http://www.proactiveinvestors.co.uk Proactiveinvestors RSS feed en Fri, 17 Aug 2018 15:53:59 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Dixons Carphone says about 10mln customers records may have been obtained in 2017 cyber-attack ]]> http://www.proactiveinvestors.co.uk/companies/news/201908/dixons-carphone-says-about-10mln-customers-records-may-have-been-obtained-in-2017-cyber-attack-201908.html Dixons Carphone Plc (LON:DC) said on Tuesday that about 10mln records containing personal data of customers may have been obtained in a cyber-attack in 2017, much higher than its earlier estimates.

The electricals and mobile phone retailer, which has become the victim of a major cyber-attack for the second time in three years, said the hack investigation is nearly complete and there is now evidence that some of the data may have left its systems.

READ: Dixons Carphone shares rally as slump in annual profits as expected, turnaround to take time

However, Dixons Carphone said the customer records do not contain payment card or bank account details and there is no evidence that any fraud has resulted from the incident.

In June, the company said an investigation revealed there was an attempt, going back to July last year, to compromise data on 5.9mln credit cards in one of the processing systems of Currys PC World and Dixons Travel stores.

Last month, Britain's National Crime Agency said it was heading a criminal investigation into the hack, working with the National Cyber Security Centre, the Financial Conduct Authority and Britain's data protection regulator.

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Tue, 31 Jul 2018 09:30:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/201908/dixons-carphone-says-about-10mln-customers-records-may-have-been-obtained-in-2017-cyber-attack-201908.html
<![CDATA[News - Credit Suisse remains cautious on Dixons Carphone, believes risks on the downside if mix deterioration continues ]]> http://www.proactiveinvestors.co.uk/companies/news/199574/credit-suisse-remains-cautious-on-dixons-carphone-believes-risks-on-the-downside-if-mix-deterioration-continues-199574.html Credit Suisse remains cautious on electricals retailer Dixons Carphone PLC (LON:DC.) as, although management has "kitchen-sinked" current year guidance, it believes risks are on the downside if the fourth-quarter mix deterioration continues.

Following a transfer of coverage, new analyst Simon Irwin has assumed a ‘neutral’ stance and an unchanged 190p price target on Dixons Carphone shares.

READ: Dixons Carphone shares rally as slump in annual profits as expected

In mid-morning trading, the FTSE 250-listed stock was down 1.3% at 197.25p.

In a note to clients, the analyst said: “There is rarely any rush to buy into retail restructuring stories and Dixons does not feel it is any exception.

“There are no further "magic bullets" from competitor exits and a fully developed new UK strategy is presumably reliant on completion of the mobile network renegotiations, where there is no guarantee of a successful outcome.”

Irwin added that with mobile barely profitable, he assumes that further store downsizing beyond this year's 92 Carphone Warehouse (CPW) store closures are probable.

He said: “The strategy (for now) is primarily based on better execution and while there are always opportunities for improvement, which can be meaningful in a low margin business, it doesn't feel as through service levels in either Dixons or CPW are so bad that there are easy low hanging fruit.”

The analyst pointed out that he is leaving current year forecasts for Dixons Carphone largely unchanged, but has slowed estimates for the earnings per share recovery in future years.

He concluded; “The shares should see some support from the 5.7% dividend yield and c6% FCF yield, however leverage is relatively high (3.5x lease adj net debt/EBITDAR) and we don't believe that the dividend (c60% payout) would be safe in the event of any further margin pressure or need for restructuring.”

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Tue, 26 Jun 2018 10:29:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/199574/credit-suisse-remains-cautious-on-dixons-carphone-believes-risks-on-the-downside-if-mix-deterioration-continues-199574.html
<![CDATA[Media files - Interactive Investor’s Richard Hunter on Dixons Carphone profit slump ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/9666/interactive-investors-richard-hunter-on-dixons-carphone-profit-slump-9666.html Fri, 22 Jun 2018 15:50:00 +0100 http://www.proactiveinvestors.co.uk/companies/stocktube/9666/interactive-investors-richard-hunter-on-dixons-carphone-profit-slump-9666.html <![CDATA[News - Dixons Carphone future remains uncertain as Amazon effect takes over retail ]]> http://www.proactiveinvestors.co.uk/companies/news/199324/dixons-carphone-future-remains-uncertain-as-amazon-effect-takes-over-retail-199324.html Dixons Carphone PLC (LON:DC.) joins a growing list of retailers that have been hit by the so-called Amazon effect.

The Amazon effect describes the impact the digital marketplace is having on the way consumers shop. More and more consumers are shunning physical retail stores and making purchases online.

READ: Dixons Carphone shares plunge as it warns current year profit to drop by 21%, to close shops

While this trend is nothing new, the question is whether high street stores like Dixons Carphone will cease to exist in the future.

Let’s face it - how many people can say they still go into stores to buy electrical goods and mobile phones?

Dixons Carphone has acknowledged the decline in footfall with plans to shut 92 Carphone Warehouse stores this year. It will invest in the stores that remain open. 

“This move, which is aimed at playing to the group’s main strength as the UK’s last electrical retailer that can offer customers the option to try before they buy, makes sense,” said George Salmon, equity analyst at Hargreaves Lansdown.

“However, the scale of the challenges in front of Dixons means there’s more work to be done before profits start moving in the right direction again.”

Dixons Carphone is not the only retailer facing difficult times.

The tough retail market got the better of Maplin and Toys R Us earlier this year when they collapsed into administration, while Debenhams PLC (LON:DEB), House of Fraser, Marks and Spencer Group Plc (LON:MKS) and Next PLC (LON:NXT) have all announced plans to shut down stores following sluggish sales. 

Tough road ahead for Dixons Carphone

New Dixons Carphone chief executive Alex Baldock has admitted the turnaround of the business won’t be easy, saying there is “plenty of work to do, and it will take time”.

The company posted a 24% drop in pre-tax profits to £382mln in the year to 28 April 2018.

READ: Dixons Carphone warns turnaround will take time as it posts slump in annual profits

It anticipates a further fall in profits in the current fiscal year to £300mln due to an expected contraction in the UK electricals markets and higher minimum wage requirements.

Analysts at Liberum said: "While new management is taking sensible action, uncertainty remains on earnings visibility and the future shape of the Carphone Warehouse business, in particular.”

The analysts said key questions about the future of Carphone Warehouse include: what model will be adopted; how profitable it will be and how sustainable growth will be; and how management ensures the business keeps its position in the value chain.

'All is not lost', says analyst

But Richard Hunter, head of markets at Interactive Investor, believes all is not lost.

“As the group maintained some of its market-leading positions, overall revenue edged up, there was a reduction in net debt and the Nordics region made a strong contribution,” he said of the full year results.

“Meanwhile, the cash generative ability of the business enabled the dividend to be maintained, where a yield of 6% has clear attractions to income seekers.

“Double-digit growth in online sales could be a positive precursor to future prospects, whilst also complementing the in-store option of knowledgeable customer facing staff.”

Russ Mould, investment director at AJ Bell, also sees positives for the company.

He said: “If you take a step back and view the company from a broad perspective; it is still making money, the business isn’t highly leveraged, and there is a strong market for people who want to go into a shop and talk to experts about electronic products rather than simply buy one from Amazon just to save a few quid. Therefore it cannot be lumped in with some retailers in a more desperate state such as Debenhams.”

That being said, Mould reckons Dixons Carphone could improve its performance by achieving stronger cash flows and finding a way to breathe life back into its struggling mobile phone retail business.

Some risks out of management's control

Dixons Carphone said the mobile phone market remains “challenging” with fewer customers signing up to new contracts to upgrade their handsets.

Weaker consumer confidence has also not helped the situation.   

“While we appreciate the new management’s stance, the group’s fate, to a certain extent, is out of its control,” said Helal Miah, investment research analyst at The Share Centre.

“The main issue is the state of the UK high street and consumer confidence levels in the face of only modest real wages increases and macro-economic uncertainties.”

Miah thinks Dixons Carphone’s decision to reduce the number of stores is a good start but believes it will be “paramount” that the group’s online offering is on the same playing field as rivals.  

He said The Share Centre "remains wary of the retail environment" which has "very few" retailers left on its ‘buy list’ and this is unlikely to change in the near term.

“We no longer have a formal recommendation on Dixons Carphone, but anyone investing in the company will be taking a high risk contrarian approach and must feel that the group can stand up to the giants of online retailing.” 

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Thu, 21 Jun 2018 12:26:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/199324/dixons-carphone-future-remains-uncertain-as-amazon-effect-takes-over-retail-199324.html
<![CDATA[News - Dixons Carphone shares rally as slump in annual profits as expected, turnaround to take time ]]> http://www.proactiveinvestors.co.uk/companies/news/199294/dixons-carphone-shares-rally-as-slump-in-annual-profits-as-expected-turnaround-to-take-time-199294.html Dixons Carphone Plc (LON:DC.) shares bounced higher on Thursday as a 24% drop in the electricals retailer's annual pre-tax profit proved as expected, although its boss warned that it will take time to turn around the business.

The FTSE 250-listed firm's headline pre-tax profit fell to £382mln in the year to 28 April 2018, down from from £500mln the previous year, with the stores group blaming weaker margins in UK mobile and electrical goods.

WATCH: Interactive Investor’s Richard Hunter on Dixons Carphone profit slump

Dixons Carphone's revenue rose by 3% to £10.5bn from £10.2bn on a reported basis while like-for-like sales grew 4%. In the UK & Ireland business, revenue fell by 1% to £6.6bn, reflecting flat sales of post-pay mobile phone contracts and a softer computing market.

The company said UK gross margins came under pressure from higher costs in providing home delivery and installation services for electrical goods as well as contractual commitments with mobile phone networks. The group's international business achieved a stronger performance, however,with like-for-like sales up 9% in the Nordics and up 11% in Greece.

Richard Hunter, head of markets at Interactive Investors. commented: "Last month’s profit warning may have removed some of the sting, but these numbers nonetheless make for some fairly grim reading. The anticipated 28% decline in pre-tax profit was accompanied by a drop in earnings per share, with gross margins coming under pressure."

He added: "There are also wider concerns regarding the sector, with phone upgrades lessening, the UK consumer potentially retrenching when considering big ticket purchases, and Dixons Carphone’s reliance on customer-facing staff an additional cost burden which digital direct businesses do not face. Meanwhile, the outlook profit number for next year has been reduced even further, as guided by the company in May."

The company. however, maintained its full-year dividend at 11.25p, representing a yield of about 6%. Free cash flow fell to £172mln from £178mln and net debt, but cut by £22mln to £271mln.

In late afternoon trading, Dixons Carphone shares were up 2.8% to 196.15p. 

Hunter concluded: "Dixons Carphone is at an inflection point and, to some extent, has bought itself some time with investors by guiding down next year’s profit. Even so, the more recent improvement in the share price – a 10% hike in the last three months – cannot mask a more reflective dip of 37% over the last year, as compared to a 6% jump for the wider FTSE250. The company has much to prove in a difficult environment and the general market consensus of the shares is likely to remain stuck at a hold, albeit a strong one.”

'Plenty of work to do', says new CEO

Dixons Carphone also said it expects pre-tax profit in the 2018/19 financial year to fall to £300mln, confirming the guidance provided in a trading update last month. It added that current year profits will be weighed down by an increase in costs in the UK electricals arm due to higher minimum wage requirements and IT depreciation.

READ: Dixons Carphone shares plunge as it warns current year profit to drop by 21%, to close shops

Dixons Carphone chief executive Alex Baldock said: “Recent events have underlined that we have plenty of work to do, and it will take time, but I'm even more confident than the day I took the job in our long-term prospects."

Baldock, who took over as chief executive from Sebastian James in April, is carrying out a major restructuring of the company with plans to shut 92 stores this year in response to an increase in consumers opting to shop online.  

His plans hit a snag last week, however, when the company revealed that millions of its customers had their card and personal details hacked. The group is investigating the issue, which started in July last year.  

