Good for some: Greek meltdown swells Dixons Carphone's coffers

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Dixons Carphone has made an auspicious start to corporate life together, judging by the first set of full-year preliminary results released today, helped by brisk trade in the UK and panic-buying in crisis-hit Greece.

It seems the gods of retail are smiling on the company as it banked turnover of £9.9bn in the 13 months ended 2 May, up six per cent on the previous fiscal year, but lower than the £10.5bn forecast by analysts.

The UK and Ireland outlets fuelled a seven per cent expansion in sales to £6.45bn, including a two per cent uplift from the additional five weeks of trade from the Carphone side of the house.

The peak shopping season for electronics between Black Friday and into the new year helped beef up the top line in Britain, and the demise of Phones 4U boosted market share – and DixCar's coffers.

Significant foreign exchange rate movements in the Nordics caused sales to fall six per cent to £2.71bn. Outside of that the local business had a “sound year”, said Dixons Carphone.

The firm’s Southern Europe business – Spain and Greece – declined ten per cent to £637m. Again, currency conversions bit down on sales and store closures in Spain added to the downward pressure. Economic woes in Greece actually worked in the company’s favour, with most product categories doing well and punters buying big-ticket items, including large screen TVs, to protect their cash.

“We do however remain very mindful of the uncertain economic and political situation in the country and the effect this may have on our business,” warned DixCar. “The team has been very active in planning for every contingency.”

The Connected World Services division – including devices and airtime – reported sales of £130m, up from £78m in the prior year.

Pro-forma pre-tax profits – excluding the cost of the merger last summer – actually came in above estimates, at £381m. City types had forecast a range between £355m and £375m.

Headline profit after tax came in at £285m but once £188m of exceptional charges, including a £114m loss from discontinued operations – Germany and Portugal – were accounted for, DixCar made a pre-tax profit of £97m.

Group CEO Seb James said the company made progress in its first full financial year.

“The job is far from done. I am acutely aware that there is no room for complacency in a sector which has seen unprecedented change, bringing both opportunities and challenges,” he said.

The integration between Dixons and Carphone cost £9m in the year, and the expected £80m “synergies” cost savings are to be rung out a year earlier than planned, the company said. ®

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