Electronics retailer says it has seen "little" impact of consumer demand slowing post-Brexit
Companies: Currys PLC
Dixons Carphone Plc has released interim results for the 6 months to 29 October, reporting solid profit growth of 19%, and outlining its intentions to close 134 stores as it continues to shift towards electrical superstores.
During the period, the FTSE 100 firm saw LFL sales increase 4%, leading to an EBIT of £153m (+13%), pre-tax profit of £144m (+19%), and headline EPS of 10.9p/share - a 45% jump.
Dixons performed particularly well in the Nordic countries, benefitting from the weaker pound, whilst sales in its core UK market also increased, albeit modestly.
The group says it has seen little Brexit side-effects, but stressed it was preparing for the uncertainties of 2017.
Independent Equity Research firm AlphaValue said it was "strong results once again" for the group, with the results beating its expectations and the market's consensus.
"The lfl revenue increased by 4% (vs Q4: +5%, Q3: +5%; our estimate: +2.9%) on the back of strong performance across all geographies. The UK & Ireland retail business was up 4% (vs Q4: +4%, Q3: +5%, our estimate: +3%; the adverse impact due to store refurbishment was offset by sales transferred from store closure program), largely driven by robust demand of white goods (majorly built-in appliances), TVs (mega-site and 4K TVs) and mobile phones."
AlphaValue says the FX tailwinds "+5%; largely due to depreciation of GBP vs Euro and Norwegian Krone" helped boost revenue growth.
Group CEO Seb James said overall it had been a strong start to the year, with LFL sales growth of 4% and PBT growth of 19%.
Mr. James said he was looking forward to 2017, that he remained optimistic about the firm's ability to gain market share in all of its key markets, and that the firm hadn't seen any Brexit side-effects:
"...while 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. 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."
Dixons' share price fell 5% as the market opened on Wednesday.
