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Dixons Carphone - full year results

George Salmon | 21 June 2018 | A A A
Dixons Carphone - full year results

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Currys plc Ordinary 0.1p

Sell: 64.20 | Buy: 64.40 | Change -0.45 (-0.69%)
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Dixons Carphone released a trading update only a few weeks prior to results, so there's not much in full year numbers to surprise investors, although profits in the UK are slightly better than had been feared.

The shares rose 2.5% on the news.

The final dividend is 7.75p per share, which means the full year payment is maintained at 11.25p.

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Full year results

Dixons Carphone sales rose 2% to £10.5bn, as a 4% increase in like-for-like revenue more than offset the impact of store closures. LFL rose 2% in the UK & Ireland, by 9% in the Nordic countries and were 11% ahead in Greece.

As expected pre-tax profit fell from £500m in 2016/17 to £382m in 2017/18 as margins were impacted by tougher conditions in UK & Ireland, namely weak contract phone sales and a changing mix in electricals.

Dixons says computing contributed a lower percentage of sales, and the relative popularity of white goods saw delivery and installation costs climb. This, plus lower profits from customer support and insurance contracts and a revaluation of fees due from networks, saw operating profits fall 32.6% to £281m.

The Nordic and Greek businesses both delivered higher operating profits, which rose to a combined £119m from £99m last year. Market share in both geographies continues to rise.

Group net debt fell £22m to £249m, as free cash flow of £172 (down £6m on last year) and net disposal proceeds of £24m offset outflows from pension contributions and dividend payments.

Looking ahead, the group expects next year's pre-tax profit to fall again, to around £300m in 2018/19. Growth in the international businesses is expected to be outweighed by continued challenges in the UK & Ireland, with higher living wage costs also impacting performance.

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Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.


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