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Dixons Carphone says it needs to make more of its multichannel strengths as it looks to boost profitability

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Currys PC World is seeing online sales increase – but profitability fall
Currys PC World is seeing online sales increase – but profitability fall
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Dixons Carphone says it needs to make more of its multichannel strengths as it looks to boost profitability

 

Dixons Carphone today said it needed to make more of its multichannel strengths, investing in staff and in the customer experience, after a year in which profits fell despite growing sales.

 

The retailer said that its electricals – Currys PC World – business sold more consumer electronics and white goods during the year as demand for computing products softened. Online sales grew by double digits, and ahead of the market. But the cost of home delivery and installation hit profitability. In its coming year, Dixons Carphone is budgeting for a contraction in the electricals market. Meanwhile, UK mobile sales, in its Carphone Warehouse business, were flat.

 

Chief executive Alex Baldock said: “We’re number one, maintaining or growing share in each of our markets, with people and scale multichannel capabilities no competitor can rival. We can make more of these strengths, by bringing clear long-term direction that sharpens our focus on our core, and that better joins up both our offer to customers and our business behind the scenes. There’s nothing here that can’t be done, and we expect top and bottom-line benefit of doing it.

 

“Our new leadership team is working at pace to set that direction, and we’ve taken action already to invest more in our colleagues and the customer experience, as well as to improve our performance in the UK.”

 

The update came as the group today reported group revenue of £10.5bn in the year to April 28. That’s 3% up on the same time last year. Like-for-like sales, which strip out the effect of store openings and closures, grew by 4%. UK and Ireland sales of £6.6bn were 1% down on last year, while headline profit for the segment fell to £281m from £417m last time. But sales in the Nordics (+10%) and Greece (+18%) were both well ahead of last time. Across the group, pre-tax profits of £289m were down from £404m, after one-off costs of £93m including costs related to the Dixons and Carphone Warehouse merger, to property rationalisation and to business value writedowns. The retailer said it expected headline pre-tax profit for the current financial year to come in at about £300m.

 

In a nod to the recent hacking of customer data, which led to unauthorised access to 5.9m Dixons Carphone customers’ payment details, Baldock said: “Recent events have underlined that we have plenty of work to do, and it will take time, but I’m even more confident than the day I took the job in our long-term prospects.”

 

In the UK Dixons Carphone operates Currys PC World, a Leading retailer in IRUK Top500 research, Carphone Warehouse, a Top50 retailer, and airport-based retailer Dixons Travel. Its European brands include Elgiganten and Gigantti in the Nordics and Kotsovolos in Greece.

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