Management 'taking sensible action', says Liberum analyst

In a note to clients, analysts at Liberum Capital commented: "While new management is taking sensible action, uncertainty remains on earnings visibility and the future shape of the Carphone Warehouse business, in particular.

"A fuller strategic update in December should provide the opportunity for a detailed re-appraisal of the investment case."

Liberum left its rating on Dixons Carphone at 'hold' and maintained its target price at 195p.

-- Updates share price -- 

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Thu, 21 Jun 2018 07:55:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/199294/dixons-carphone-shares-rally-as-slump-in-annual-profits-as-expected-turnaround-to-take-time-199294.html
<![CDATA[News - Dixons Carphone narrowly avoids massive GDPR fine as data breach adds more misery ]]> http://www.proactiveinvestors.co.uk/companies/news/198780/dixons-carphone-narrowly-avoids-massive-gdpr-fine-as-data-breach-adds-more-misery-198780.html Dixons Carphone PLC (LON:DC.) has narrowly avoided a giant fine under the recently introduced European General Data Protection Regulation (GDPR) following a massive data breach.

The FTSE 250-consumer electronics retailer revealed this morning that it had been the victim of a massive data breach over the last year in which attempts were made to compromise 5.9mln customer bank cards, along with 1.2mln personal data records.

READ: Millions of Dixons Carphone customer records hacked

While Dixons has said there is currently no evidence of any fraud arising from the breach, it may still be subject to a fine for what seemed by many to be a breach that took far too long to discover.

However, one saving grace for the company will be the timing of the breach, which occurred before 25 May, the day the GDPR came into force.

Under previous data protection rules, to which the company will be subject due to the timing of the breach, the maximum imposable fine is £500,000, whereas under the new EU regulations firms can face fines of up to £17.6mln (€20mln) for a major data breach.

The market has reacted predictably to the news, with Dixon’s shares falling 4.1% to 189.6p in late-morning trading on Wednesday.

Commenting on the announcement, Mike van Dulken, head of research at Accendo Markets, struck a somewhat fatalist note on events: “In this data-fuelled world where we’re happy to entrust it to companies (and the ether) it has become a valuable commodity, as much for targeted advertising as for fraudsters. In which case we should be able to assume it is held securely. Very securely. After all, isn’t that what we opted for in that May deluge of emails from every company we ever dealt with, and what we sign along the dotted line for each time we enter into a new contract.”

He added: “In this new era of big data, are we simply resigned to the fact that breaches are more commonplace and may happen, and just hope for the best.”

READ: Dixons Carphone shares plunge as it warns current year profit to drop by 21%, to close shops

The data breach will add more gloom to what has already been a miserable few months for the company, which saw its share price plunge 20.5% toward the end of May after it warned profits for the current year would fall 21% alongside a plan to close 92 Carphone Warehouse stores as a cost saving measure.

Russ Mould, investment director at AJ Bell, said that following a reset of expectations as a result of the profit warning, a further deterioration in trading outlook as a result of the data breach is unlikely to attract much sympathy from the market.

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Wed, 13 Jun 2018 11:50:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/198780/dixons-carphone-narrowly-avoids-massive-gdpr-fine-as-data-breach-adds-more-misery-198780.html
<![CDATA[News - Millions of Dixons Carphone customer records hacked ]]> http://www.proactiveinvestors.co.uk/companies/news/198761/millions-of-dixons-carphone-customer-records-hacked-198761.html Millions of Dixons Carphone Plc (LON:DC.) customers have had their card and personal details hacked, the electronics retailer has revealed.

The FTSE 250 group has launched an investigation after hackers accessed the credit and debit card details of 5.9mln Currys PC World and Dixons Travel customers.

Most of these cards are secured by chip and pin technology, Dixons Carphone said, but 105,000 which do not have been compromised. The relevant card companies have been informed and there is no evidence of any fraud at the moment.

The personal details – such as names, addresses, email addresses etc – of a further 1.2mln customers have also been accessed. Again, there is no sign that this information has been used fraudulently at this stage, Dixons said.

'We've fallen short'

“We are extremely disappointed and sorry for any upset this may cause,” said chief executive Alex Baldock.

“The protection of our data has to be at the heart of our business, and we’ve fallen short here.

“We’ve taken action to close off this unauthorised access and though we have currently no evidence of fraud as a result of these incidents, we are taking this extremely seriously.”

He added: “We are determined to put this right and are taking steps to do so; we promptly launched an investigation, engaged leading cyber security experts, added extra security measures to our systems and will be communicating directly with those affected.”

Not the only company targeted

Dixons Carphone isn’t the only company to be targeted in recent years as cyber-attacks become more common.

Yahoo’s UK arm was fined on Tuesday by UK authorities over a data breach affecting more than 500mln users. That incident happened back in 2014 but wasn’t reported until two years after.

Talktalk Telecom Group PLC (LON:TALK) was hit with a £400,000 fine back in 2016 following the theft of personal data of almost 157,000 customers.

Equifax Inc (NYSE:EFX) shares plunged last September after the US credit score giant announced that around 150mln – mostly in the US – had their private information compromised, including social security numbers, birth dates and addresses.

Dixons shares fell 4.5% at the opening bell in London to 188.2p.

--Updates for share price and additional info--

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Wed, 13 Jun 2018 07:57:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/198761/millions-of-dixons-carphone-customer-records-hacked-198761.html
<![CDATA[News - Dixons Carphone shares plunge as it warns current year profit to drop by 21%, to close shops ]]> http://www.proactiveinvestors.co.uk/companies/news/197798/dixons-carphone-shares-plunge-as-it-warns-current-year-profit-to-drop-by-21-to-close-shops-197798.html Dixons Carphone Plc (LON:DC.) shares dived 18% in early trading on Tuesday after the electrical goods retailer warned that its current year profit will fall by 21% as its new chief executive cautioned that he needs to fix problems and close shops.

In a statement, the FTSE 250-listed firm said it expects its headline pre-tax profit for the 2018/19 financial year to be around £300mln, down from the £382mln it is forecasting for the 12 months ended 28 April 2018.

READ: Dixons Carphone dumps loss-making honeybee software unit on US tech firm Synchronoss

The group’s chief executive Alex Baldock - who joined two months ago from online retailer Shop Direct - said that he planned to cut costs to help Dixons Carphone recover and has already started a process to simplify its processes.

As part of the cost-saving measures, Baldock said he planned to close 92 Carphone Warehouse standalone stores this year to help improve gross margins.

The new boss added: As in 2017/18, we are budgeting for a contraction in the UK electricals market and will use our scale to maintain our market share.

“We expect some cost increases in UK electricals, notably National Living Wage and IT depreciation, partially offset by gross margin recovery initiatives, including range optimisation, better availability and reduced levels of markdown.”

“Though there's plenty to fix, it's all fixable”

Baldock concluded: "Eight weeks in the business have cemented my optimism about Dixons Carphone's long-term prospects. I've found exceptional strengths, and though there's plenty to fix, it's all fixable.”

Dixons Carphone said its full-year group revenue was up 3% year-on-year in the 16 weekend ended April 28, with like-for-like sales up 4%.

The firm said UK & Ireland full year like-for-like revenue in the 16 week period was up 2%, and ahead 1% in the fourth-quarter, while its international business saw strong growth.

The group said it intends to maintain its full-year dividend at 11.25p.

Sharp share price drop

In early morning trading, Dixons Carphone shares were down 18.6% at 190p.

Independent retail guru Nick Bubb commented: “The share price of Dixons Carphone has been recovering strongly since new CEO Alex Baldock took over, on the back of vibes about strong trading ahead of the World Cup.

“But, out of the blue, the company has come out with a profit warning today!”

He added: “The issue appears to be that although headline of PBT of £382m for y/e April will hit City expectations that will be only down to an odd one-off £25m systems implementation benefit, given gross margin pressures in Q4.”

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Tue, 29 May 2018 08:02:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/197798/dixons-carphone-shares-plunge-as-it-warns-current-year-profit-to-drop-by-21-to-close-shops-197798.html
<![CDATA[News - Dixons Carphone appoints Clare Pettitt as interim finance chief ]]> http://www.proactiveinvestors.co.uk/companies/news/197391/dixons-carphone-appoints-clare-pettitt-as-interim-finance-chief-197391.html Dixons Carphone Plc (LON:DC.) has confirmed Clare Pettitt will take up the role of interim group chief financial officer after Humphrey Singer announced he is stepping down to join Marks & Spencer Group PLC (LON:MKS).

Pettitt, who has been at electrical goods retailer since 2013 and held the position of group financial controller, begins effective immediately.

She will stand in until Jonny Mason, the finance chief at cycle shop Halfords PLC (LON:HFD), joins as the group chief financial officer at a date yet to be confirmed.

READ: M&S appoints former Dixons Carphone UK boss as non-executive director

Dixons said Humphrey will remain in the business and as a board director until his departure at the end of June. Humphrey is replacing Helen Weir as finance chief at M&S.

M&S said on Monday that it had appointed Dixon’s former head of its UK and Ireland business, Katie Bickerstaffe, as a non-executive director to its board.

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Mon, 21 May 2018 15:59:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/197391/dixons-carphone-appoints-clare-pettitt-as-interim-finance-chief-197391.html
<![CDATA[News - RBC Capital ups target for Dixons Carphone, reiterates positive view on strong market position ]]> http://www.proactiveinvestors.co.uk/companies/news/197275/rbc-capital-ups-target-for-dixons-carphone-reiterates-positive-view-on-strong-market-position-197275.html RBC Capital has raised its price target for Dixons Carphone Plc (LON:DC.) and reiterated its positive view on the electricals retailer which is under new management.

The Canadian broker upped its target for the FTSE 250-listed firm to 250p from 230p and repeated an ‘outperform’ rating on the stock.

READ: Dixons Carphone dumps loss-making honeybee software unit on US tech firm Synchronoss

Dixons Carphone’s shares were trading at 230.4p in mid-morning trading on Friday, up 1.1% on the previous session’s close.

In a note to clients, RBC’s analysts said the target hike came after they have raised their earnings per share forecasts by 2%-6% following Dixons Carphone’s sale of its loss-making honeybee software business.

They added: “Dixons Carphone has a very strong market position in both the UK and Northern Europe, and we think it should show strong momentum in consumer electronics heading into the new financial year.”

Mobile business still facing challenges

The analysts noted that Dixons Carphone’s smaller mobile business is still facing challenging industry headwinds but they expect the group to manage the cost base down and lower its working capital intensity over time.

“DC should also benefit from further cost savings in the UK (e.g., lower rents) and from new warehousing in the Nordic area,” the analysts added.

Dixons Carphone - which owns Curry's and PC World stores in the UK - will report its full-year results on June 21 and the analysts expect these to show evidence of strong recent trading in Electricals.

They concluded: “We also expect new CEO Alex Baldock to talk about the new structure and management team of the group, although it is too early for a full strategic review.”

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Fri, 18 May 2018 10:40:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/197275/rbc-capital-ups-target-for-dixons-carphone-reiterates-positive-view-on-strong-market-position-197275.html
<![CDATA[News - Dixons Carphone dumps loss-making honeybee software unit on US tech firm Synchronoss ]]> http://www.proactiveinvestors.co.uk/companies/news/196573/dixons-carphone-dumps-loss-making-honeybee-software-unit-on-us-tech-firm-synchronoss-196573.html UK electronics retailer Dixons Carphone Plc (LON:DC.) has dumped its loss-making honeybee software business on small US tech firm Synchronoss Technologies Inc (NASDAQ:SNCR).

honeybee helps companies to design and launch digital sales processes for contact centres, retail stores and online channels with the goal of improving the customer experience.

No numbers were mentioned in the announcement, but City analysts assumed a loss of £19mln for honeybee in the current financial year.

Synchronoss said the acquisition would strengthen its digital solutions portfolio.

“honeybee’s digital platform will further augment our industry-leading expertise in optimizing digital channels to deliver an outstanding experience to the customers of Telecommunications, Media and Technology organizations,” said Glenn Lurie, chief executive of Synchronoss.

