Dixons full-year profits up 76% ahead of Carphone Warehouse merger
Electricals retailer Dixons has reported a 76% increase in its full-year pre-tax profits as it looks ahead to its planned merger with Carphone Warehouse.
In the year to 30 April 2014, group underlying pre-tax profit surged to £166.2 million from £94.5 million in the previous year. Total underlying group sales edged up 3% to £7.22 billion with like-for-like sales also rising by 3%.
The group said its UK and Ireland division, which includes Currys and PC World, delivered a strong performance with underlying operating profits rising 24% to £141 million. Like-for-like sales climbed by 5% while total sales increased by 3% to £4.15 billion.
Sebastian James, Dixons group chief executive, said: "This has been a great year for the group with some excellent performances across our multi-channel businesses, together with the achievement of a number of important strategic objectives. Our profits are up 76% from those we reported a year ago.
“This not only reflects the fact we have now exited all of our non-core markets, meaning we are now a leader in all our core markets, but is also a testament to the creativity and hard work of our teams. The group is in robust financial health with further cash generation resulting in a strong net cash position even after the costs incurred in exiting the non-core businesses. Best of all, our customer service metrics have again reached new records.”
He added: “The new financial year has started well, with an uplift in TV sales driven by the World Cup, but we also believe we are seeing the early glimmers of a consumer recovery.”
During the year, Dixons opened new high street formats in Bluewater and Canary Wharf and a new larger format 2-in-1 store in Aylesbury all of which are trialling retailing innovations such as mobile and flexible fittings, new playtables, and showhow areas.
The group also launched a new kitchen department in Thurrock which extends its traditional product range to include items such as cookware, utensils and cooking accessories. More recently it opened Connected World departments in five megastores to showcase its home automation offer which includes heating products, lights and security cameras, as well as some of the latest 'wearable' technology.
Dixons said its Nordic business achieved another record year with underlying sales rising by 2% to £2.79 billion. Like-for-like sales also rose by 2% while underlying operating profits were £116.9 million compared to £125.4 million in the prior year.
The group said its business in Greece delivered an improved performance with some signs of stability returning to the market.
Total sales at the Greek Kotsovolos chain were down 3% at constant exchange rates and flat in sterling at £279.2 million. Like-for-like sales fell by 9% which Dixons said was largely a result of a weak economic environment coupled with a mild summer and the digital switchover benefit in the prior year. Underlying operating loss was £10.5 million compared to a loss of £11 million in the previous year.
James said he was “very excited” about the opportunities that the proposed merger with Carphone Warehouse offered for the group.
He added: “We will build what I hope will be the first and best truly multi-channel proposition that allows customers not only to buy and experience the explosion of new connected products that are emerging, but to also get the advice, connectivity and services that will allow them to use technology as it should be used - to make their lives better.
“In turn, this will allow us profoundly to change the nature of what we do: we will move from a transactional to a lifelong relationship with customers everywhere.”
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