Profits leap at Dixons Carphone - and it isn't worried about Brexit

 
Jake Cordell
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Dixons Carphone has bucked the trend of struggling retailers
Dixons Carphone has bucked the trend of struggling retailers (Source: Getty)

Technology retail giant Dixons Carphone posted strong results after its first full year of trading following the merger of Dixons and Carphone Warehouse.

The figures

Profit before tax at the group rose 17 per cent to £447m in the year to 30 April, as like-for-like sales jumped by five per cent across the group.

Total sales remained broadly unchanged in cash terms at £9.7bn, but were up five per cent on the year on a like-for-like basis.

The UK, Ireland and Nordics remained the strongest regions. The home nations accounted for £6.4bn in sales - six per cent higher on a like-for-like basis, while Scandinavia brought in £2.6bn.

Why it's interesting

Retailers posting strong sales figures is rare news these days. Especially technology retailers with a large high-street presence who have been on a spree of mergers and expansions.

Dixons Carphone has well and truly bucked the trend, with its strongest ever day of trading on the US-imported Black Friday last November.

However, at the moment, everything is seen through the prism of the EU referendum. Domestic companies are some of the worst performing on the stock markets at the moment, as fears over a looming recession grow. At one point on Friday - the first day of trading after the results of the vote were known - its share price was down 43 per cent.

It has since recovered, very slightly, bit is still off by 19 per cent. Analysts had been expecting this strong performance, so it's unclear whether the figures will help make up any more of the lost ground.

However, in his update to the market, chief executive Seb James made clear there is no reason Dixons Carphone cannot capitalise on the uncertainty to extend its lead at the top of the market. They join Legal and General and Rolls-Royce as the latest FTSE 100 company to try to calm investors after the vote to leave.

What Dixons Carphone said:

James welcomed the results as a "momentous year" which took its market share to the highest ever.

In this momentous year we have largely completed our merger activities, driven customer satisfaction and market share to all time highs in virtually all of our markets, made our shops more interactive and exciting while becoming ever more competitive with pure-play retailers, launched a new joint venture in the US, launched a new UK mobile network, and embarked on an ambitious property plan in the UK and Ireland. We also had our biggest ever trading day on Black Friday last year.

On the EU referendum, James added:

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.

In short

A retailer posting record profits on a big expansion drive that isn't worried about the result of the EU referendum. Watch out.

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