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UPDATE 1-Dixons Carphone reports strong end to financial year
May 24, 2017 / 7:42 AM / 4 months ago

UPDATE 1-Dixons Carphone reports strong end to financial year

(Adds details, comments from conference call)

By Noor Zainab Hussain and Esha Vaish

May 24 (Reuters) - Britain’s Dixons Carphone on Wednesday beat fourth-quarter trading forecasts as it reported growth across its markets and confirmed it expected annual profit to rise by around nine percent.

The company, which trades as Currys, PC World and Carphone Warehouse in its home market, said like-for-like group sales rose 2 percent in the 16 weeks to April 29, its fiscal fourth quarter, better than a company-compiled consensus of 0.9 percent growth.

Like-for-like sales in the UK and Ireland also rose 2 percent in the final quarter, driven by a strong electricals performance, Dixons said, although its phone business was impacted by the deferred release of the Samsung S8 smartphone which was pushed back five weeks.

Chief Executive Officer Sebastian James said the company had not seen any changes in consumer behaviour despite concerns about the impact of Britain’s vote to leave the European Union on spending patterns.

“We’re very vigilant because there’s lots of chatter about how the UK consumer is gloomy or isn’t gloomy.... So far it seems that customers continue to shop in our stores,” he told reporters on a call.

Shares in the company, which also trades under Elkjop and Elgiganten in Nordic countries and Kotsovolos in Greece, were up 2.8 percent at 335.5 pence at 0738 GMT, making it the second largest gainer on London’s midcap index.

Although Dixons Carphone has had a strong run of trading over the last year its shares have lost around a quarter of their value, reflecting its exposure to “big ticket” items and perceived vulnerability to any consumer spending squeeze this year and rising import costs.

“The new cost prices for the new products have come through and I think so far they seem to be reasonable well accepted by the customer,” James said.

Fourth quarter like-for-like sales in the Nordics rose 2 percent, while Southern Europe saw revenue rise 5 percent, with Greece proving a bright spot.

The company narrowed its full-year headline pretax profit to 485-490 million pounds ($628.9 million-$635.3 million) from 475-495 million.

Prior to Wednesday’s update analysts average forecast was for comparable profit of 490 million pounds for 2016-17, up from 447 million in 2015-16. ($1 = 0.7712 pounds) (Additional reporting by James Davey in London; editing by Jason Neely/Keith Weir)

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