June 29, 2016 / 6:23 AM / 3 years ago

Dixons Carphone says can prosper after Brexit vote

LONDON (Reuters) - Dixons Carphone (DC.L), Britain’s biggest consumer electricals and mobile phone retailer, said on Wednesday it was confident it would continue to grow its market share even if the vote to leave the European Union leads to an economic downturn.

The company, which trades as Carphone Warehouse, Currys and PC World in the UK and Ireland, has been one of the worst hit stocks following last week’s Brexit vote, given its exposure to “big ticket” electrical items and potential vulnerability to any fall off in consumer demand.

But finance chief Humphrey Singer said UK sales had actually increased since Britons voted by 52 percent to 48 percent to quit the bloc.

“In the four days after the referendum sales were up...So the world keeps turning,” he told reporters after Dixons Carphone reported a 17 percent rise in 2015-16 profit and raised its total dividend by 15 percent.

He also said the company would not be changing plans to invest about 250 million pounds across the business in 2016-17.

Shares in Dixons Carphone were down 1.7 percent by 0920 GMT, taking their fall over the last week to 21 percent.

“Near-term uncertainty may impact sentiment (and) consumer confidence, but business fundamentals remain strong,” Investec analyst Alistair Davies said.

Chief Executive Seb James also sought to reassure investors.

“As the strongest player in our market and despite the volatility that is the inevitable consequence of such change, we expect to find opportunities for additional growth and further consolidate our position as the leader in the UK market,” he said.

Singer said management’s experience of navigating financial crises, in Britain in 2008 and more recently in Greece, where it trades as Kotsovolos, gave it confidence.

“The strong do well in these situations,” he said. “We’ll continue to compete very aggressively and there might be some smaller, less strong competitors, who will find it harder to react if there is indeed any kind of downturn.”

Independent operators account for about a quarter of the UK electricals market.

The finance chief also pointed out that Dixons Carphone sources over 90 percent of products sold in Britain in sterling, limiting its exposure to the currency’s post Brexit slide versus the dollar.

A quarter of Dixon Carphone’s business is transacted overseas, predominantly in Nordic countries, where it trades as

Elkjop and El Giganten.

Dixons Carphone met forecasts with an underlying pretax profit of 447 million pounds in the year to April 30, helped by market share gains in all categories and territories and a particularly strong performance from its UK mobile phone business.

Prior to the update analysts were on average forecasting 504 million pounds for 2016-17.

“If there were predictions by analysts out there that we were uncomfortable with, we’d have to say something,” Singer said.

Editing by David Clarke and Jane Merriman

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