LONDON (Alliance News) - Dixons Carphone PLC on Wednesday reported growth in profit in the first half of its financial year, as it reiterated that it has not seen any lack in consumer demand following the UK's vote to leave the European Union, but the retailer noted that it is "planning for the possibility of more uncertain times ahead".
Shares in Dixons Carphone were trading down 3.9% at 352.40 pence on Wednesday following the announcement, making it the worst performer in the FTSE 100.
The seller of mobile phones and other consumer electronics said pretax profit in the 26 weeks ended October 29 grew to GBP104 million from GBP78 million the year before, as revenue rose to GBP4.87 billion from GBP4.39 billion and like-for-like sales increased by 4%.
Geographically, like-for-like sales rose by 5% in the UK & Ireland, by 2% in the Nordics and by 7% in Southern Europe, with a strong performance from mobile phones, white goods and consumer electronics, offsetting decreased revenue in computing.
Total revenue growth was even better, rising by 23% in the Nordics and by 20% in Southern Europe, boosted in sterling terms by the weakening of the pound against the euro and Norwegian krone following the Brexit vote.
Total revenue in UK & Ireland grew by 4%, slightly lower than the like-for-like result due to a reduction in store numbers as Dixons Carphone merges its Carphone Warehouse, Currys and PC World brands under one roof.
The company aims to reduce the number of stores to 323 from an initial 402 in the core UK estate. The programme is expected to be completed in the current financial year in April, following which the standalone Currys PC World stores will cease to exist, although 695 standalone Carphone Warehouse stores will remain, on top of the 323 3-in-1 stores.
Despite the good results and not yet seeing a decrease in UK consumer demand after the Brexit vote, Dixons Carphone's Chief Executive Seb James said the company is "planning for the possibility of more uncertain times ahead".
"In particular, we have been focusing on reducing our fixed cost base, identifying areas of potential market share growth if the world becomes a tougher place for our competitors, and generally preparing for all eventualities - just in case. 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 else," the CEO said.
Dixons Carphone added that it has struck a new strategic partnership for its Connected World Services business with London-listed energy firm SSE PLC, which will be using Dixons Carphone's honeyBee software.
Connected World Services is Dixons Carphone's business-to-business arm, through which it has contracts with companies including British telecommunications provider TalkTalk Telecom Group PLC and US mobile carrier Sprint Corp.
In the first half, revenue at CWS increased by 46%.
Dixons Carphone will pay an interim dividend of 3.5 pence, which is an 8% increase year-on-year.
By Karolina Kaminska; karolinakaminska@alliancenews.com; @KarolinaAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
