In the 52 weeks to May 2, Dixons Carphone reported a 51% drop in adjusted pre-tax profit to £166 million. Dixons Carphone reduced its losses to £140 million, on a statutory basis, compared with £259 million a year ago.
For the UK and Ireland divisions the electrical specialist posted a 1% increase in like-for-like sales while total adjusted EBIT dropped 10% to £162 million. In the period, online sales grew by 22% with a surge of 166% during April as the UK entered lockdown.
The group’s mobile division in the UK and Ireland saw an EBIT loss of £104 million with sales falling by 20%. Earlier this year, Dixons revealed plans to close its 531 standalone Carphone Warehouse stores, with the loss of 2,900 jobs. It said it will instead focus on selling mobile phones through its larger ‘three-in-one’ stores.
“The UK’s leading electrical goods specialist, Dixons Carphone has managed to reverse revenue declines, with UK sales up 1% in the past year; however, profits fell sharply (-51%) in this period. While much of this was the result of COVID-19 disruption, as the group suffered from store closures and heavy competition online, it also reflects the turmoil in its mobile division, and its March 2020 decision to close all standalone Carphone Warehouse stores. Accordingly, the shape of this growth remains similar to previous years, with growth in electricals (1%) and a heavy mobile sales loss (20%); however, with these closures, the group should be more sustainable moving forward.
Nonetheless, the impact of COVID-19 will continue to damage group sales for the year ahead. Despite another year of impressive growth in ecommerce sales (22%), the online market for electricals remains highly competitive, as shown by AO.com’s strong full-year results released today. Accordingly, Dixons Carphone will have to boost market share online if they are to ensure continued growth in the coming year. Within these results, the strong growth in credit sales (27%) is also highly significant, as retailers with a strong credit proposition look set to capitalise in the current climate.”