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Dixons Carphone still looks cheap, even with Brexit risks

The electricals retailer is doing all it can to fight back against Brexit-related scaremongering
December 14, 2016

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.

IC TIP: Buy at 349p

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.

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