It's pretty hard to find fault with Dixons Carphone's (DC.) half-year numbers. Revenue rose 11 per cent during the period - or 4 per cent on a like-for-like, constant-currency basis - thanks to market share gains across all territories and the weakening of the pound against the euro and Norwegian krone since the EU referendum. This performance, coupled with ongoing synergies following the 2014 merger, meant operating profit rose 13 per cent to £153m. Excluding one-off costs and discontinued operations, this left pre-tax profit up 19 per cent at £144m.
So why did the shares fall on results day? Perhaps the caution of chief executive Seb James, who said the company has been planning for "more uncertain times ahead" after the Brexit vote. This means cutting costs, and focusing on market share growth. The company says it's hoping to minimise the severity of domestic price rises next year in order to remain competitive for customers. In the first half, the electricals business performed well in the UK and Ireland, with good demand for white goods and consumer electronics only partially offset by lower computing revenue.
Analysts at Liberum expect pre-tax profit of £485m for the year ending April 2017, giving EPS of 30.8p, compared with £447m and 28.4p in FY2016.
| DIXONS CARPHONE (DC.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 349p | MARKET VALUE: | £4.02bn | |
| TOUCH: | 348-349p | 12-MONTH HIGH: | 507p | LOW: 242p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 252p* | NET DEBT: | 10% | |
| Half-year to 29 Oct | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 4.39 | 78 | 4.8 | 3.25 |
| 2016 | 4.87 | 104 | 8.1 | 3.50 |
| % change | +11 | +33 | +69 | +8 |
Ex-div: 29 Dec Payment: 27 Jan *Includes intangible assets of £3.75bn, or 325p a share | ||||