“Our acquisition of honeybee Solutions is a key component of our future product strategy to deliver true omni-channel solutions and is indicative of our aggressive investment in Digital.”

There was no announcement from Dixons, although it is believed that the retailer will book a non-cash write-off as a result of the transaction, with more detail expected in its full-year results next month.

Synchronoss said the deal was due to close towards the end of the month (May).

Dixons shares were up 0.4% to 215p in late-afternoon trading, while Synchronoss opened slightly lower in New York, down 0.6% to US$10.49.

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Tue, 08 May 2018 15:07:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/196573/dixons-carphone-dumps-loss-making-honeybee-software-unit-on-us-tech-firm-synchronoss-196573.html
<![CDATA[News - Dixons Carphone shares rise as RBC Capital raises price target, repeats 'outperform' ]]> http://www.proactiveinvestors.co.uk/companies/news/196418/dixons-carphone-shares-rise-as-rbc-capital-raises-price-target-repeats-outperform--196418.html Dixons Carphone PLC (LON:DC) shares rose on Friday as RBC Capital Markets increased its price target for the electricals retailer to 230p from 210p and reiterated its ‘outperform’ rating on expectations of a strong fourth quarter and good momentum into the new financial year.

In a note to clients, analysts at the Canadian bank said they think that Electrical trends are robust, helped by strong sales of TVs and Connected home devices, while the mobile sector remains “tough but is no worse”.

READ: Dixons Carphone shares gain on new CEO and strong Christmas trading

The analysts think the FTSE 250-listed firm has a very strong market position in both the UK and Northern Europe and the firm should show strong momentum in consumer electronics heading into the new financial year.

Dixons Carphone will report its financial year results on June 21, and RBC's analysts expect “these to show evidence of strong recent trading in Electrics.”

They said: “We think Dixons Carphone is likely to have maintained its momentum internationally, helped by new warehousing in Nordic and its dominant market position in Greece.”

However, the analysts still think that Dixons Carphone is at risk of being negatively impacted by a sharper-than-expected consumer slowdown in the UK, higher-than-expected mobile headwinds or if the competitive environment intensifies in Northern Europe.

In mid-morning trading, Dixons Carphone shares were up 5.5% to 217.2p.

 

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Fri, 04 May 2018 09:56:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/196418/dixons-carphone-shares-rise-as-rbc-capital-raises-price-target-repeats-outperform--196418.html
<![CDATA[News - Dixons Carphone shares gain on new CEO and strong Christmas trading ]]> http://www.proactiveinvestors.co.uk/companies/news/190355/dixons-carphone-shares-gain-on-new-ceo-and-strong-christmas-trading-190355.html Dixons Carphone Plc (LON:DC.) has confirmed the departure of chief executive Sebastian James as it narrowed its full year profit guidance range.

James, who has led the company for six years, is leaving at the end of the financial year to take the helm of UK chemist Boots. He will be replaced by Alex Baldock, currently the boss of online retailer Shop Direct PLC.

Shares rose 1.20% to 190.20p in morning trading. 

"It has been an enormous privilege to lead this business and to work with such passionate and committed colleagues over the last few years,” said James.

“Together, I think that we can be very proud of the profound transformation that we have seen in Dixons Carphone and the sound footing, customer affection, and place in the world that it now enjoys.”

James joined Dixons Retail in 2008 before moving up to the role of chief executive in 2012. He led the company through its merger with Carphone Warehouse in 2014.

His departure follows a profit warning in August when the firm said sales have been hit by the number of customers holding onto their handsets for longer as rising inflation and stagnant wage growth weighs on disposable incomes.

Following the resignation of James, the company brought forward the release of its Christmas trading update a day earlier. It said it now expects full year pre-tax profits between £365mln and £385mln, compared to a previous guidance of £360mln to £400mln.

The average consensus forecast for pre-tax profit is about £377mln.

Christmas trading

In the 10 weeks to 6 January, revenue rose 6% on a like-for-like (LFL) basis as its mobile business received a boost from the launch of the iPhone X. A delay to the release of the iPhone last year had hurt first half sales.

READ: Investors dial in on Dixons as it holds divi steady and boasts about record Black Friday

“Our UK mobile business had a strong sales period helped by better iPhone X availability and we grew share in SIM free and SIM only over the period,” said James.

The best performing regions were Greece and the Nordics, which delivered LFL revenue growth of 23% and 11% respectively.

LFL revenue in the UK & Ireland rose 3% but gross margins continued to be “challenged” in phones due to a weaker pound.

READ: Dixons Carphone's Andrew Harrison returns to Carphone Warehouse to lead turnaround

 “Looking forward we continue to keep our antennae twitching for any material change in consumer behaviour, but remain relentless in our focus on providing the best value, choice, and service to our consumers, " James said.

“For the remainder of this year we have an early Easter, a new Samsung phone and the first week or two of our World Cup promotion to look forward to, and work continues on redefining and refocusing our Carphone Warehouse business to be a simpler, less capital intensive model.” 

The company expects net debt to reduce to about £250mln by the year end and cash outflow for the year is estimated to reach £50mln, compared to a previous forecast of £40mln.

Store closures on the horizon?

Neil Wilson, senior market analyst at ETX Capital, said the remarks about making the group a simplier, less capital intensive model "most certainly means for store closures.

"As previously stated, with over 700 Carphone stores in a total estate in excess of 1,000 across the group, there is ample opportunity to rationalise the Carphone estate and improve profitability in mobile while still retaining a dominant market position," he said.

"Mr Baldock has great experience in turning around Shop Direct and tends to favour an online-first approach – he may cut the store footprint far more radically than Mr James would have done."

Henry Croft, research analyst at Accendo Markets, said the Christmas trading sales figures and the announcement of a new chief executive will be seen as a positive by shareholders. 

"The narrowing of FY guidance (bringing down upper-end of range) is the obvious exception to positive tones struck in the company’s statement, with continued margin pressure on its mobile segment being the primary agitator, but it is largely being ignored in favour of the many positives from this morning’s release," he said.

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Mon, 22 Jan 2018 07:37:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/190355/dixons-carphone-shares-gain-on-new-ceo-and-strong-christmas-trading-190355.html
<![CDATA[News - Carphone Warehouse fined £400,000 for lax information technology safeguards ]]> http://www.proactiveinvestors.co.uk/companies/news/189827/carphone-warehouse-fined-400000-for-lax-information-technology-safeguards-189827.html Carphone Warehouse, part of the Dixons Carphone Plc (LON:DC) group, has been fined £400,000 after it suffered a cyber-attack in 2015.

The size of the fine is the same as that meted out to Talktalk Telecom Group PLC (LON:TALK) in 2016 after it suffered a data breach.

The attack exposed the personal data of more than three million customers.

The Information Commissioner's Office (ICO) said the company's failure to implement sufficiently robust safeguards allowed malicious parties to potentially access names, addresses, phone numbers, dates of birth, marital statuses and, in some cases, historical payment card information.

“A company as large, well-resourced, and established as Carphone Warehouse, should have been actively assessing its data security systems, and ensuring systems were robust and not vulnerable to such attacks,” said information commissioner Elizabeth Denham.

Having said that, there is no evidence that there had been instances of identity theft or fraud.

The ICO discovered 11 separate issues with the company’s data protection and security practices, any of which would have breached the Data Protection Act on their own. These included using the same root password being used on every one of the company's servers; no anti-virus software on the servers that held the data; and the storage of full credit card details when there was no requirement to do so.

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Wed, 10 Jan 2018 15:26:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/189827/carphone-warehouse-fined-400000-for-lax-information-technology-safeguards-189827.html
<![CDATA[News - Dixons Carphone's Andrew Harrison returns to Carphone Warehouse to lead turnaround ]]> http://www.proactiveinvestors.co.uk/companies/news/189164/dixons-carphone-s-andrew-harrison-returns-to-carphone-warehouse-to-lead-turnaround-189164.html Dixons Carphone Plc (LON:DC.) said Andrew Harrison will step down as deputy chief executive to return to the helm of struggling subsidiary Carphone Warehouse.

Harrison, who was chief executive of Carphone before its £3.8bn merger with Dixons in 2014, will become chairman of the business to help lead its turnaround.

READ: Dixons Carphone still good value to “more adventurous funds”, says City broker

“I am extremely proud of what we have achieved through the merger of Dixons Carphone over the last three years,” Harrison said in a statement on Thursday.

“With the ongoing changes in the mobile market, I now want to focus my attention more sharply on Carphone Warehouse, a business that has been close to my heart for over 20 years, as we enter the next stage of its development."

Dixons Carphone’s mobile phone division has come under pressure as UK consumers have been holding onto their handsets for longer rather than updating to the latest releases as a weaker pound pushes prices higher and puts a strain on household incomes.

In August, the group warned that it expects its full year profit to drop due to challenges in its UK mobile business.

READ: Dixons Carphone shares fall after RBC cuts rating and target price on UK mobile concerns

Chief executive Sebastian James said in Thursday’s statement: “We are aware that this part of our business, while retaining a high degree of appeal and relevance to customers, operates in a market where customer behaviour is changing.”

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Thu, 21 Dec 2017 11:18:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/189164/dixons-carphone-s-andrew-harrison-returns-to-carphone-warehouse-to-lead-turnaround-189164.html
<![CDATA[News - Dixons Carphone still good value to “more adventurous funds”, says City broker ]]> http://www.proactiveinvestors.co.uk/companies/news/188804/dixons-carphone-still-good-value-to-more-adventurous-funds-says-city-broker-188804.html Dixons Carphone PLC (LON:DC) shares headed higher for the second day in a row after Numis upgraded the stock to ‘add’ from ‘hold’ on value grounds.

The Currys and PC World owner surged on Wednesday despite reporting a plunge in first-half profits, with investors encouraged by a more resilient tone and a solid outing from the electricals and white goods divisions.

READ: Investors dial in on Dixons as it holds divi steady and boasts about record Black Friday

The Carphone Warehouse business is still a concern though, as more and more consumers hold off from upgrading their handsets, while many are also moving onto less profitable SIM only contracts.

Dixons said it would restructure this business to make it simpler and less capital intensive in a bid to react to changing consumer habits.

Despite the planned overhaul, Numis analyst Matthew Taylor still expects “profit attrition” in the mobiles division as the FTSE 250 company has had to invest in margins in order to hit its volume targets.

Still has strong market position

That said, Taylor thinks this will have a “diminishing effect” from 2019 though, with profits set to be re-based by the end of this financial year.

On top of that, the analyst says Carphone Warehouse still has a “strong market position” with a 22% overall share.

Even with the various issues, Taylor still believes that the current valuation is cheap, or “at least for more adventurous funds”.

On top of the rating upgrade, he also reckons the stock is worth 210p – almost 10% ahead of the 184.3p where the shares find themselves on Thursday.

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Thu, 14 Dec 2017 12:48:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/188804/dixons-carphone-still-good-value-to-more-adventurous-funds-says-city-broker-188804.html
<![CDATA[News - Investors dial in on Dixons as it holds divi steady and boasts about record Black Friday ]]> http://www.proactiveinvestors.co.uk/companies/news/188718/investors-dial-in-on-dixons-as-it-holds-divi-steady-and-boasts-about-record-black-friday-188718.html Dixons Carphone Plc (LON:DC) endured a challenging first half of the year, but its decision to hold the dividend steady coupled with a solid outing from its electricals division kept investors tuned in.

The markets already knew profits would plummet thanks to August’s profit warning and they duly did, falling 60% to £61mln (H1 2016: £154mln) in the six months ended October 28, partly because of an unfavourable revaluation of network receivables and changes to its insurance contracts.

Caprhone Warehouse to be restructured

Dixons’ Carphone Warehouse business didn’t help matters either, with like-for-like sales down 3% as cash-strapped consumers hold on to their handsets for longer instead of replacing them as frequently as they once did.

On top of that, the delayed launch of the iPhone X this year also affected first-half sales, although this should provide a little boon in the second half.

The mobile phones division will now be overhauled in a bid to deliver a simplified, more profitable operation.

