Dixons Carphone reported a strong finish to 2015, with like-for-like revenues up 5 percent year-on-year in the 10 weeks ended 9 January 2016. Sales in the UK & Ireland rose 5 percent, its Nordic markets grew by 3 percent, and Southern Europe was up 9 percent. As a result, the retailer expected to report headline pretax profit for the year of GBP 440-450 million, slightly ahead of the market consensus. In addition to the benefits of the Dixons and Cartphone Warehouse merger, the company said it was winning market share in the UK mobile market and benefited from a strong Black Friday campaign.
Looking ahead, the company said it plans a major upgrade of its shops in the UK and Ireland to the 3-in-1 format. This will involve merging the remaining PC World and Currys stores and inserting a Carphone Warehouse. While this will reduce store numbers by 134, the company expects the impact on sales and employee numbers will be neutral or better. The refurbishment will add an extra GBP 50 million capex and GBP 70 million in writedowns. The cost savings should add around GBP 20 million to annual earnings in future.
The company also reported success with its pilot with Sprint in the US and the joint venture will now go into full production towards its target of 500 stores. The company also extended an agreement with a major US manufacturer to implement honeyBee for two US networks in their retail stores, and in the UK it signed a significant distribution agreement with TalkTalk.
