Dixons Carphone [IRDX RDXC] today said the start of peak trading had seen sales records broken across its markets, as it unveiled rising sales but falling profits in its half-year results.
The group, which trades as Dixons PC World and as Carphone Warehouse, reported group sales of £4.9bn in the six months to October 28. That’s 3% up on the same time last year. Sales in the UK and Ireland came in at £3.0bn, 2% less than last year, but 2% ahead on a like-for-like basis that strips out the effect of store openings and closures. Pre-tax profits came in at £42m, down from £111m a year earlier. Electricals sales were up across its markets, including by +6% LFL in the UK and Ireland, as sales transferred from closed stores, but mobile sales were down (-3% UK & Ireland). Both Currys and PC World are Leading retailers in IRUK Top500 research, while Carphone Warehouse is a Top50 company.
In the UK, said the company, the launch of next-day delivery helped to keep white goods sales strong at Currys PC World. Since then it has gone on to launch same day delivery.
Group chief executive Set James said: “I am encouraged by the continued achievements in our electricals businesses across the group with like-for-like sales up 7% and growth in revenues, market share, customer satisfaction and profitability in these markets thanks to our commitment to retail innovation and to serving customers well.
“As we said in August, the UK postpay mobile phone market is tougher, with a combination of higher handset costs and relatively incremental technology growth continuing to cause customers to hold on to their handsets for longer and some to choose a SIMO [SIM only] contract in the meantime. In addition, the later launch of the iPhone X pushed some sales into the second half of our financial year. Throughout the period, we made a very conscious decision to fight hard to drive sales in our product offering, and this has impacted mobile profitability. Vitally, though, these actions have helped maintain scale, reinforce our position as market leader, and ensure our relevance to the customer.
“We recognise that the performance of the mobile division needs addressing, and are taking action to adapt our model in order to cement our place in a changing world. We will update the market on these developments in due course, but we believe that we can, over time, reduce the complexity and capital intensity of our mobile business model, and increase the simplicity and profitability of what we do.
“The start to peak trading has gone well with sales records being broken in all territories. Everywhere, we have seen material share gain and this shows that our retail businesses continue to be able to entice customers into buying the amazing new technologies that we offer. We must remember, though, that there is plenty of peak left to go.”
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- Image courtesy of Dixons Carphone