DIXONS Carphone, the retail electronics giant created by the merger this summer of Carphone Warehouse and Currys/PC World, showed the first fruits of the deal yesterday with a strong leap in sales and profits.
The group, which is worth £5 billion on the stock market following the tie-up, hailed a “barnstorming” performance from its core UK stores, while trading remained challenging in its southern European markets, particularly Spain.
Like-for-like sales at Dixons Carphone jumped 11 per cent in its most recent trading quarter as group pro-forma profits lifted 30 per cent to £78 million from £60m on overall revenues up 1 per cent at £5bn in the six months to 1 November.
It said white goods and televisions sold well in Currys and PC World stores, driven by strong demand for high-end TVs due to consumer-friendly offers such as free warranties.
The company said it also benefited from the recent collapse of smaller high street rival, Phones4U. It also claims to have won about one-third of Comet’s customers since that retailer foundered in 2012. Since the end of the period, trading has received a further boost from demand on Black Friday, which was the biggest day in Currys/PC World history. The most popular products included TVs and washing machines.
Most British retailers embraced Black Friday promotions this year, both in store and online, seeking to follow their American counterparts in kickstarting trading early in the key pre-Christmas period.
Humphrey Singer, Dixons Carphone’s finance director, said Black Friday – the day after US Thanksgiving – proved “huge” for the group. He said the day was now rivalling Boxing Day as the company’s biggest trading day of the year. “This, I think, is the new pattern of Christmas trading and we’re all going to have to get used to it,” Singer said.
A Black Friday shopping spree pushed British retail sales growth to a three-month high in November, according to an industry survey published last week. One analyst said: “Dixons Carphone has made a solid start as a merged entity.”
Dixons Carphone made a statutory £20m loss before tax, thanks to the £100m spent on the merger. Lawyer and banker fees alone were about £11m.
The City was impressed, with the shares rising 4 per cent, before closing up 13p, or 3 per cent, at 439.7p.
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