Britain's Dixons Carphone warns on profit due to coronavirus pandemic

LONDON (Reuters) - Electricals retailer Dixons Carphone DC.L warned on Thursday it would not meet its previous guidance for 2019-20 profit and debt due to the coronavirus emergency which has forced the closure of its stores in Britain, Ireland and Greece.

FILE PHOTO - A sign displays the logo of Dixons Carphone at the company headquarters in London, Britain August 1, 2017. REUTERS/Neil Hall

The UK group’s previous guidance was for adjusted pretax profit of 210 million pounds and lower net debt year-on-year. It said it will not update current year or medium-term guidance until the impact of COVID-19 becomes clearer.

Dixons Carphone has, however, seen a jump in sales as people buy equipment to work from home. It said that in the 11 weeks to March 21 electricals like-for-like sales rose 8%, reflecting a strong recent uplift - up 23% in the last three weeks.

“We have seen very good sales of equipment for home working (laptops, printers), for home entertainment (TVs, gaming) and for home living (fridges, freezers, kitchen appliances),” it said.

The group said almost all its stores in the Nordics continue to trade and its online operations remain open.

It said online trading has been very strong in all countries over the last two weeks as people have been buying technology to work from home during the crisis.

“Early signs are that this strong trading has continued since stores closed and will help to compensate for lost store sales,” it said.

Overall group like-for-like sales were up 4% over the eleven weeks, held back by a 15% fall in mobile phone sales.

Shares in the group were up 2.2% at 0917 GMT, paring losses so far this year to 43%.

Earlier this month Dixons Retail said it would close 531 standalone Carphone Warehouse stores and shed 2,900 jobs. The Carphone Warehouse business is loss-making.

Dixons said those job cuts will proceed as they are not related to the coronavirus outbreak.

Dixons Carphone said it was taking measures to preserve cash during the crisis by taking advantage of government support, controlling discretionary spending, lowering capital expenditure, reducing stock ordering and deferring tax payments.

It will decide whether to pay a final dividend in June.

Reporting by James Davey; editing by Sarah Young and Emelia Sithole-Matarise