Dixons Carphone has posted a £4.9bn revenue from electricals in the UK and Ireland today, as it reaped the benefits of the pandemic-induced tech boom.
Its revenue climbed eight per cent in the UK in the year to 1 May, up from £4.5bn the year before, the group said in its audited annual results this morning.
The group swung to a pre-tax profit of £33m, from a huge loss of £140m the year prior.
Dixons also said that it has reinstated a full year dividend of 3p.
Shares in the retailer opened down this morning to 122p.
Dixons’ total revenue lifted two per cent in like-for-like growth, offset by the impact of high street store closures of its Mobile business, the group said.
Online sales for electricals surged 103 per cent, raking in £4.7bn internationally as “technology has become even more central to people’s lives,” the chief executive of the group, Alex Baldock, said.
In terms of like-for-like growth, Dixons’ electrical division grew 14 per cent – despite key markets like the UK, Ireland, Norway, Denmark and Greece being hit by store closures throughout Covid-19 lockdowns.
Richard Hunter, head of markets at interactive investor, said that the retailer is “well-positioned for further growth”.
“Electrical sales online over the period rose by 103 per cent, with computing being the best performer, driven by both remote working and in-home entertainment resulting from the various lockdowns. Equally promising is the company’s view that the technology market has now structurally increased, with hybrid working likely to become entrenched.
“At the same time, the group’s leading positions in its chosen markets and its multi-channel offering both bode well for the post-pandemic environment.”
Personal finance expert at Money, James Andrews, said: “The retailer had a quick decision to shutter stores that had become unsustainable and move stand-alone Carphone branches into Dixons or Currys PC World stores, also helped the retailer drastically limit its losses.
“The only factor threatening Dixons Carphone’s bounceback once stores can open to full capacity and pre-pandemic levels will depend on customer interest. After a year of consumers spending on tech – particularly home devices during lockdown, it is questionable whether consumers will still invest so highly in tech once the world returns to some sense of normality.”
“A bunch of these trends are here to stay,” CEO Baldock said in a conference this morning, citing how hybrid working will have changed the market more permanently.
A standout in the electricals market was the “explosion of gaming”, Baldock added, which pushed computing tech sales to grow 25 per cent year-on-year.
According to the CEO, the gaming market is now bigger than both music and movies combined.
However, the global chip shortage and international freight and logistics issues have spelled trouble for tech-reliant businesses like Dixons, which Baldock expects to last throughout the year.
“It’s challenging,” the CEO continued, particularly when “more and more industries are ‘smart-ifying'”, as Dixons and other tech groups have to compete with the resource-heavy automotive sector.
Baldock hailed Dixons ‘strong relationship’ with its suppliers but added that inflation is “definitely something to watch”, as it is tied with international logistics hang-ups.