3rd Jun 2015 09:54
LONDON (Alliance News) - Dixons Carphone PLC Wednesday said it expects pro-forma headline pretax profit for the year to exceed the top end of its guidance, after it reported growth in like-for-like sales in both the fourth quarter of its financial year and in its full year.
The FTSE 100-listed electricals and telecoms retailer said that it expects group pro-forma headline pretax profit to be slightly above the top end of its previously guided range of GBP355 million to GBP375 million for the full year, as it posted like-for-like revenue growth in the 17 weeks to May 2 of 9% and 6% for the full year to the same date.
The UK and Ireland showed the biggest like-for-like rise of 13% in the quarter and 8% in the full year. The Nordics grew 1% in the quarter and 4% in the full year, while Southern Europe grew 8% in the quarter but declined 5% in the full year.
Dixons Carphone, created from the merger last year of Dixons Retail PLC and Carphone Warehouse PLC, said like-for-like revenue growth in the UK & Ireland was boosted by improving momentum over the Christmas period, with both electricals and mobile trading strongly, and from its shop-within-a-shop roll-out.
Since the merged company was formed, Dixons Carphone has been rolling out a 'shop-within-a-shop' initiative, whereby 233 Carphone Warehouse stores are now open within Currys PC World stores. It said that trading in these stores is "very encouraging" to date.
?It looks like largely we are getting incremental sales from the shops-within-a-shop, so [there is] very limited cannibalisation of existing Carphone stores,? Finance Director Humphrey Singer told journalists.
Once the roll-out, which is currently at an average of four stores each week, is complete, every store in the Currys PC World estate will house a Carphone Warehouse.
However, the retailer said that it is still continuing with its programme of reducing the number of Currys PC World stores. ?We?ve had a lot of success in typically closing one of two superstores on any given retail park and enjoying the same amount of trade from the one store as we previously had through the two stores," Singer said.
Meanwhile, Southern Europe also demonstrated a significant sales improvement in the Christmas quarter, driven by a strong like-for-like performance in Greece.
However, like-for-like sales growth was slower in the Nordics due to the impact of the weaker oil price on the Norwegian economy and its currency, as well as a softer consumer backdrop in Finland, although Dixons Carphone said it feels confident that the projects it is undertaking in the region will drive continued good performance in the year ahead and into the future.
Commenting on current trading, Singer warned that the strong like-for-like performance the company experienced in the first quarter of the year during the World Cup will be difficult to beat in the new year, but said that "there will be other events which will help us trade".
"It is a truism that the time to fix the roof is when the sun is shining, and we will pursue continued investment in the business this year to do just that. We are making excellent progress but there is still much to do, and many areas of the business that we want to improve further. Delivery options, IT investment, extending our free warranty programme, further training for our colleagues, Norwegian pricing and others are in our sights to make us stronger in the long term," Chief Executive Sebastian James said in a statement.
Analysts were encouraged by Dixons Carphone's results, with Cantor Fitzgerald noting that it has outperformed its peers in the market. Investec highlighted the strength of the company's earnings growth and cash generation "that gives flexibility to invest in the business/return excess cash to shareholders".
Despite the positive results, shares in Dixons Carphone are down 1.2% at 473.60 pence Wednesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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