Underlying profit before tax increased to £78 million

Dixons Carphone sees 30% jump in first-half profit

Dixons Carphone has reported a profit of 30 per cent before tax for the 31 weeks ended November 1st, 2014.

Profits were compared with Carphone Warehouse’s 26 week period ending September 28th, 2013 and Dixons Retail’s six month period ending October 31st, 2013.

Group Chief Executive, Sebastian James called the first half year results ‘a symbolic moment in the history of our great new shared enterprise’, which saw underlying profit before tax increased to £78 million.

“We have seen a barnstorming performance from our UK & Ireland division with like-for-like sales growth of 6 per cent in the first half and 11 per cent in Q2,” said James.

“This has been driven by continued improvements in price and service, competitive changes, technology launches and some recovery in the economy.”

James revealed that the business seems to be going better than he ‘dared hoped’, with integrated stores trading well.

The possitive trading statement follows the retailer’s report of a ‘good start’ in its first quarter.

Other highlights from the report include market share gains across electrical and mobile businesses in the UK & Ireland, Nordics and Greece, as well as the disposal of Virgin Mobile France, completed on 4 December 2014, with net cash proceeds of £104 million.

“All in all, this has been a very good half year but there is a lot more of the year to go and a crucial Christmas to come, against a backdrop of big changes in how and when customers do their Christmas shopping,” added James.

Ken Odeluga, senior market analyst at Cityindex, suggests that Dixons Carphone will need to articulate a more detailed strategy in Europe to keep shareholders on board.

"Dixons Carphone seems to spotlight Netherlands and Germany today, calling them “challenging”, and saying it instigated "review and restructure" plans for those operations. However, the group also owns Phone House in Spain and Portugal, and has branches in France," said Odeluga.

"These are all countries where consumer discretionary and non-discretionary margins continue to be squeezed. Further disposals in Europe, like the shrewd one in the sale of ElectroWorld in Sweden during the summer, may make sense and would certainly be applauded by the market."

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