Interim Results for the 26 weeks ended 28th October 2017

  • Strong performance in electricals across the Group with growing revenues, profitability and market share
  • Maintaining scale in UK mobile but profitability challenging. Repositioning mobile business to deliver a simpler, less capital-intensive business
  • Interim dividend 3.5p (2016/17: 3.5p), Board intends to maintain total full year dividend at 11.25p
  • Expect to deliver full year 2017/18 Headline PBT within £360m - £400m range
    • Headline PBT consensus for FY18: range £362m-£420m, average £383m
  • Good start to peak trading with record Black Friday in all geographies

Notes:

  • In the UK&I H1 like-for-like revenues improved by approximately 3% as a result of sales successfully transferred from closed stores
  • See notes on page 3 for an explanation of the basis of preparation and defined terms. This document also uses definitions set out on pages 37 to 41
  • * H1 16/17 UK & Ireland EBIT includes £17m (H1 17/18: £18m) relating to the remaining core of CWS, which has been restated as set out in note 2.

Financial Highlights:

  • Group headline PBT of £61 million (2016/17: £154 million)
    • Includes a negative £58m impact year-on-year from a change in receivables revaluations and insurance contract terms as indicated in August
  • Statutory profit before tax of £42 million (2016/17: £111 million), including non-headline charges of £19 million (2016/17: £43 million). Statutory basic EPS of 3.3p (2016/17: 8.1p)
  • Group H1 like-for-like revenue up 4%; Q2 like-for-like up 3%; statutory revenue for H1 up 3%
  • Group H1 electricals like-for-like up 7%, growth across all markets and market share gains
    • UK&I electricals like-for-like up 6%
    • Nordics like-for-like up 8%
    • Greece like-for-like up 7%
  • UK&I H1 mobile like-for-like down 3%
    • Including the impact of delayed iPhone X launch into second half of financial year
  • Free cash flow of £169 million (2016/17: £64 million) resulting from reduction in capex year-on-year, improved stock management, and favourable timing on working capital
  • Net debt of £206 million (2016/17: £285 million)

Seb James, Group Chief Executive, said:

'Our interim results highlight the continuation of trends that we saw in our Q1 trading update. Overall we have delivered strong free cash flow, expect to deliver full year PBT within the £360m to £400m range and the Board intends to maintain the full year dividend.

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 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.

At this time of year, our 42,000 colleagues go above and beyond the call of duty to support our customers, and I would like to take this opportunity to record my thanks to them for their hard work so far, and, in advance, for what we expect will be a busy Christmas period ahead.'

Quarterly summary

Notes:

  • UK&I electricals like-for-like: Q1 7%, Q2 5% and H1 6%
  • In the UK&I Q2 like-for-like revenues improved by approximately 2% as a result of sales successfully transferred from closed stores, in Q1 this was 4% and in H1 this was 3%.
  • UK&I mobile like-for-like revenue: Q1 flat, Q2 (6)% and H1 (3)%

Investor and analyst presentation and webcast

There will be a management presentation for investors and analysts at the Deutsche Bank offices in London at 9:00 am (GMT) this morning. The presentation slides will be available via webcast (listen only) on our corporate website, www.dixonscarphone.com and there will be an accompanying conference call:

Dial-in details - UK/International: +44(0) 20 3059 8125; passcode: 156444

Seven-day replay - UK/International: +44(0) 121 260 4861; passcode: 2280344 #

Next announcement

The Group will publish a trading update on 23 January 2018 with an accompanying conference call.

For further information

Assad MalicBR> IR, PR & Corporate Affairs DirectorBR> +44 (0) 7414 191 044

Mark ReynoldsBR> Head of Investor RelationsBR> +44 (0) 7979 696 498

Nick Cosgrove, Helen SmithBR> Brunswick GroupBR> +44 (0) 207 404 5959

Information on Dixons Carphone plc is available at www.dixonscarphone.comBR> Follow us on Twitter: @dixonscarphone and @DCSebJ

About Dixons Carphone:

Dixons Carphone plc is Europe's leading specialist electrical and telecommunications retailer and services company, employing over 42,000 people in nine countries.

Focused on helping customers navigate the connected world, Dixons Carphone offers a comprehensive range of electrical and mobile products, connectivity and expert after-sales services from Team Knowhow.

Dixons Carphone's primary brands include Carphone Warehouse and Currys PC World in the UK & Ireland, Elkjøp, Elkjøp Phonehouse, Elgiganten, Elgiganten Phone House, Gigantti and Lefdal in the Nordic countries, Kotsovolos in Greece, and Dixons Travel in a number of UK airports as well as Dublin and Oslo. Our key service brand is Team Knowhow in the UK, Ireland and the Nordics.

Business-to-business (B2B) services are provided through Connected World Services, Currys PC World Business and Carphone Warehouse Business. Connected World Services aims to leverage the Group's existing expertise, operating processes and technology to provide a range of services to businesses.

Notes

(1) Headline results exclude amortisation of acquisition intangibles, Merger integration and transformation costs, businesses to be exited, property rationalisation costs, acquisition-related costs and other one-off, non-recurring items, net interest on defined benefit pension schemes and discontinued operations. Such excluded items are described as 'non-headline'. For further details see notes 3 and 10 to the financial information. Comparatives have been restated following the classification of the iD mobile operations in the Republic of Ireland as businesses to be exited and classification of the Sprint joint venture and Spanish operations as discontinued operations, and are therefore included in non-headline results. For further details see note 13 of the financial information.BR> (2) Change in local currency revenue reflects total revenues on a constant currency and period basis.BR> (3) Like-for-like revenue is calculated based on headline store and internet revenue using constant exchange rates. New stores are included where they have been open for a full financial year both at the beginning and end of the financial period. Revenue from franchise stores are excluded and closed stores are excluded for any period of closure during either period. Customer support agreement, insurance and wholesale revenues along with revenue from Connected World Services and other non-retail businesses are excluded from like-for-like calculations. We consider that LFL revenue represents a useful measure of the trading performance of our underlying and ongoing store and online portfolio.BR> (4) During the period, the reportable segments of the Group have been changed and comparatives restated accordingly. The full year and half year restatements are detailed in note 2 to the financial information.BR> (5) UK & Ireland comprises operations in the UK and Ireland, the Dixons Travel business and the non-honeybee B2B operations which leverage the specialist skills, operating processes and technology of the Group to provide managed services to third parties looking to develop their own connected world solutions. Nordics comprises operations in Norway, Sweden, Finland, Denmark and Iceland. Greece comprises operations in Greece and, for non-headline results, previously disposed operations in the Southern Europe region. honeybee comprises our proprietary IT multi-industry software that simplifies the delivery and management of complex digital customer journeys. These segmental results have been restated as set out in note 2.BR> (6) Free cash flow comprises cash generated from / (utilised by) continuing operations before special pension contributions, less net finance expense, less income tax paid and net capital expenditure. The directors consider that 'free cash flow' provides additional useful information to shareholders in respect of cash generation and is consistent with how business performance is measured internally.BR> (7) Net debt Comprises cash and cash equivalents and short term deposits, less borrowings and finance lease creditors. We consider that this provides a useful measure of the indebtedness of the Group.

Certain statements made in this announcement are forward-looking. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward-looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Information contained on the Dixons Carphone plc website or the Twitter feed does not form part of this announcement and should not be relied on as such.

Dixons Carphone plc published this content on 13 December 2017 and is solely responsible for the information contained herein.
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