Dixons warns of '˜uncertain times' despite profit rise

Shares in Dixons Carphone were the biggest faller in the FTSE 100 yesterday as the electrical giant's near-20 per cent jump in half-time profits was overshadowed by a warning of 'more uncertain times'.

The Currys and PC World owner is bracing for uncertain times ahead. Picture: Contributed
The Currys and PC World owner is bracing for uncertain times ahead. Picture: Contributed

The stock gave up 6.6 per cent as the group said that while it had yet to see a knock to consumer confidence from June’s Brexit vote, it was braced for a more unsettled 2017 amid cost pressures following the post-referendum slide in the value of sterling.

Group chief executive Seb James said: “While we have still not seen any effect on consumer demand as a consequence of Brexit, we have been planning for the possibility of more uncertain times ahead.

“We are also planning our offer so that potential currency impacts are minimised for the customer, and are ensuring that next year, as always, everybody can be absolutely sure that they won’t get a better deal anywhere.”

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His comments came as Dixons Carphone posted an underlying pre-tax profit of £144 million for the six months to 29 October, compared with £121m last time, as well as a 5 per cent rise in like-for-like sales in the UK and Ireland.

Black Friday, which fell after its first half, was another record trading day for the group as shoppers snapped up gadgets such as smart fitness and wearable technology, as well as dash cams – the latter capturing footage of car journeys.

The group also announced a new partnership with Perth-based utility group SSE, which owns Scottish Hydro, to develop an interactive platform that will use Dixons Carphone’s software to enable their joint ten million customers “to monitor, control and maintain their homes and appliances at the touch of a button”.

Dixons Carphone added that its services brand, Knowhow, will support the partnership with its comprehensive repair and maintenance infrastructure.

The company, whose main UK brands are Carphone Warehouse, PC World and Currys, reported growth in all its main divisions, including a 23 per cent jump in sales in the Nordic countries, where it benefited from the weaker pound.

James said as part of its planning for less predictable times the retailer had focused on reducing its fixed costbase and was preparing in 2017 for “all eventualities – just in case”.

The stock has fallen by a third this year amid investor concerns over the impact of the weak pound on supplier costs and consumer demand next year.