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Published on July 15th, 2020 | by The GC Team

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Dixons Carphone full-year profits cut in half

Dixons Carphone, parent company of Carphone Warehouse and Currys PC World, has reported underlying pre-tax profits of £166 million for its financial year to 2 May 2020, a 51% fall from the £399 million profit of the previous year.

The Group statutory loss before tax of £140 million was largely ascribed to “UK Mobile store closure costs” following the announcement in March this year that all 531 of its Carphone Warehouse standalone stores would close permanently on 3 April. That decision was part of the Group’s attempt to restructure its outdated mobile offering, and was not, it said, COVID-related.

The temporary closure of other stores during lockdown also took its toll, but the company claims it achieved a “robust performance in Electricals despite COVID-19.” The core UK & Ireland Electricals business reported revenue up 1% and posted adjusted earnings before interest & tax (EBIT) of £162 million, 10% down year-on-year. Online sales, understandably, were up, showing a 22% increase year-on-year and a huge 166% increase in the month of April.

The company has been pushing ahead with its transformation programme, and claims “strong progress” on its priority areas, with its omnichannel drive achieving an online in-store sales increase of 64% pre-COVID, and the remodelling of 121 UK stores. On the Mobile front in the UK, the small, standalone store closures were “a significant step towards elimination of losses.”

Group Chief Executive Alex Baldock emphasised that the first ten months of the year  “was a story of delivering on our promises and accelerating the transformation of Dixons Carphone,” but that “with Covid-19, our immediate priorities abruptly changed to keeping everyone safe, helping our customers and securing our future. Our colleagues have delivered on all three, and I thank every one of them for the skill and determination with which they’ve responded. I’m struck by the vital role that technology has played in helping millions of families through this crisis, and I’m proud of how our business has stepped up, online-only outside the Nordics, to provide that help. Since the year end, all our Electricals businesses have continued to grow sales. Where our stores have reopened we’ve performed well, while continuing to see strong online sales growth. That said, we expect a weakening of consumer spending later this year and are being cautious in our planning.

“We’ve learned a lot during this crisis and will emerge a better business from it. We’ve pioneered new ways of shopping, empowered our colleagues to move faster, and seen how technology is set to play an ever-bigger role in everyone’s lives. We’re also more convinced than ever that Dixons Carphone has the right strategy for our customers, our colleagues and our shareholders in the years ahead.”

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