Dixons Carphone says it can prosper despite Brexit

Picture: contributed
Picture: contributed
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Dixons Carphone posted a 
17 per cent advance in yearly pre-tax profits to £447 million yesterday as the electricals and mobile phones major played down economic concerns surrounding the result of Britain’s EU referendum.

Group chief executive Seb James said that despite the poll outcome the Currys and PC World owner will exploit opportunities to expand.

“The nation has spoken and there has been a vote to exit the EU in due course. As you can imagine, we have been giving some thought to this,” James said.

“Our view is that, 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.”

Humphrey Singer, Dixons Carphone’s finance director, said the group’s UK sales had actually increased since Britons voted 52 per cent to 48 per cent to quit the European single trading bloc.

Singer said: “In the four days after the referendum sales were up… so the world keeps turning.” His comments came as Dixons Carphone also hoisted its total dividend 15 per cent to 9.75p (8.5p), courtesy of a 6.5p final payment. The finance director said that the retailer would not be changing plans to invest about £250 million across the business in the 2016/17 financial year.

The group said like-for-like revenue rose 5 per cent in the year to end-April as the company continued to take a greater share of the mobile phone market. Turnover was £9.7 billion.

James also gave an update of the retailer’s plans to expand into the US, saying that about 150 new stores will be rolled out in the country through a joint venture deal with US telecoms group Sprint. The firm plans to eventually open 500 in the US.

The retailer, which also operates in Scandinavia and southern Europe, was born out of a £5 billion mega-merger between Dixons and Carphone Warehouse in 2014.

The group’s shares were hit in the immediate aftermath of the Brexit vote a week ago given its exposure to so-called “big ticket” electrical items and potential vulnerability to any falloff in consumer demand.

Yesterday the shares slipped 2 per cent. They have fallen some 20 per cent over the past week. Alistair Davies, retail analyst with Investec, said: “Near-term uncertainty may impact sentiment, but the business fundamentals remain strong.”