Dixons Carphone Rises as Profit Jumps on Higher U.K. Salesby
Black Friday sales strong with 3.5 million website visits
Merger benefits `becoming increasingly evident': analyst
Dixons Carphone Plc showed how last year’s merger is boosting performance as the British electronics merchant reported first-half sales and profit that beat estimates.
By putting Carphone Warehouse outlets into branches of its Currys and PC World chains, the company has stoked sales of mobile devices across the business. That helped push same-store sales up 4 percent in the U.K. and Ireland during the second quarter. The shares rose as much as 4.9 percent to a record.
“The benefits of the merger are becoming increasingly evident,” Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said by e-mail. “Dixons Carphone is emerging as a clear beneficiary as the ‘Internet of things’ becomes the new order.”
The retailer is answering those critics who labelled last year’s combination of Dixons Retail and Carphone Warehouse a defensive move. Dedicated Carphone Warehouse sections had been added at 261 of 457 Currys and PC World stores by the end of October, giving a boost to performance across all store brands.
“Our integration continues to go well,” Chief Executive Officer Sebastian James said in a statement Wednesday. “The vast majority of the difficult decisions have been made and implemented.”
Sales were strong over the critical Black Friday selling period in late November, with 3.5 million visits to its website on the day, Chief Financial Officer Humphrey Singer said in an interview. Yet demand has ebbed in early December as shoppers take a breath before the final few shopping days before Christmas.
“Now it’s a Christmas with two peaks,” Singer said. “In between the two peaks there will be a valley and we are now in that valley. It’s inevitable with these really big trading periods.” The company will give more details on Christmas sales on Jan. 26 when it reports third-quarter results.
Pretax profit rose 23 percent to 121 million pounds ($182 million) in the six months ended Oct. 31. That exceeded the 109 million-pound median analyst estimate.
The shares gained 2.4 percent to 488.3 pence at 9:51 a.m. in London.
The retailer also said deputy chairman Roger Taylor, the former head of Carphone Warehouse before it merged with Dixons, will leave its board immediately and be replaced by Ian Livingston, who previously ran British phone company BT Group Plc. Tony DeNunzio will also join the board, the company said in a separate statement.
(An earlier version of this story corrected the name of an analyst.)