Full-year guidance lowered

Chief executive Seb James said: “We recognise that the performance of the mobile division needs addressing, and are taking action to adapt our model in order to cement our place in a changing world.

“We will update the market on these developments in due course, but we believe that we can, over time, reduce the complexity and capital intensity of our mobile business model, and increase the simplicity and profitability of what we do.”

Another area of disappointment was a lowering of full-year guidance, with Dixons now expecting profits for the year to come in at between £360mln and £400mln this year, down from its previous forecast of between £360mln and £440mln.

With the bad stuff fairly well-flagged, investors instead decided to focus on the more optimistic comments in Wednesday’s statement.

Record Black Friday and steady divi

The FTSE 250 firm - which also trades as Curry’s and PC World in the UK - has increased its market share in the key electricals and white goods markets, with sales in that division up 7% in the first half.

Dixons Carphone also said the start to its peak Christmas trading period has “gone well” with sales records being broken across all off its territories, including a record Black Friday – an increasingly important date in the calendar for retailers on this side of the pond.

The interim dividend was kept steady at 3.5p, while the board repeated its intention to also maintain the total full-year dividend at 11.25p.

Plenty of challenges but encouraging

“While there are still plenty of challenges ahead, this more resilient showing has given the group the confidence to say it’ll be holding the dividend steady this year, boosting the shares after a painful period in the doldrums,” wrote Hargreaves Lansdown analyst George Salmon.

“However, the main challenge facing the group is in mobile. Simply put, the latest models aren’t prompting the same scramble to the tills they used to.”

Expect store closures

“For simpler and less capital intensive, read store closures,” said ETX Capital market analyst Neil Wilson.

“With over 700 Carphone stores in a total estate in excess of 1,000 across the group, there is ample opportunity to rationalise the Carphone estate and improve profitability in mobile while still retaining a dominant market position.”

Shares jumped 4.5% to 175p on Wednesday morning.

--Updates for share price and analyst comments--

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Wed, 13 Dec 2017 08:31:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/188718/investors-dial-in-on-dixons-as-it-holds-divi-steady-and-boasts-about-record-black-friday-188718.html
<![CDATA[News - UBS trims target, estimates for Dixons Carphone amid indications of weak sales of Apple's iPhone 8 ]]> http://www.proactiveinvestors.co.uk/companies/news/188444/ubs-trims-target-estimates-for-dixons-carphone-amid-indications-of-weak-sales-of-apple-s-iphone-8-188444.html UBS has trimmed its target price and estimates for Dixons Carphone Plc (LON:DC) ahead of the electronics products retailer’s interims, due next week, amid indications of weaker sales of Apple Inc’s (NYSE:AAPL) new  iPhone 8 model.

A tough first half has already been flagged up by Dixons Carphone along with its profit warning in August, especially given the timing of one-off gains last year for comparatives.

READ: Dixons Carphone plunges as it warns on profits with UK mobile phone business hit by weak demand

In a  note today, UBS’s analysts said it is forecasting the FTSE 250 listed firm to report first half pre-tax profit of £67mln next Wednesday, down over 50% year-on-year, with weaker Phone 8 sales likely to have depressed Dixons Carphone’s second quarter sales.

The Swiss bank’s analysts also trimmed their second half pre-tax profit estimate by £20mln, taking the full year forecast down to £370mln, to reflect the possibility that some handset demand will spill over into next year as the split launch of the Apple 8 and X phones has been unhelpful.

They said: “The iPhone X has been more popular than the 8 but our work shows that there have been stock shortages in Apple stores. Although the waiting time is now falling, this could have had an impact on DC's Q3 as well.”

READ: Dixons Carphone shares fall after RBC cuts rating and target price on UK mobile concerns

The analysts pointed out, however, that sales over the Black Friday, Christmas and Boxing Day Sale peak periods remain significant swing factors, and investors will be very keen to hear how current trading is going next week.

UBS retained a ‘buy’ rating on Dixons Carphone shares but cut its target price to 220p from 230p, albeit with the stock currently changing hands at 165.1p.

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Thu, 07 Dec 2017 11:33:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/188444/ubs-trims-target-estimates-for-dixons-carphone-amid-indications-of-weak-sales-of-apple-s-iphone-8-188444.html
<![CDATA[News - Dixons Carphone shares fall after RBC cuts rating and target price on UK mobile concerns ]]> http://www.proactiveinvestors.co.uk/companies/news/183597/dixons-carphone-shares-fall-after-rbc-cuts-rating-and-target-price-on-uk-mobile-concerns-183597.html Dixons Carphone Plc (LON:DC) shares dropped after analysts warned the company is facing a challenging outlook in the UK mobile phone market.  

RBC Capital Markets downgraded the stock to an ‘outperform’ rating from ‘top pick’ and cut the target price to 215p from 225p.

The downgrade follows a profit warning from Dixons Carphone last month when it said the UK mobile market has come under pressure since customers have not been upgrading their handsets as frequently due an increase in price of handsets.

READ: Dixons Carphone plunges as it warns on profits with UK mobile phone business hit by weak demand

“We think valuation is attractive, Dixons Carphone has material international exposure (circa 30% of profit) and it is gaining share in electricals, but it faces further mobile headwinds short term which means EPS (earnings per share) visibility is low,” RBC analyst Richard Chamberlain and Shelly Xie said in a note to investors.

Due to low earnings visibility in mobile, RBC lowered its EPS forecasts for 2018 to 25.13p from 25.39p previously and for 2019 to 27.17p from 27.43p.

Short-term headwinds

The analysts said demand in mobile has been affected by higher new handset prices and a lack of compelling technological advancements, with customers moving more to post-pay SIM-only deals.

These short term headwinds are unlikely to ease, RBC added, so Dixons Carphone has to invest more in its offer and margin to maintain share.

Yet the analysts noted that Dixons has been increasing its share of the European electricals sector, supported by competitive pricing and strong support from suppliers.

“The European electricals space has started to consolidate over the past 1-2 years and we see potential for further activity as many markets are still fragmented and as the leading retailers have been gaining share, highlighting the benefits of scale in the face of online competition,” they said.

RBC said Dixons Carphone is trading at less than 7 times its forecast of fiscal year 2018 EPS and offers a dividend yield of 6.5% if the company maintains its dividend this year.

Shares fell 2.32% to 168.60p in morning trading. 

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Thu, 07 Sep 2017 10:38:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/183597/dixons-carphone-shares-fall-after-rbc-cuts-rating-and-target-price-on-uk-mobile-concerns-183597.html
<![CDATA[News - Dixons Carphone continues decline as HSBC downgrades rating, halves price target following shock profit warning ]]> http://www.proactiveinvestors.co.uk/companies/news/182987/dixons-carphone-continues-decline-as-hsbc-downgrades-rating-halves-price-target-following-shock-profit-warning-182987.html A leading City broker has downgraded its recommendation for shares in Dixons Carphone Plc (LON:DC) and halved its price target following Thursday’s shock profit warning by the electricals retailer.

The investment banking arm of High Street lender HSBC has gone to ‘hold’ from ‘buy’ on the stock, which it reckons is worth 200p, down from 410p before the alert.

In early morning trading today, after sliding around 20% yesterday, Dixons Carphone shares on the FTSE 250 index were down another 2%, or 4.3p at 176.5p this morning.

READ: Dixons Carphone plunges as it warns on profits

Dixons hit the investing public with a major downgrade to earnings, which it now forecasts to be in the range £360-£440mln, compared with consensus estimates pitched at around £500mln previously.

The nub of the problem was the impact of European Union roaming legislation on the Carphone Warehouse portion of the business although the company faces other problems too.

It is investing in margins (cutting prices) to defend its position in the mobile phone market. 

The outlook for the Dixons electricals business looks ‘tough’, with a worsening outlook for consumer spending, HSBC said.

WATCH: Neil Wilson of ETX Capital explains Dixons profit warning

Finally, the launch of the new iPhone is unlikely to set the world alight (or alter the retailer’s fortunes), the bank added.

It reckons sales are more likely to be nearer those of the 6S model than the hugely successful iPhone 6.

The key issue going forward is credibility “given such a large downgrade comes so soon after full-year results”, HSBC concluded.

It also wonders whether the issue with the mobile phone business are structural (ie. hint at a long-term decline) or merely cyclical.

Liberum keeps its 'buy' stance

Meanwhile, analysts at Liberum Capital, which yesterday placed their rating and price target under review for Dixons in the wake of the profit warning, have kept their 'buy' rating on the stock while chopping their price target back to 300p from 430p.

In a note to clients, the Liberum analysts noted that Dixons shares “now trade on a CY17E PER of 6.4x and we believe the low valuation more than compensates.”

They added: “There is support from a 5%+ div. yield, where there is upside potential, and a healthy balance sheet with under 0.5x leverage.”

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Fri, 25 Aug 2017 09:50:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/182987/dixons-carphone-continues-decline-as-hsbc-downgrades-rating-halves-price-target-following-shock-profit-warning-182987.html
<![CDATA[Media files - Dixons Carphone profits warning..Neil Wilson of ETX Capital explains ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/7992/dixons-carphone-profits-warningneil-wilson-of-etx-capital-explains-7992.html Thu, 24 Aug 2017 12:09:00 +0100 http://www.proactiveinvestors.co.uk/companies/stocktube/7992/dixons-carphone-profits-warningneil-wilson-of-etx-capital-explains-7992.html <![CDATA[News - Dixons Carphone plunges as it warns on profits with UK mobile phone business hit by weak demand ]]> http://www.proactiveinvestors.co.uk/companies/news/182914/dixons-carphone-plunges-as-it-warns-on-profits-with-uk-mobile-phone-business-hit-by-weak-demand-182914.html Dixons Carphone Plc (LON:DC.) shed almost a fifth of its market value today after the electricals retailer warned that it expects its full year profit to drop due to challenges in its UK mobile business, the disposal of its Spanish arm and lower EU roaming charges.

The company said in a trading statement that it sees headline pre-tax profit of £360mln to £440mln in fiscal year 2017/18, compared to £501mln last year.

WATCH: 'Not necessarily as bad as share price fall would suggest'

In late afternoon trading, Dixons shares were down over 20%, or 48.0p to 187.3p, albeit having dropped over 30% in initial reaction to the warning.

Analysts at Liberum Capital said the warning suggests up to 20% cuts in profit estimates for the electricals retailer, and placed their ‘buy’ rating and 430p price target for the stock under review.

Dixons mobile phone business has come under pressure as UK consumers have been holding onto their handsets for longer rather than updating to the latest releases due to the Brexit-driven slump driving prices higher.

READ: Dixons Carphone resilient in face of Brexit as it posts record full-year pre-tax profits

The group said while it was too early to say whether upcoming handset launches or the normal lifecycle of phones will reverse this trend, it was planning on the basis that overall market demand will not correct itself this year.  

The group has decided to invest in its margin and proposition to maintain market share in the event of continued weakness in consumer demand in post-pay phone contracts.

The investment will carve into profits in the phone business but the company expects this to be offset by “good progress” in its UK & Ireland, Nordic and Greek electrical businesses to deliver overall profit in the core retail operations in line with last year.

EU roaming legislation to hit profits

Group profits will also be hit by new EU rules that scrap roaming charges for people using mobile phones abroad. The company expects a negative one-off adjustment of between £10mln and £40mln, compared to a positive effect of £71mln last year.

Dixons also expects its consultancy business CWS to generate “limited profits overall” due to changes to the way it sells its honeybee software product, a platform housed on handheld tablets that helps store staff streamline the sales process by meeting customers’ individual needs. A move towards software-as-a-service rather than upfront sales will create higher value in the longer term but will have an impact on this year's reported profitability, Dixons said.

In another drag on profits, Dixons last June ended its retail joint venture with US mobile network Sprint Corp, citing  the “changing US mobile market landscape”.

READ: Dixons Carphone to end its US joint venture with Sprint because of “changing US mobile market landscape”

At the time the group said it would concentrate on Honeybee, which the UK group was rolling out across the Sprint store network. Dixons said a significant contract sold to Sprint last year will not be repeated this year, thereby affecting profits.

