The Share Hunter: Dixons Carphone stands firm on high street
DIXONS Carphone is one of Europe’s leading electrical and telecommunications retailers, employing more than 42,000 people in 11 countries.
Dixons Carphone own Carphone Warehouse and Currys PC World in the UK
The company’s primary brands include Carphone Warehouse and Currys PC World in the UK & Ireland, though they also have operations in Scandinavia and southern Europe.
Latest trading figures for the year showed revenues increased 3 per cent, though reported revenues were held back by sterling’s strength over the year, so were broadly flat at £9.7billion.
Profit before tax increased by more than 17 per cent to £447million. Growth was assisted by the delivery of benefits related to the merger between Carphone Warehouse and Dixons Retail.
The Nordic and southern European regions also saw increasing sales, despite challenging economic conditions. However, earnings before interest and tax in the Nordic countries fell 8 per cent to £79million as prices were cut, costs increased and the Norwegian Krone devalued.
Last year revenues increased by 3 per cent
Southern European headline earnings, meanwhile, rose 13 per cent to £17million. The group propose a final dividend of 6.5p, taking total dividends for the year up 15 per cent, to 9.75p.
CEO Seb James said that volatility regarding the decision to leave the EU is inevitable, but he believes that as the strongest player in their market, the group can expect to find opportunities for additional growth.
Given its position as the “last man standing” on the UK high street when it comes to large-scale supply of electrical items, and the prospects of the recent US joint venture with the mobile network Sprint, the Dixons Carphone group looks to be in reasonable shape.
CEO Seb James hopes the company can find additional opportunities following Brexit
Current expectations are for earnings growth to average around 10 per cent over the next two years. To meet or exceed these expectations, the main challenge will be to cope with the threat of online retailers such as Amazon and eBay.
One key factor in this turf war will be the service and knowledge of the sales staff, as this is one area where the group holds a potential trump card in its battle against the online retailers.