Retail: Dixons and Carphone Warehouse post strong growth ahead of merger

Andrew Harrison of Carphone Warehouse, left, and Sebastian, chief executive of Dixons Retail. Andrew Harrison of Carphone Warehouse, left, and Sebastian, chief executive of Dixons Retail.

Thursday, June 26, 2014
9:00 AM

Carphone Warehouse said today it was approaching its £3.6billion tie-up with PC World and Currys owner Dixons from a “position of strength” as the two merger partners delivered separate results for the final time today.

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Dixons Carphone is set to be created before the end of September and aims to tap into the way technology is transforming modern households through the increasing overlap of the mobile phone and electrical goods sectors.

Carphone said a 14% rise in its underlying earnings to £151million was in line with guidance for the year to March 29 after like-for-like revenues grew 5.3%.

Dixons Retail Group said its profits increased by 76% to £166.2m, with same-store sales in the UK and Ireland up 5% and underlying profits for the region up 24% to £141m in the year to April 30.

Its boss, Sebastian James, who will be chief executive of the enlarged group, said Dixons was stronger than it has been for a number of years and “well positioned to set sail into new waters.”

He said the new financial year has started well, with an uplift in TV sales driven by the World Cup and the early glimmers of a consumer recovery.

Mr James added: “On this there is no certainty just yet, but what we know for sure is that if we maintain a tight rein on costs, our pricing sharp - against all comers - and our service levels high, customers will continue to choose us over others.”

Carphone reported good performances in the UK, Spain and Ireland, offset by tougher mainland European markets including the Netherlands and Germany.

Chief executive Andrew Harrison said Carphone was approaching the merger from a “position of strength” as the speed, range of new devices, increased data usage and new 4G tariffs have increased its appeal.

He said 4G was a major new dynamic in the mobile marketplace as network infrastructure is rolled out more widely across the UK market.

Mr Harrison added: “The significantly improved network quality and download speeds have encouraged customers to take richer data packages, which in turn drive increases in monthly line rental.”

The new group will have combined sales of £12 billion and more than 43,000 staff at almost 3,000 stores, including more than 1,300 in the UK.

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