In July of this year the company also decided to sell its Spanish business for €55mln to Global Dominion Access, a tech services company based in Bilbao.

First quarter sales rise

Alongside its profit warning, the company reported a 6% like-for-like increase in first quarter sales. In the UK & Ireland business, like-for-like sales rose 4%, driven by its electrical business. The Nordics division saw like-for-like sales rise 8% while the Greece unit gained 6%.

"As you can see from our trading statement, we continue to trade well in all geographic markets with like-for-like sales up 6% across the group,” said chief executive Seb James.

“It is good to see this performance from our UK electrical business particularly against the Euros football championship last year, as well as strong sales from our Nordic and Greek businesses.”

 -- Updates share price --

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Thu, 24 Aug 2017 07:58:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/182914/dixons-carphone-plunges-as-it-warns-on-profits-with-uk-mobile-phone-business-hit-by-weak-demand-182914.html
<![CDATA[News - Olé: Dixons Carphone sells its Spanish business to telecom group Global Dominion Access for €55mln in cash ]]> http://www.proactiveinvestors.co.uk/companies/news/180890/ol-dixons-carphone-sells-its-spanish-business-to-telecom-group-global-dominion-access-for-55mln-in-cash-180890.html Dixons Carphone PLC (LON:DC.) has sold its Spanish business, comprising its holdings in The Phone House Spain, Connected World Services Europe, and Smarthouse for €55mln to Spanish telecom group Global Dominion Access.

The FTSE 250-listed firm said the deal is expected to be complete by the end of the electrical goods and mobile phones retailer's second quarter, with the cash – payable in two tranches at completion and in January 2018 – to be reinvested into Dixon’s business.

READ: Dixons Carphone to end its US joint venture with Sprint

Two years ago, Dixons disposed of its Phone House businesses in Portugal, Germany, and the Netherlands.

At the start of June this year, Dixons Carphone and US mobile network Sprint Corp (NYSE:S) announced that they were ending their retail joint venture because of the “changing US mobile market landscape”.

The UK firm said it is to concentrate its focus on its Honeybee tablet sales software, used under white label by companies such as Apple Inc (NASDAQ:AAPL), which the firm will roll out across the Sprint store network.

READ: Dixons Carphone up as fourth-quarter sales beat forecasts

Sprint, the fourth-largest US wireless carrier and backed by Japan’s SoftBank, and Dixons Carphone - which owns the Currys PC World chain in the UK - entered into an agreement in July 2015 to open and manage a number of Sprint Connect branded stores in the US as part of an expansion plan.

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Fri, 14 Jul 2017 07:35:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/180890/ol-dixons-carphone-sells-its-spanish-business-to-telecom-group-global-dominion-access-for-55mln-in-cash-180890.html
<![CDATA[Media files - Dixons 'impressively continuing to grow market share' as it books record profits ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/7708/dixons-impressively-continuing-to-grow-market-share-as-it-books-record-profits-7708.html Wed, 28 Jun 2017 11:13:00 +0100 http://www.proactiveinvestors.co.uk/companies/stocktube/7708/dixons-impressively-continuing-to-grow-market-share-as-it-books-record-profits-7708.html <![CDATA[News - Dixons Carphone resilient in face of Brexit as it posts record full-year pre-tax profits ]]> http://www.proactiveinvestors.co.uk/companies/news/179952/dixons-carphone-resilient-in-face-of-brexit-as-it-posts-record-full-year-pre-tax-profits-179952.html Dixons Carphone Group PLC (LON:DC.) shrugged off any post-Brexit concerns as it beat expectations to post record revenues last year.

For the 12 months to 29 April, the consumer electronics giant saw pre-tax profits rise by 10% to £501mln (2016: £457mln); comfortably topping the £475mln to £495mln guidance it forecast only a few weeks ago.

That came on revenues of £10.6bn; a 4% increase on a like-for-like basis.

WATCH: Dixons 'impressively continuing to grow market share' as it books record profits

The resilient performance comes as recent UK economic data suggests that the economy is starting to wind down again – always a worrying sign for retailers.

Household spending growth slowed in the first three months of the year, the first indication that consumers are starting to succumb to a combination of Brexit-induced price hikes and stagnant wage growth.

UK economy appears to be "holding up"

The consumer electronics giant – which owns Currys, PC World and Carphone Warehouse in the UK – said that the UK economy appears to “holding up” though, as sales edged 2% higher year-on-year.

Performance in the UK was underpinned by a strong showing from its electrical business, which the company said made gains in market share “across consumer electronics, white goods, computing and multiplay”.

Dixons Carphone’s European operations got a bump from sterling’s recent fall, with revenues from its Nordics and Southern Europe divisions jumping 20% (5% on a constant currency basis).

Excluding the currency tailwinds, sales in those divisions rose 5% and 4% respectively, predominantly due to new store openings.

Its smallest unit – Connected Worldwide Services – saw the biggest year-on-year jump however, with revenues soaring 41% to £213mln.

Change always represents opportunity, says boss

“Over the last few years a great deal of work has been done to make the company stronger, lower risk and more resilient,” said group chief executive Seb James.

We are seeing the upside of these efforts now as we declare record headline profits before tax of over half a billion pounds - up 10%.

“While the UK consumer environment seems to be holding up for us, there will undoubtedly continue to be changes in the way people buy all of the products that we sell from phones to washing machines.

“Change always represents opportunity, and our job is to find the propositions that keep us compelling to our customers forever.”

Robust performance, says City broker

“The company has reported headline PBT in line with expectations, reflecting a robust performance for the year, [while] solid growth has been delivered in the UK in a tougher consumer environment,” wrote Liberum analyst Adam Tomlinson in a note to clients.

“Management's outlook statement remains cautiously optimistic, with macro uncertainty and consumer confidence needing to be watched.

“Developments in CWS should give confidence over the division's long-term growth prospects. We do not expect material changes to consensus forecasts today [and] DC remains our top value pick in UK retail.”

Reassuring signs for the UK economy

“Shares in Dixons Carphone popped over 2% on the open after the firm reported a strong performance that goes somewhat against the recent trend among high street retailers,” said ETX Capital senior market analyst Neil Wilson.

“Far from the doom and gloom of Brexit and rocky household spending reported by some, the consumer environment seems to be largely holding up for the firm and it is responding well to the way consumer trends are moving, i.e. online.

“The fall in the pound does make life tough when everything you sell is made abroad, but with over a third of sales coming from the Nordics and Southern Europe the effect is offset to a degree. So a 5% rise in sales in European markets becomes a 20% jump in sterling terms and that helped lift profits.”

Dixons Carphone ups divi

Analysts and investors alike had expected Dixons to up its dividend, and that’s exactly what they got.

The retailer proposed a final dividend of 7.75p to take the total divi for the year to 11.25p, some 15% higher than the 9.75p it paid out last year.

Shares gained 1.2% to 300p in early deals.

--Updates for share price and analyst comment--

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Wed, 28 Jun 2017 08:05:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/179952/dixons-carphone-resilient-in-face-of-brexit-as-it-posts-record-full-year-pre-tax-profits-179952.html
<![CDATA[News - Dixons Carphone to end its US joint venture with Sprint because of “changing US mobile market landscape” ]]> http://www.proactiveinvestors.co.uk/companies/news/179035/dixons-carphone-to-end-its-us-joint-venture-with-sprint-because-of-changing-us-mobile-market-landscape-179035.html Dixons Carphone PLC (LON:DC.) and US mobile network Sprint Corp (NYSE:S) are ending their retail joint venture because of the “changing US mobile market landscape”.

The FTSE 250-listed firm said it is to concentrate its focus on its Honeybee tablet sales software, used under white label by companies such as Apple Inc (NASDAQ:AAPL), which the UK group will roll out across the Sprint store network.

Sprint, the fourth-largest US wireless carrier and backed by Japan’s SoftBank, and Dixons Carphone - which owns the Currys PC World chain in the UK - entered into an agreement in July 2015 to open and manage a number of Sprint Connect branded stores in the US as part of an expansion plan.

READ: Dixons Carphone up as fourth-quarter sales beat forecasts

After the experiment proved a success, the pair announced in January 2016 that they would expand the tie-up to 500 stores at an expected cost to Dixons Carphone of US$32mln.

But following a review by Sprint of its distribution strategy, the retailer and telecoms group has agreed that Dixons will sell its 50% stake in the joint venture to Sprint for an undisclosed amount.

Andrew Harrison, deputy chief executive of Dixons Carphone said "now is the right time to transfer these stores to Sprint, and to concentrate on our exciting software business.”

Honeybee software to be the focus

Honeybee is a digital platform that simplifies and streamlines the sales process. The software is housed on devices such as handheld tablets and helps staff adapt to individual customer needs.

In March 2016, Dixons Carphone signed a new deal to deploy Honeybee into the Sprint retail estate.

In late afternoon trading in London, Dixons Carphone shares were down 1.6%, or 5.2p at 312.0p.

In pre-market trading in New York, Sprint shares were 0.2% lower at US$8.58.

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Fri, 09 Jun 2017 14:22:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/179035/dixons-carphone-to-end-its-us-joint-venture-with-sprint-because-of-changing-us-mobile-market-landscape-179035.html
<![CDATA[News - Dixons Carphone up as fourth-quarter sales beat forecasts, profit guidance narrowed ]]> http://www.proactiveinvestors.co.uk/companies/news/178252/dixons-carphone-up-as-fourth-quarter-sales-beat-forecasts-profit-guidance-narrowed-178252.html Dixons Carphone PLC (LON: DC.) was a top FTSE 250 gainer in morning trade after the electricals and mobile phones retailer saw its fourth-quarter sales beat forecasts and its narrowed it guidance for full-year profit.

The group, which owns Currys, PC World and Carphone Warehouse in the UK, saw its like-for-like group sales increase by 2% the 16 weeks to April 29, ahead of  the company compiled consensus forecast of 0.9%.

READ: Christmas trading at Dixons Carphone beats forecasts

The retailer said its like-for-like sales in the UK and Ireland rose 2%, driven by a strong electricals performance

Meanwhile likes-for-sales in the Nordic region – where it owns Elkjop and Elgiganten – were also 2% higher, and in southern Europe, where it owns Greek chain Kotsovolos, like-for-like sales increased by 5%.

Dixons Carphone said its headline full-year pre-tax profit guidance was now £485mln-£490mln, a narrowing from the previous forecast of £475mln-£495mln.

UK consumer continues to be active in the market, says boss

Seb James, the retailer’s group chief executive, said: “Our full year like-for-like sales of 4% over the year is pleasing across the Group; in the last quarter, sales in the UK & Ireland were - especially in phone - impacted by the later launch of the iconic (and excellent) Samsung S8 and by a late Easter.”

 He added: “Given our performance despite this headwind, our view is that the UK consumer continues to be active in the market, but we anticipate no let-up in their - very rational - view that price and service are critical factors in deciding where to shop.”

In  early morning trading, Dixons Carphone shares were up 3%, or 9.9p at 336.5p.

George Salmon, equity analyst at Hargreaves Lansdown, said: “The demise of high street rivals like Comet and Phones4u means there isn’t a great deal of ‘real world’ competition for Dixons Carphone’s ‘3-in-1’ mobile, computing and white goods stores.

“Add in the fact that tech is an increasingly important part of our daily lives, and it’s easy to see the upside.”

He added: “However, the danger is from the less visible challenge posed by online competitors such as the mighty Amazon. Sterling’s weakness, which raises the cost of importing electricals, is providing another headwind.”

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Wed, 24 May 2017 09:52:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/178252/dixons-carphone-up-as-fourth-quarter-sales-beat-forecasts-profit-guidance-narrowed-178252.html
<![CDATA[News - Some reasons for optimism over Dixons Carphone ]]> http://www.proactiveinvestors.co.uk/companies/news/178079/some-reasons-for-optimism-over-dixons-carphone-178079.html Electrical goods retailer Dixons Carphone PLC’s (LON:DC.) fourth quarter trading update on Wednesday should shed some light on how rising inflation is hitting consumers' pockets.

