21st Jun 2018 08:41
LONDON (Alliance News) - FTSE 250-listed Dixons Carphone PLC said Thursday that its business has "so much more to go for" after posting a drop in annual profit, as its UK & Ireland business lagged behind its international growth.
For the year to April 28, the electricals and telecommunications retailer said pretax profit fell to GBP289 million from GBP404 million the year before.
Adjusted pretax profit was down to GBP382 million from GBP500 million year-on-year, in line with the company's profit warning in late May.
At the time of the May warning, Dixons said it expected profit to fall as a result of declining market conditions, reduced profit margins, and expensive network contracts in the UK.
Group revenue for the year increased by 3% to GBP10.53 billion from GBP10.25 billion the year before, driven by a good international businesses growth. On a like-for-like basis, group revenue increased 4%.
UK & Ireland revenue was down 1% to GBP6.64 billion, while on a like-for-like basis it registered a 2% increase.
UK electricals delivered 3% like-for-like growth, while UK mobile growth remained flat year-on-year, despite a like-for-like sales drop of 3% in the first half. UK & Ireland profit was GBP281 million, down from GBP417 million the year before.
The company's international business experienced "strong growth" with revenue in the Nordics up 10% to GBP3.47 billion, and up 9% on a like-for-like basis.
In the Nordics, profit increased to GBP101 million from GBP89 million year-on-year.
In Greece, revenue was up 18% to GBP410 million, 11% higher on a like-for-like basis. Greece's headline earnings before interest and taxes was up to GBP18 million from GBP10 million year-on-year.
The company proposed a final dividend of 7.75 pence, keeping its full-year dividend unchanged at 11.25p.
"I'm delighted to be at Dixons Carphone, in a business with so many strengths, and with so much more to go for," Chief Executive Officer Alex Baldock said.
"Recent events have underlined that we have plenty of work to do, and it will take time, but I'm even more confident than the day I took the job in our long-term prospects."
For the year ahead, the company said it expects headline pretax profit to be around GBP300 million - as previously flagged in May - as the international businesses "reinforce their market leadership positions".
"We expect some cost increases in UK electricals, notably National Living Wage and IT depreciation, partially offset by gross margin recovery initiatives, including range optimisation, better availability and reduced levels of markdown," the company said.
The company said has already taken "early action" against expected margin shrinkage with the planned closure of 92 Carphone Warehouse standalone stores.
In a separate announcement, Dixons said Chief Financial Officer Humphrey Singer is stepping down from the company effective Thursday to join the board of Marks & Spencer Group PLC. Clare Pettitt has been appointed as interim CFO until Jonny Mason takes on the role "later this summer".
Non-Executive Director Jock Lennox has also decided to step down from his role on December 31.
Shares in Dixons Carphone were up 2.0% at 194.20p early Thursday, having fallen around 20% in one day alone in the wake of the May profit warning.
Following May's profit warning, and adding to the retailer's woes, the company earlier in June said hackers had attempted to compromise 5.9 million bank cards and successfully stolen 1.2 million customer records.
According to the Times Newspaper the company faces a GBP400 million fine from the UK Information Commissioner's Office for the data breach.
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