They say half of mergers fail, but there are signs that Dixons and Carphone Warehouse made the right choice. The electronics giant and mobile phone seller tied the knot back in August and the newly formed Dixons Carphone, which includes the PC World and Currys Brands, today reported like-for-like sales growth of 9% in the three months to November 1st, driven by 11% growth in UK and Ireland.
Chief exec Sebastian James said the division had delivered a 'barnstorming performance' thanks to 'improvements in price and service', 'competitive changes' (the controversial collapse of Phones4u), new launches and an improving economy. 'The integration of our business seems to be going better than I dared hope, and our integrated stores are trading very well which augurs well for the future,' he said.
The demise of Phones4u was a boon to Dixons Carphone as it hoovered up customers and outlets, and scored a PR win by taking on hundreds of workers who had been made redundant. The strong performance helped the business deliver a 30% increase in underlying pre-tax profits of £78m in the six months to November 1st, although the it made a loss of £20m when including the costs of the merger.
International performance has been less good. While sales in northern Europe were up 9% in the second quarter, revenues in economically tumultuous southern Europe fell by 5%. This has failed to spook investors though. While the merger initially received a mix reaction from the City, shares have continued to grow since, and leapt 4.24% to 444.8p this morning.
Credit: Yahoo Finance
It's still early days and Dixons Carphone has to face up to the many challenges for retailers at the moment, but for now things could have hardly got off to a better start.