An update in January revealed good growth at Christmas and Dixons said it anticipated a "meaningful uplift in year-on-year profitability this year over last" on the back of this performance.

Earlier this year it confirmed guidance for full year 2017 in line with market consensus of between £475mln and £495mln for profit before tax.

Recent  data though showed general retail sales in April beat forecasts with a 2.3% rise and marked a big rebound from March’s plunge.

Market consensus is that it pre-tax profit growth for 2017 will come in at 10%.

Harshly treated

City firm Liberum estimates pre-tax profit for 2017 of £486mln up from £447mln a year earlier, on sales of £10.2bn (2016: £9.7bn).

It describes the group as its favourite value play and says the fall of around 23% in the last year (versus general retail down 3%) is unjust.

"We view the company as a long-term structural winner. It takes over 25% market share in its core retail geographies and through its leading specialist multi-channel position and deep supplier relationships it is gaining share faster than any competitor."

Analyst Adam Tomlinson says the group has evolved to become much more defensive, while free cash flow should double in 2018 as UK store rationalisation completes.

Liberum targets 430p a share, against a current price of around 329p.

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Fri, 19 May 2017 15:48:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/178079/some-reasons-for-optimism-over-dixons-carphone-178079.html
<![CDATA[News - Christmas trading at Dixons Carphone beats forecasts, profit outlook confirmed ]]> http://www.proactiveinvestors.co.uk/companies/news/172086/christmas-trading-at-dixons-carphone-beats-forecasts-profit-outlook-confirmed-172086.html Britain's largest electricals and mobile phone retailer Dixons Carphone Group PLC (LON:DC.) saw its trading over Christmas beat forecasts as it reported its fifth consecutive year of growth over the festive period and confirmed its full-year profit outlook.

The FTSE 100-listed group - which owns Currys, PC World and Carphone Warehouse stores in Britain - said overall like-for-like sales rose by 4% in the 10 weeks to January 7, in-line with its first half growth, and beating estimates for a 2.5% increase.

Trading in the UK and Ireland was strong, with like-for-like sales up 6%, against forecasts of 3.5%, and underlying sales in southern Europe – where it owns Kotsovolos in Greece – rose by 5%.

But in the Nordic region – were the firm trades as Elkjop and Elgiganten – like-for-like sales fell 1% , reflecting a focus on optimising profit margins.

Seb James, Dixons Carphone’s group chief executive, said sales of large screen TV – the firm’s view a bellwether for consumer sentiment - showed a solid performance in all its markets.

However, patchy availability of the larger, higher margin phones and tablets made those categories tougher this year, he added.

James said: “This year, as a result of our scale in all of our markets, we were able to offer prices that were truly ground-breaking during both our Black Friday week and our annual Boxing Day week sales - while maintaining margins - and we believe that we have outperformed the market during the period.

“As a result, and despite the fact that there is quite a bit of the year to go, we anticipate a meaningful uplift in year-on-year profitability this year over last and confirm our outlook in line with market consensus at £475m-£495m of headline profit before tax for the year ending 29 April 2017.”

Last month, Dixons Carphone reported a 19% increase in first-half profits, but said it was planning for the possibility of more uncertain times ahead.

Broker upbeat ...

Analysts at Liberum pointed out that Dixons Carphone’s Christmas trading “has come in at nearly double our expectations reflecting the continued momentum within the business and further market share gains.”

In a note to clients, they added: “Management has confirmed guidance in line with market expectations, although given the current LFL growth run-rate we see strong upside risk.

“The shares have been down into the results and we expect them to perform well on today's update, which reafffirms our confidence around Dixon's Carphone long-term growth prospects.”

In early trading, Dixons Carphone shares were up 0.5%, or 1.7p at 337.8p.

 -- Adds broker comment, share price --

 

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Tue, 24 Jan 2017 07:57:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/172086/christmas-trading-at-dixons-carphone-beats-forecasts-profit-outlook-confirmed-172086.html
<![CDATA[News - Dixons Carphone sees shares drop as "uncertain times" comment offsets strong results ]]> http://www.proactiveinvestors.co.uk/companies/news/170456/dixons-carphone-sees-shares-drop-as-uncertain-times-comment-offsets-strong-results-170456.html Dixons Carphone Group PLC (LON:DC.) today unveiled a bigger push into “connected home services” with the formation of a strategic partnership with UK energy supplier SSE PLC (LON:SSE).

Europe's largest electricals and mobile phone retailer also reported forecast-busting first-half results, but its shares fell on cautious outlook comments.

Dixons Carphone saw its underlying pretax profits rise by 19% to £144mln for the 26 weeks to October 29, above consensus expectations for £141mln, and up from £121mln a year earlier.

Group like-for-like sales were up 4% in the period, driven by a 5% rise in the UK & Ireland division, while its operations in the Nordics and South Europe saw a boost from the weakness of the pound since June’s Brexit vote.

READ: Dixons first-quarter strong ....

The group, which trades as Currys, PC World and Carphone Warehouse in the UK and Ireland, owns the Elkjop and Elgiganten stores in Nordic countries and Kotsovolos in Greece.

Dixons Carphone also said its Connected World Services business performed strongly in the first half, with revenues up 46% to £98mln helped by deals with US giant Sprint Nextel (NYSE:S) and UK broadband and telecoms provider Talk Talk PLC (LON:TALK).

The unit’s latest venture with SSE, which has a combined UK customer base of 10 million households, will see Dixons Carphone provide support and services to manage devices in their homes "from boilers to laptops, dishwashers to Wi-Fi." No financial details of the deal were disclosed.

Dixons Carphone chief executive Seb James said: "Looking forward, we remain optimistic about our ability to continue to gain market share in all our key markets, and, while we have still not seen any effect on consumer demand as a consequence of Brexit, we have been planning for the possibility of more uncertain times ahead."

He added: “We are also planning our offer so that potential currency impacts are minimised for the customer, and are ensuring that next year, as always, everybody can be absolutely sure that they won't get a better deal anywhere.”

Nick Bubb, an independent retail analyst, commented: "In terms of the outlook for the key peak trading season, CEO Seb James doesn’t give much away in the statement, but he sounds confident and no doubt will drop a few bon mots on the 9am analysts conference call."

But shares drop ....

Dixons Carphone shares topped the FTSE 100 fallers list, however, shedding 6.8%, or 24.9p at 341.8p in mid-morning trading.

George Salmon, equity analyst at Hargreaves Lansdown, said: “Dixons Carphone’s strong first half numbers mask the threat of two potential challenges brought on by the Brexit vote.

“Despite saying that it has yet to see any effect on demand as a result of the referendum, this could well be put to the test in the future.

“We have yet to see if the gloomy predictions about the UK’s economy are accurate, but any negative impact would surely be felt by the group. After all, big-ticket electronic items fall into the discretionary spending category. 

“In addition, even if the economy remains resilient to the shock of leaving the EU, the threat of rising inflation hangs over the group.”

He added: “ With these challenges in mind, its no surprise to see the group planning for the possibility of more uncertain times ahead.”

 -- Updates with additional broker comment, share price --

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Wed, 14 Dec 2016 07:54:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/170456/dixons-carphone-sees-shares-drop-as-uncertain-times-comment-offsets-strong-results-170456.html
<![CDATA[News - Dixons Carphone sales rise amid Greek cheer ]]> http://www.proactiveinvestors.co.uk/companies/news/163632/dixons-carphone-sales-rise-amid-greek-cheer-163632.html A buoyant performance by economic struggler Greece and no immediate impact from the EU referendum boosted electrical retailer Dixons Carphone (LON:DC.).

Strong growth at the group's shops in the Hellenic Republic drove a 13% rise in like-for-like revenue in its southern European region.

In contrast, its UK & Ireland business increased revenue by 4%, but the performance took a 1% blow from store refurbishments.

Revenue from shops in its Nordic region increased 2%. Overall group revenue rose 9% and like-for-like revenue lifted 4% in the 13 weeks to July 30.

Dixons Carphone said it had not seen any visible evidence so far of an impact from the EU referendum vote on consumer behaviour in the UK.

Chief executive Seb James said: "We're optimistic about the future and about our ability to continue to outperform, without in any way being complacent."

Hargreaves Lansdown equity analyst George Salmon highlighted the boost that the iPhone 7 could give the group.

He said: “Dixons Carphone has again reported strong numbers and joins the lengthening list of companies that have seen no discernible impact on the UK consumer from the Brexit vote.

"The group will be rubbing its hands together after yesterday’s launch of the iPhone 7, and the introduction of wireless headphones opens up a whole new market.

"Dixons Carphone’s robust revenue growth is impressive, all the more so given macroeconomic headwinds in its core UK, Nordic and Southern European markets."

Liberum Capital said: "With trading ahead of expectations and comparatives tart to ease as we move through the year, we remain confident that we could be upgrading as we move through the year.

"The shares are weak and remain under-valued and we advocate a strong 'buy'."

Shares rose 15.6p, or 4.2%, to 389.8p in afternoon London trading.

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Thu, 08 Sep 2016 15:55:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/163632/dixons-carphone-sales-rise-amid-greek-cheer-163632.html
<![CDATA[News - Dixons Carphone says Brexit will mean opportunities ]]> http://www.proactiveinvestors.co.uk/companies/news/127637/dixons-carphone-says-brexit-will-mean-opportunities-127637.html Electricals and mobile phone retailer Dixon Carphone (LON:DC.) shrugged off last week’s Brexit vote, saying it would mean more opportunities in both Europe and the UK.

“As the strongest player in our market and despite the volatility that is the inevitable consequence of such change, we expect to find opportunities for additional growth and further consolidate our position as the leader in the UK market," said Seb James, chief executive.

Dixons Carphone posted strong profits growth in the year to April, with the headline number up 17% to £447mln and statutory profits of £161mln (£97mln).

Revenues rose by 5% to £9.74bn, with the UK showing like-for-like growth of 6% at £6.4bn while cost savings and store reductions meant underlying profits rose by 20%.

Mobile did very well, said the group, while in hardware white good sales outshone computers.

Dixons has a large European operation and Nordic sales dropped 3% due to the strength of sterling, In southern Europe, Greece held up well in local currency terms but Spain struggled.

The dividend for the year is 9.75p up 15% year-on-year.

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Wed, 29 Jun 2016 10:09:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/127637/dixons-carphone-says-brexit-will-mean-opportunities-127637.html
<![CDATA[News - Dixons Carphone sees profits at top end of hopes ]]> http://www.proactiveinvestors.co.uk/companies/news/126357/dixons-carphone-sees-profits-at-top-end-of-hopes-126357.html Home electrical retailer Dixons Carphone PLC (LON:DC.) forecast annual profits at the top end of expectations after mobile phones drove a strong performance.

Dixons Carphone said it now expected group annual headline pre-tax profit to be between £445mln and £450mln, up 17% over last year.

The group, which owns Currys and PC World as well as Carphone Warehouse, said that was towards the top half of previous guidance.

The company attributed the strong performance partly to a good year in the UK & Ireland, where full-year like-for-like revenues rose 6% driven by mobile phone market share gain and good growth in electricals.

Total revenues rose 2% while fourth quarter like-for-like revenues lifted 4% against a particularly strong sales number at the same time a year ago.

Outside the UK, there were more market share gains across electricals and mobile in the Nordics and Greece

The group's Nordics arm increased full-year like-for-like revenues by 4%. 

Its Southern European business had a good year despite turbulent trading conditions, also boosting full-year like-for-like revenues by 4%.

Fourth quarter like-for-like revenues were flat despite a government laptop promotion in Greece in the prior year.

Group like-for-like revenues rose 5% in the fourth quarter and the year as a whole. It expected net debt at the end of the year to be below £300mln.

The Share Centre said before the trading update that the market would be interested to hear if the market share gains in its European business had continued.

It said investors would be looking for any signs of customers delaying purchases until after the UK's EU referendum.

