Dixons Carphone in line for higher-than-expected profits

3rd June 2015


Dixons Carphone has upgraded its profit forecast following strong sales figures and an increase in market share.  Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors…

The market was anticipating some good news from Dixons Carphone today and the consumer electrical retailer did not disappoint. It reported strong fourth quarter trading and raised its full-year profit guidance. Like-for-like sales in the UK and Ireland rose an impressive 13% and there were gains in market share in the Nordic region and Greece.

Both electrical and mobile sales were strong, with the latter helped by the introduction of more Carphone Warehouse outlets within existing CurrysPCWorld stores. The integration of Dixons and Carphone, following their merger last year, has progressed well but the chief executive said today there were still many areas of the business that he wants to improve. Full year profits are now expected to be slightly above the top end of the £355m-£375m range previously given.

These are good trading figures from Dixons Carphone and we maintain our ‘Buy’ recommendation due to the excellent prospects for further growth. Positives for the company include good levels of consumer confidence, rising disposable incomes in the UK and the opportunities afforded by the merger. The strong rise in the number of mortgage approvals could also herald a boost for retailers such as Dixons Carphone, as homeowners upgrade their household goods.

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