Last year’s merger between Dixons Retail and Carphone Warehouse appears to be paying off. The newly-merged group’s fortunes have continued to swell in the 18 months since the two retailers inked a deal, and now the business is gearing up for further growth.
Dixons Carphone announced it was giving its boardroom a spring-clean today, alongside a 23% jump in profits and a record day of sales on Black Friday. Its deputy chairman and the former chief executive of Carphone Warehouse, Roger Taylor, and long-time NED John Gildersleeve are both moving on.
They have been replaced by former BT boss and government trade chief Ian Livingston (Baron Livingston of Parkhead to you and me) and former Asda chief exec Tony De Nunzio. Livingston, who was the FD of Dixons in his younger days, will be a particularly useful asset as the retailer aims to grow its Connected World Services division, which is focused on business customers and investing in the so-called ‘internet of things’.
‘I feel that, in Ian and Tony, we have found perfect additions to our distinguished Board, which give us very helpful additional expertise in our core business of retail and our developing telecoms and B2B services areas,’ said chairman Charles Dunstone.
The company’s latest financials are looking pretty robust. Though its headline revenues in the 26 weeks to October 31 were down slightly to £4.4bn due to currency fluctuations, like-for-likes were up 5% across the group and 7% in the UK and Ireland, and total profits were up to 23% to £121m. UK sales were boosted by demand for white goods and the collapse of Phones4U has helped a lot too, allowing Carphone Warehouse to scoop up a bigger share of the mobile market.
It sounds like things have been going well since then too. Finance director Humphrey Singer told the FT that Black Friday was the retailer’s biggest day of trading in history, as it took five online orders per second, up 56% on last year’s discount frenzy. Though Singer admitted sales had now hit a bit of a lull, he expects another boom on boxing day. Investors are certainly looking optimistic – the company’s shares were among the biggest risers in the FTSE 100 today, up 3% to 491p.
‘Our integration continues to go well and it gives me real pleasure to see the business looking and feeling like a single unit,’ said chief exec Sebastian James (look out for MT’s exclusive interview with him in February). ‘I think that, with nearly all the bigger changes done, we are now ready to settle into a more normal married life and to think about our business as a single Dixons Carphone entity.’
Things are certainly looking pretty rosy for the happy couple at the moment. But as consumer tastes in tech change and online-only retailers nibble away at the market, we'll have to wait and see how long the honeymoon can last.