Chief executive Seb James said: "There has been much commentary about the state of mind of UK consumers.

"Our view is that consumers are ready to spend but have - rightly - become more canny, and so need to be tempted with great deals and exciting new products. We see this as encouraging."

Shares in the group rose 5.6p, or 1.3%, to 453.74p in early London trading.

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Wed, 25 May 2016 08:10:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/126357/dixons-carphone-sees-profits-at-top-end-of-hopes-126357.html
<![CDATA[News - Dixons Carphone profit above hopes after record Black Friday ]]> http://www.proactiveinvestors.co.uk/companies/news/121748/dixons-carphone-profit-above-hopes-after-record-black-friday-121748.html Dixons Carphone (LON:DC.) had a record Black Friday, helping the electrical retailer to predict annual profits ahead of hopes.

The company said a strong performance during the price-cutting event in late November and buoyant discounted sales after Christmas boosted group like-for-like revenue in the 10 weeks to January 9 by 5%.

It said it now expected group headline pre-tax profit in the full year to be between £440mln and £450mln, slightly ahead of consensus.

Dixons said it did well in all its regional markets, gaining market share particularly in UK mobile sales.

In the Nordics it had a strong Black Friday and sales rose during the period, but currency weakness and oil price continued to affect the Norwegian market.

In Southern Europe it had a strong peak with its Greek business in particular going from strength to strength, contrasting with the country's well-documented economic woes.

Chief executive Seb James said: "This has been a good year. It has been a pleasing few weeks for which the team have fought hard in a competitive market."

Shares in the group rose 2.9p to 470p in early London trading.

 

 

 

 

 

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Tue, 26 Jan 2016 08:20:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/121748/dixons-carphone-profit-above-hopes-after-record-black-friday-121748.html
<![CDATA[News - Dixons Carphone reports a strong Black Friday ]]> http://www.proactiveinvestors.co.uk/companies/news/120523/dixons-carphone-reports-a-strong-black-friday-120523.html Electrical goods retailer Dixons Carphone (LON:DC.) reported a good Black Friday as it posted higher first-half revenue and profit.

Dixons Carphone said it put in a strong performance during the US-derived discounting event last month.

There had been industry concern that the event was quieter than last year as some retailers reined back their involvement.

Analysts also voiced fears that cash-strapped shoppers saving up for the bargains had led to lacklustre retail sales in November.

Dixons said first-half group like-for-like revenue climbed 5% in the 26 weeks to October 31, with like-for-like revenue in the second quarter up 3%.

Group pro-forma headline pre-tax profit rose 23% to £121mln following market share gains across the UK & Ireland, Greece, the Nordic countries and Spain.

The company, formed from the merger of Dixons Retail and Carphone Warehouse in 2014, increased the interim dividend by 30% to 3.25p.

Chief executive Seb James said the UK & Ireland business started the year well, with notable growth in the sale of white goods offsetting a fall in demand for tablets and PCs following recent market trends. Television sales held up well despite a challenge to match a good performance last year driven by soccer's World Cup.

The Nordic business broadly maintained profits at constant currencies, although that was masked by foreign exchange headwinds when translating the division's profits into sterling.

Dixons, which trades as Kotsovolos in Greece, was particularly pleased to see progress in southern Europe despite a "lively year in the Greek political and economic scene".

James said: "Overall then, I am very pleased with this performance but there is lots left to play for.

"A strong Black Friday was a great start to Christmas and I will look forward to communicating again in January with a more complete view of the season and plans for the year ahead."

Dixons also announced the appointment of former BT (LON:BT.) chief executive Ian Livingston as its deputy chairman. He also served as finance chief of Dixons Group between 1996 and 2002, having served in a number of roles over more than a decade in the company.

Shares in the group, which owns the Currys PC World chain, rose 16.1p, or 3.4%, to 492.8p in early London trading.

Broker Hargreaves Lansdown said the benefits of the Dixons Carphone merger were becoming increasingly evident "as the group forges ahead on revenues and profit".

Analyst Richard Hunter pointed to less positive factors such as currency headwinds. "From an investment perspective the dividend yield of 1.4% is anaemic in the current environment, even if it is to be raised 30% as stated in the announcement," he said.

But Hunter added: "The shares have comfortably outperformed the market of late, having risen 12% over the last year, as compared to a 3% dip for the wider FTSE100.

"The overall positives within this update means that the market consensus of the shares as a strong buy is unlikely to be disturbed."

 

 

 

 

 

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Wed, 16 Dec 2015 08:25:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/120523/dixons-carphone-reports-a-strong-black-friday-120523.html
<![CDATA[News - Retailers had a cautious Black Friday amid Christmas sales fears ]]> http://www.proactiveinvestors.co.uk/companies/news/119835/retailers-had-a-cautious-black-friday-amid-christmas-sales-fears-119835.html Retailers cut back on Black Friday discounts amid fears that they could take a hit in the run-up to Christmas, according to brokers.

Consumer electronics chains reduced discounts during this year's bargain-fest compared to 2014's event, analysts said.

Fashion retailers were offering bigger discounts to off-load unsold winter clothing, but still appeared mostly to have offered smaller discounts than last year.

However, Debenhams (LON:DEB) and Marks & Spencer (LON:MKS), which offered savings of up to 70% and up to 50% respectively, may still have the biggest exposure, Liberum Capital said.

High street retailers are reported to have had a fairly quiet day on Friday, with bargain-hunters preferring to stay home and seek out deals on the internet.  

Analysts are set to pay close attention to results from several retailers in December to work out how the sector fared - and what the impact may be on festive sales.

Topps Tiles will post annual results on Tuesday December 1 and Sports Direct (LON:SPD), Darty (LON:DRTY), Carpetright (LON:CPR), Dixons Carphone (LON:DC.) and Supergroup (LON:SGP) are all due to update the market later in the month.

Liberum retail analysts said in a note: "Black Friday and our channel checks show retailers have realised that giving products away with 28 shopping days left to Christmas makes no sense."

Shoppers were forecast to spend nearly £2bn on Black Friday this year, with £721mln of that on the internet.

But analysts voiced fears that sales before and after the event may suffer as cash-strapped consumers save up to buy bargains, then cut spending in the run-up to Christmas.

Liberum said consumer electronics was the biggest battleground last year, although the atmosphere in stores and online this year was much calmer.

Game Digital in London's Stratford Westfield shopping complex was offering a limited number of deals and Home Retail's (LON:HOME) Argos store nearby was quieter, the broker said.

But Argos was among retailers reported to have had website problems as higher-than-usual numbers of shoppers hunted for deals online.

Liberum said there were some "attractive deals" elsewhere, such as at Dixons Carphone, which was also offering a limited number of discounted products.

Meanwhile, shoppers were expected to spend £1bn on Cyber Monday, with spending tipped to increase by 31% on last year as retailers cut online prices.

Shore Capital said Black Friday this year was likely to have led to a spending lull in November, prompting retailers to adjust their trading strategies next year.

The broker's retail analysts said: "Whilst all this learning ‎should make for a more balanced and profitable, or is that less loss-making, Black Friday for some, on a broader horizon, it looks like the shopper is winning over the shareholder when the broader peak period to New Year is considered.

"As such, we see relatively few grounds to be anticipating earnings upgrades from the retail trade in the UK as a result of the evolving Black Friday and Christmas period, whilst we hold our breath for any retailers that may have dropped a Black Friday ball."

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Mon, 30 Nov 2015 13:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/119835/retailers-had-a-cautious-black-friday-amid-christmas-sales-fears-119835.html
<![CDATA[News - Retailers voice confidence but clouds gather over sector ]]> http://www.proactiveinvestors.co.uk/companies/news/110696/retailers-voice-confidence-but-clouds-gather-over-sector-110696.html Retailers came out with some sunny numbers on Thursday, but storm clouds may be gathering over the high street.

In a busy day for the sector, electrical retailer Dixons (LON:DC.) and fashion chain Next (LON:NXT) were both upbeat on trading in the last few months.

But other retailers such as John Lewis and Argos owner Home Retail (LON:HOME) reported falling electrical sales in August, while Dixons failed to comment on trading in the month.

Broker Cantor Fitzgerald said the overall electrical market slowed in August as people spent more on summer holidays and leisure.

Analyst Mike Dennis said newly confident consumers splashed out on big ticket items last year following years of belt-tightening after the financial crisis.

But they may now be returning to more normal spending levels.

People are also buying fewer Apple iPads, meaning they are visiting department stores and electrical retailers less and making fewer impulse buys of other electrical goods.

Dennis said: “We’re now annualising out that boost in spending in 2014 and you’re not going to get it again in 2015.”

Optimistic

Dixons reported an encouraging quarter up to the beginning of August, pointing to significant market share gains in phone sales after the launch of Apple’s iPhone6.

Shares in Next were also in vogue after the clothing retailer hailed better buying, productivity improvements and store closures for higher first-half profits.

Chief executive Simon Wolfson conceded that its forecast of a rise in full-year sales of up to 6% “might appear optimistic”.

But he added: “Last year was unusually strong in the first half and much weaker in the second half, with sales in September, October and early November adversely affected by unusually warm weather.”

Analysts said the weather may determine the outlook for clothing retailers in the autumn.

Head of retail at accountants and tax advisers KPMG, David McCorquodale, said: “The fashion world will be hoping last year’s Indian Summer does not repeat itself, resulting in heavy discounting to move seasonal items.”

Airlines have been among the only beneficiaries of the summer showers, with Ryanair saying people flying to the sun boosted passenger numbers.

But the economic weather has already started to turn worse for Home Retail, which said in its own update on Thursday that August had been a tough month as sales fell again, particularly in electricals.

John Lewis also said electrical sales in the week to August 29 fell 9.3%, failing to match a strong performance last year.

Dixons added to the uncertainty by failing to comment on trading in August, a month in which other retailers suffered due to the rain.

Faltering economy

Global economic uncertainty and dire British economic data have triggered fresh concerns about consumer spending.

The British Retail Consortium reported this week that UK retail like-for-like sales fell 1% in August against a year ago, when they rose 1.3%.

Official figures on Wednesday showed manufacturing output falling in July – rather than rising as economists had forecast - and the trade deficit widening sharply.

And data in July showed UK unemployment rose for the first time in two years in the three months to May.

Capital Economics said: “The economic recovery in the UK appears to have faltered (albeit temporarily in our view), the labour market has weakened and a return to deflation in the next few months is likely.”

One of the few bright spots for retailers hoping to keep shoppers’ attention is low inflation and interest rates.

Once again, the Bank of England decided to keep rates on hold at its September meeting, with only one member of the rate-setting committee voting for a rise.

The British Chambers of Commerce said the UK economic recovery was facing obstacles and policy-setters should keep rates on hold until well into 2016.

BCC chief economist David Kern said: “The UK’s strong labour market has suffered a setback in the second quarter and the trade and manufacturing figures published by the ONS yesterday were disappointing.

“When major international organisations such as the World Bank and the IMF have warned against putting up interest rates, it would be premature and risky for the UK to consider such a step.”

Shore Capital retail analyst Clive Black remained upbeat. He said: “With consumer confidence remaining resilient and real incomes rising, there are grounds to believe UK retail can remain robust in the run-up to Black Friday and Christmas."

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Thu, 10 Sep 2015 15:10:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/110696/retailers-voice-confidence-but-clouds-gather-over-sector-110696.html
<![CDATA[News - Dixons Carphone reports encouraging summer ]]> http://www.proactiveinvestors.co.uk/companies/news/110677/dixons-carphone-reports-encouraging-summer-110677.html Electrical retailer Dixons Carphone (LON:DC.) reported an encouraging quarter but stayed silent on the impact of bad weather last month.

Dixons said group like-for-like revenues in the 13 weeks to August 1 rose 8% with continued momentum in the UK and Ireland, where revenue rose a tenth.

There was a good performance in the Nordics with like-for-like revenue up 4%.

Like-for-like revenue in southern Europe stayed flat, but trading in Spain improved and the group's Greek business increased sales despite tough markets.

