Dixons Carphone plc Xmas 2018/19 Trading Statement

Dixons Carphone plc

 

Trading Update for the 10 weeks ended 5 January 2019

 

Good Peak performance in line with expectations

 

·      Group like-for-like revenue up 1%

o  UK & Ireland electricals like-for-like up 2%

§ Share gains across all categories online and instore, offsetting market decline

o  UK & Ireland mobile like-for-like down 7%

§ Continued decline in 24 month postpay market, down 8% in the period

§ Two-year like-for-like flat

o  International like-for-like up 5%; Nordics up 3%; Greece up 19%

§ Gaining or holding share in all territories

·      Stable gross margins across the Group

·      2018/19 Group headline PBT guidance of around £300m unchanged

·      Good early progress on strategy implementation

 

Peak 2018/19 revenue	Reported revenue % change	Local currency % change	Like-for- like   % change1
UK & Ireland electricals	2%	2%	2%
UK & Ireland mobile*	(12)%	(12)%	(7)%
International	4%	5%	5%
Group	flat	flat	1%

                    *Difference between reported and like-for-like sales primarily due to previously announced store closures

 

Alex Baldock, Group Chief Executive, said:

"Peak trading was solid and in line with expectations, producing record sales against a tough backdrop. We continued to grow our leading electrical market positions in all territories, online and instore. In UK mobile, performance was as expected. Overall, our Peak trading was disciplined and well-executed, with stable gross margins.

 

In UK electricals we grew sales, despite a challenging backdrop and a declining market. Sales were strong in all categories, with standout performances in TV (where we drove the supersizing trend), Smart Tech and Gaming. As the first category to benefit from our plans to bring more excitement to our stores, Gaming was the star performer with sales up 60%. Credit and Online contributed strongly, with our Reserve & Collect service having a strong Peak as we started to bring stores and online closer together. And our increased investment in colleagues produced an easier end-to-end customer experience, with improved availability and satisfaction. Our International business, which accounted for almost 40% of our sales, also produced an excellent performance, with Sweden, Denmark and Greece particularly strong.

 

As a result, our full year PBT guidance of around £300m remains unchanged. 

 

We continue to make good early progress with our long term plans to deliver more engaged colleagues, more satisfied customers and a more valuable business for shareholders. It will take time and much hard work to unleash the true potential of this business, but we're on with it. I owe a big thank you to 42,000 capable and committed colleagues for all their tremendous hard work to deliver this resilient Peak performance while getting our transformation underway."

 

 

Operational highlights:

 

UK electricals

·      Record Peak sales across all categories driven by Gaming, Smart Tech, Small Domestic Appliances and Vision

·      Stand out performance from Gaming, up 60% year-on-year

·      Overall product availability up on last year

·      Market share up 30bps with growth across all categories and channels

·      Good Peak on credit with customer base reaching 802,000 versus 711,000 at the half year

·      Online growth of 8% over the period and YTD 28% of total sales, +2ppt year-on-year

 

UK mobile

·      Mobile like-for-like down 7% as expected, impacted by lower volumes of 24 month postpay. Two-year like-for-like was flat in Q3 and like-for-like was down 3% YTD

·      Market share in traditional 24 month postpay held against market declines of 8%. Growth in the new longer than 24 month postpay segment continued, an area we do not currently serve

·      iD Mobile continued its growth with the customer base surpassing 975,000 customers

 

International

·      In the Nordics, particularly strong growth in Sweden and Denmark with good growth in Norway also achieved, more than offsetting a softer market backdrop in Finland

·      Record Black Friday and Peak period with particular strong performances in Gaming, Mobile, Consumer Electronics and Major Domestic Appliances

·      Nordics market share up 20bps with growth across all categories and channels

·      Greece: excellent performance across all categories with particularly strong growth in Mobile, Major Domestic Appliances and Large-Screen TVs

·      International online growth of 22%

 

Investor and analyst call

There will be a conference call for investors and analysts at 7:45am GMT (8:45am CET) this morning

Dial-in details - UK/International: +44(0) 20 3936 2999; passcode: 31 21 93

Seven-day replay - UK/International: +44(0) 20 3936 3001; passcode: 12 95 63

 

Next announcement

The Group will publish its preliminary results on Thursday 20 June 2019

For further information

Assad Malic	Group Corporate Affairs Director	+44 (0) 7414 191 044
Mark Reynolds	Head of Investor Relations	+44 (0) 7979 696 498
Amy Shields	Head of External Communications	+44 (0) 7588 201 442
Tim Danaher, Helen Smith	Brunswick Group	+44 (0) 207 404 5959
Information on Dixons Carphone plc is available at www.dixonscarphone.com
About Dixons Carphone: Dixons Carphone plc is a leading multinational consumer electrical and mobile retailer and services company, employing over 42,000 people in nine countries. We Help Everyone Enjoy Amazing Technology, however they choose to shop with us. We are the market leader in the UK & Ireland, throughout the Nordics and in Greece. With a full range of services and support, we make it easy for our customers to discover, choose and enjoy the right technology for them, throughout the life of the product. Our core multichannel operations are supported by an impressive distribution network and sourcing office in Hong Kong and a state-of-the-art repair facility in Newark, UK. Our brands include Currys PC World and Carphone Warehouse in the UK & Ireland and iD Mobile in the UK; Elkjøp, Elgiganten and Gigantti in the Nordics; and Kotsovolos in Greece. Our Dixons Travel brand has a presence across several UK airports as well as in Dublin and Oslo, and our services are provided through Team Knowhow in the UK, Ireland and the Nordics.

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.

 

¹Like-for-like revenues are calculated based on Headline store and internet sales 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. Revenues 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 other non-retail businesses are excluded from like-for-like calculations. Revenues from Carphone Warehouse stores-within-a-store are included in like-for-like.