As honeymoons go, this seems to be a long one. Dixons Carphone reported its first full year results as a merged company today, beating expectations and continuing to confound critics who had questioned the wisdom of the two high street retailers tying the knot last August.
The group’s ‘headline’ pre-tax profit (stripping out merger costs and discontinued businesses) rose 21% to £381m, having said in June it would be ‘slightly above’ its previous forecast of £355m-£375m.
Meanwhile, like-for-like sales rose 6% to £9.9bn, boosted by an 8% rise in the UK. The phone and electronics retailer said business was also good in Greece, of all places, as worried consumers snapped up value-retaining big items, ‘in particular large screen TVs’.
That surge won’t last, but the country only accounts for around 3% of total sales, so won’t be causing too many headaches. The company also has a new US venture to distract itself anyway, so may be turning its attention away from Europe more generally.
‘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,’ chief executive Sebastian James said in a predictably bullish statement.
He also took to Twitter to crow:
Looking at where we are now I honestly think the sky's the limit for us. Lots and lots left to do but so much opportunity.— Sebastian James (@DCSebJ) July 16, 2015
Through sector turmoil & change, complex merger, we delivered record customer scores. But we win only when everybody loves us! Lots to do— Sebastian James (@DCSebJ) July 16, 2015
To be honest, it would be concerning if everyone loved a particular retailer (or group of) – especially from a competition perspective. Dixons Carphone has definitely benefited from absorbing former rivals Currys and PC World, as well as the demise of Phones 4 U (the third party in the potential love triangle).
Then again its real opposition is now online giants like Amazon and the mobile phone operators, which have been merging and moving into TV and broadband and would rather you buy direct from them. So James is right to also say, ‘There is no room for complacency in a sector which has seen unprecedented change.’