons added it remained "very mindful of the uncertain economic and political situation in the country and the effect this may have on our business", saying it has been "planning for every contingency".