(Alliance News) - Dixons Carphone PLC on Thursday said it has seen a boost to online sales as more customers begin working from home due to Covid-19, but the electrical goods seller does not expect to meet its full-year profit guidance.
Electronics retailers were among the non-essential businesses ordered closed by UK Prime Minister Boris Johnson earlier this week, meaning the FTSE 250 firm shuttered its bricks and mortar units, as it had already done in Ireland and Greece. Most stores in the Nordic region continue to trade, however.
Dixons Carphone said: "Our large online operations remain open. Online trading has been very strong in all countries over the last two weeks as people have been preparing to work from home and use essential technology to continue their lives during the coronavirus outbreak. Early signs are that this strong trading has continued since stores closed and will help to compensate for lost store sales."
In the 11 weeks to March 21, group like-for-like sales rose 4% and in the final three weeks of that stretch alone, they were 13% higher. For Electricals alone, the increases were 8% and 23%, respectively, while Mobile sales were down 15% and 24%.
UK & Ireland Online like-for-likes soared 72% during the three weeks, and climbed 23% in the 11 weeks.
Dixons Carphone said it would have expected total sales in the rest of its financial year of about GBP400 million from the stores which have now closed. The company's financial year is to the end of April.
"There will be some recovery through Online operations but overall the loss of sales will adversely impact our full-year profitability and cash position," the company said.
It therefore does not expect to meet guidance of annual adjusted pretax profit of GBP210 million, nor of a lower net debt.
The firm added: "The Covid-19 situation continues to develop and is likely to remain uncertain for some time. We will therefore not update current year or medium-term guidance until the impact of Covid-19 becomes clearer."
The company also outlined a series of cost savings. It has reduced non-essential spending, eyeing GBP200 million in annual savings.
Capital expenditure is set to be below previous guidance of GBP200 million.
UK government measures to assist retailers could lead to even more savings. The suspension of business rates means the company could pocket an extra GBP200 million and the deferral of VAT reduces its near-term cash outflow by about GBP140 million, Dixons Carphone said.
On its dividend, the company said its board will "consider whether its is prudent" to make a final payout at the time of its annual results in June, having already paid its interim dividend. The final dividend isn't payable until September, it noted
Dixons Carphone added it has two revolving credit facilities totalling GBP1.05 billion, which expire in October 2022, and a term loan of EUR50 million, which expires in October 2020.
"As at March 20, the group had access to a total of over GBP700 million of unutilised facilities," it added.
Dixons Carphone is penned to release its annual results on June 25.
Earlier in March, the company said it will close all of its UK standalone Carphone Warehouse high street stores. The measures would lead to 2,900 redunancies, the company explained.
Shares in the company were 1.4% higher at 81.80 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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