Dixons said significant market share gains in phone sales on the back of the launch of Apple's iPhone6 largely drove strong like-for-like UK revenues.

The group did not comment on sales since the start of August, a month in which other retailers have suffered due to the wet weather.

Chief executive Seb James said: "Overall, we've had a very good start to the trading year but I'm aware there's plenty of the year left to go."

Dixons shares rose 9.1p to 429p.

Rival electrical retailer John Lewis Partnership on Thursday posted a 26% fall in pre-tax profits before one-off items to £96mln in the six months to August 1.

The department store group blamed higher pension charges, restructuring costs at John Lewis, and booking extra holiday pay for staff.

Lewis also said electrical sales in the week to August 29 fell 9.3%, which failed to match a strong performance last year.

Broker Cantor Fitzgerald said: "We believe Dixons Carphone UK continues to outperformed John Lewis’s electricals and home technology which were up c.1.4% over the same period.

"However, the gap with John Lewis has halved despite Dixons improving pricing, service and range, and the overall electrical market has slowed with more spending going on summer holidays and leisure."

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Thu, 10 Sep 2015 09:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/110677/dixons-carphone-reports-encouraging-summer-110677.html
<![CDATA[News - Dixons Carphone switches on to higher profits ]]> http://www.proactiveinvestors.co.uk/companies/news/109054/dixons-carphone-switches-on-to-higher-profits-109054.html --- adds broker comment and share price ---

Dixons Carphone (LON:DC.) hailed a "terrific" first year for the merged electrical retailer as annual profits rose more than a fifth.

The group, which was formed last year from the tie-up between Dixons Retail and Carphone Warehouse, said headline pre-tax profit increased 21% to £381mln in the 13 months to May 2.

Total like-for-like revenue rose 6% to £9.9bn and the company lifted its final dividend to 6p from 4p last time, making a total dividend of 8.5p, up 42%.

Dixons, which owns Currys and PC World, said its integration was going well and was on target to save at least £80mln by 2016/17, one year ahead of plan.

UK and Ireland revenue rose 8% and Nordics revenue increased 4% but southern European revenue declined a tenth.

In the UK and Ireland, the peak period, which stretches six weeks from 'Black Friday' into the new year, was particularly strong with both small and large white goods, as well as large screen TVs, selling very well.

Mobile also did well, with post-pay volumes and market share continuing to rise year-on-year, driven by the market exit of Phones 4U and successful product launches.

Dixons blamed the southern European fall on currency movements. It said its Greek business returned to profit during the year despite the country's economic and political turmoil, with large-screen TVs selling particularly well.

It said its Spanish business continued to face a tough market, but a deal with Telefonica to sell Movistar products and services had a positive effect.

The group also streamlined its continental European business by disposing of non-core assets.

Chief executive Seb James said: "This has been a terrific first year for Dixons Carphone. We have seen excellent increases in both sales and profitability and we have made very encouraging progress with the tricky job of integrating these two great companies.

"The job is far from done. I am acutely aware that there is no room for complacency in a sector which has seen unprecedented change, bringing both opportunities and challenges.

"Nevertheless we are very optimistic about the road ahead."

The group's shares rose 3.2p to 464.7p.

Investec, which repeated its 'buy' advice on the shares, said the retailer had a strong year, marked by market share gains in core businesses.

In addition, an improved UK mobile market was allowing for data usage growth and 4G roll-out to deliver positive average revenue per user, the broker said.

"The outlook statement remains upbeat and Connected World Services continues to show encouraging levels of profitability. Valuation remains undemanding with self-help, restructuring and market share gains to drive robust earnings growth."

Keith Bowman at Hargreaves Lansdown said: "In all, management has to date delivered. Merger cost savings are being squeezed, the repositioning of its overseas operations remains ongoing, while management initiatives to improve customer satisfaction are enjoying success.

"For now, with market share gains being made, the US now back on management’s radar and the company remaining a potential beneficiary of the expected growth in the so called ‘internet of things’, analyst consensus opinion continues to point towards a buy.”

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Thu, 16 Jul 2015 15:30:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/109054/dixons-carphone-switches-on-to-higher-profits-109054.html
<![CDATA[News - In the papers - IMF says Greece needs further debt relief ]]> http://www.proactiveinvestors.co.uk/companies/news/109000/in-the-papers-imf-says-greece-needs-further-debt-relief-109000.html The Telegraph reports on the IMF’s latest intervention in to the Greek debt crisis.

Greece may need a full moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression, the lender said.

"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report.

The Telegraph says the report amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief.

Britain’s banks, meanwhile, face a £40bn decade-long tax headache as a result of industry specific levies imposed by the Chancellor, the Telegraph writes.

New figures from lobby group the BBA, show that the banking sector will pay out £39.35bn in five extra taxes – in addition to corporation tax and national insurance - between 2010/11 and 2020/21.

The Securities and Exchange Commission is investigating whether a sudden spike in Twitter’s share price on Tuesday was caused by market manipulation.

Twitter's stock jumped 8.5% after a fake story said the company had received a $31bn buyout offer.

The SEC "is looking into the matter to uncover whether the authors of the story made money from the social network's share price movement, the Telegraph reports.

The head of Dixons Carphone has hit out at a proposed £2bn apprenticeship levy, accusing the government of feeding an army of consultants.

Sebastian James, chief executive of Dixons Carphone, also criticised  the government’s core business policies, highlighting inconsistency, bureaucracy and the cost in public subsidies, reports the Times.

JP Morgan Chase reported a stronger-than-expected rise in second-quarter profit as it took an axe to expenses, the Times writes.

The US’s biggest bank by assets reported second quarter earnings of US$6.3bn, up from US$6bn for the same period last year. Revenue fell 3.2%.

BT will today face accusations that its pay structure can lead to lavish windfalls for its executives, reports the Mail.

At the telecoms giant’s annual meeting, small shareholders will call into question the scale of the packages handed to its top bosses.

GlaxoSmithKline is linking up with respected research body the Francis Crick Institute to collaborate on a range of new drugs.

Britain’s biggest pharmaceuticals company said teams of scientists from each organisation would work side-by-side at the Crick’s centre of biomedical research in London and GSK’s global research and development hub in Stevenage, the Mail writes.

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Wed, 15 Jul 2015 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/109000/in-the-papers-imf-says-greece-needs-further-debt-relief-109000.html
<![CDATA[News - In the papers: Germany turns the screw on Greece ]]> http://www.proactiveinvestors.co.uk/companies/news/108906/in-the-papers-germany-turns-the-screw-on-greece-108906.html New chairman tops Unilever’s shopping list: The consumer goods giant has called in Russell Reynolds Associates, the head-hunter, to identify candidates to replace Michael Treschow.

Hedge funds to pour cash in Co-operative Bank: The Co-op Bank has received interest from hedge funds that want to invest in the problem-hit lender

Reddit boss quits in war over free speech:

A furious row over the limits of free speech has divided users of Reddit

The Independent

Tsipras given ultimatum - push through cuts by Wednesday or quit the euro: Greece PM cornered by Eurozone leaders as Angela Merkel admits trust has broken down.

The Guardian

Greek debt crisis: Tsipras resists key bailout measures after 15 hours of talks: Talks stalling on two points - IMF involvement in a new three-year bailout, and a German demand for Greece to give up €50bn in public assets as collateral.

China trade slumps in first half of year, dealing blow to global economy: Falling commodity prices and ‘sluggish foreign demand’ blamed for fall in trade growth by world’s second-largest economy.

The Telegraph

Heathrow Airport northern runway blocked by Plane Stupid activists: Dozen demonstrators from direct action group enter runway at 3.30am and chain themselves together after cutting hole in fence.

Eurozone split over Grexit ultimatum plan as Greeks says they are being 'crushed': Negotiations continue into the early hours of the morning as Greek prime minister Tsipras fights to gain "honourable compromise" and stay in the euro

Panic-buying Greeks boost sales at Dixons Carphone: Chief executive Seb James gives backing to BT's £12.5bn takeover of EE.

Axa completes £2.8bn deal to protect pensions from risk of longer lives 

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Mon, 13 Jul 2015 07:04:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/108906/in-the-papers-germany-turns-the-screw-on-greece-108906.html
<![CDATA[News - Dixons Carphone launches US shop joint venture with Sprint ]]> http://www.proactiveinvestors.co.uk/companies/news/108615/dixons-carphone-launches-us-shop-joint-venture-with-sprint-108615.html Electricals retailer Dixons Carphone (LON:DC.) has struck a deal with US telecoms group Sprint Corp (NYSE:S) to open a chain of mobile phone shops in the US.

Dixons said its connected world services (CWS) arm had signed an agreement to supply mobile phone retail services and expertise for about 20 stores.

If the venture succeeds, the pair will launch a second phase involving CWS investing equally with Sprint in a joint venture to roll out 500 stores.

In the second stage, Dixons will pay up to US$32mln for a 50% stake in the joint venture that will be used to fund the shops.

Dixons' deputy group chief executive and CWS boss Andrew Harrison said: "This is a very exciting venture for us and a significant step in growing our CWS business in the US."

The move comes after Dixons Retail and Carphone Warehouse merged last year to form Dixons Carphone, which owns Currys and PC World.

The combined group has since launched a shake-up involving disposal of non-core businesses in continental Europe.

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Thu, 02 Jul 2015 07:45:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/108615/dixons-carphone-launches-us-shop-joint-venture-with-sprint-108615.html
<![CDATA[News - Dixons Carphone profits set to spark higher than hoped ]]> http://www.proactiveinvestors.co.uk/companies/news/107643/dixons-carphone-profits-set-to-spark-higher-than-hoped-107643.html British electrical retailer Dixons Carphone (LON:DC) forecast annual profit ahead of expectations after a cut-price Easter and an international shake-up.

Dixons said group pro-forma headline pre-tax profit should be slightly above the top end of the previously predicted range of £355mln to £375mln.

The company, which merged with Carphone Warehouse last year, said strong promotional periods including Easter had driven good trading.

A sell-off of unwanted international businesses in continental Europe and elsewhere had also helped.

Group like-for-like revenue in the fourth quarter rose 9% and by 6% in the full year.

Same shop sales in the UK and Ireland were up 13% on the same period last year and the group's Carphone Warehouse store-within-a-store concept continue to do well.

There are now 233 open within CurrysPCWorld shops and the company is opening four more a week.

Dixons said it had a strong balance sheet with year-end net debt expected to be better than guidance of £300mln.

The company gained market share in the Nordic region. But Q4 like-for-like revenue growth was slower than previous quarters due to the impact of the weaker oil price on the Norwegian economy and its currency, as well as a softer consumer backdrop in Finland.

In Southern Europe, a strong performance in Greece - despite its economic and political problems - drove a like-for-like sales rise of 8%. The market in Spain remains tough but Dixons' shops had improved quarter-on-quarter trading boosted by the distribution of Movistar quad play.

Chief executive Seb James said: "Also, I am really pleased that we have launched our new mobile virtual network operator, iD. So far it is doing everything we hoped it would."

Shares in Dixons Carphone climbed 5.2p to 484.5p in early London trading.

Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers, said: “A profit upgrade on a profit upgrade is testament to the early benefits of the Dixons Carphone merger.

Indeed, such is the success the merged company is enjoying, there was even revenue growth in Greece, whilst the Southern European region as a whole moved into positive territory. Less positively, there are challenges in the Nordic region, although these are being addressed, whilst the dividend yield remains paltry at 1.1%.

"Even so, the increasingly pervasive “internet of things” will provide a threat for some, but an opportunity for others and the current signs are that Dixons Carphone will fall into the latter category. Since the merger last August the shares have risen 38%, during which time the wider FTSE100 has added 5%. With the building blocks in place and prospects continuing to shine, the market consensus of the shares as a strong buy will most likely remain intact following this update.”

 

 

 

 

 

 

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Wed, 03 Jun 2015 08:35:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/107643/dixons-carphone-profits-set-to-spark-higher-than-hoped-107643.html