Belfast Telegraph

Retail firm's higher than forecast profits surprise City

By Roger Baird

The newly created company behind Carphone Warehouse and Currys PC World said strong quarterly trading in electricals and mobile phones will help it post annual profits above City expectations.

Dixons Carphone, which is valued at £5bn after a merger last summer, said UK and Ireland same-store sales rose 13% in the 17 weeks to May 2 as the business built on momentum seen in Christmas trading.

The figure is more than twice City forecasts.

It said it had rolled out 233 Carphone Warehouse concessions in Currys and PCWorld stores, and was increasing these concessions at the rate of four per week.

Earlier this year the company closed down the flagship Currys store in Belfast's High Street.

Across the group, which employs more than 40,000 people in 14 countries, like-for-like sales jumped by 9%, driven by strong promotional periods such as Easter and market share gains.

This again was more than double what the Square Mile had expected.

The retailer said that it expects its pre-tax profit to be slightly above a previously guided range of £355m to £375m.

For the full year, like-for-like sales across the group were up 6% with a rise of 8% in the UK and Ireland.

Annual results are due to be published on July 16.

Chief executive Sebastian James  said: "Nearly a year into our merger, I am very pleased to be posting such a strong first full year trading statement for our combined Dixons Carphone group."

He added that the business would "fix the roof while the sun was shining" and would continue to invest in its IT infrastructure, extend its free warranty programme and boost staff training.

In April the business launched its 4G virtual mobile network operator, called iD.

Mr James said: "So far it is doing everything that we hoped it would."

Dixons Carphone was created last year with the aim of tapping into the way technology will transform households through the "internet of things'', as rapid internet speeds mean appliances can be controlled by the touch of a mobile device.

Such a retail behemoth is expected to have more power to stand up to online competition from electrical retail rivals such as AO World.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: "A profit upgrade on a profit upgrade is testament to the early benefits of the Dixons Carphone merger."

He added that he saw further good news in the future: "The increasingly pervasive 'internet of things' will provide a threat for some, but an opportunity for others and the current signs are that Dixons Carphone will fall into the latter category."

Belfast Telegraph