Dixons Carphone sales jump thanks to pandemic online boost

Booming online sales during the pandemic helped electricals retailer Dixons Carphone swing to a half-year profit as it overcame the hit from store closures during lockdowns.

Shares in the Currys PC World owner soared 11% as it posted statutory pre-tax profits of £45 million for the six months to October 31 against losses of £86 million a year earlier.

It notched up a 16% hike in like-for-like UK and Ireland electricals sales, while online sales jumped 145%, which offset the impact of Covid-19 restrictions on its shops.

The group, which normally makes most of its profits in the final six months of its financial year, revealed that current trading remains buoyant, with same-store sales up 16% in the six weeks to December 12 despite store closures in the UK and Greece.

On an underlying basis, group interim pre-tax profits rocketed to £89 million from £2 million a year earlier.

Dixons Carphone said it received £103 million in furlough support for workers and business rates tax relief, but that it had not used the Job Retention Scheme since October.

It has not followed the lead of a raft of retail rivals in paying back the support, but chief executive Alex Baldock insisted the group has “been responsible in our use of government support”.

He said: “We used the furlough scheme to preserve jobs in the first lockdown, and didn’t use the scheme at all in the second.”

He added the group had been trading against rivals “with one arm behind our back” due to the enforced store closures, but indicated the group would consider repaying some support if strong trading continues.

“The outlook is still uncertain… we have a while to go until the end of our full year so we’ll see,” he said.

The group also revealed it has been affected by the congestion at container ports, with delays of up to two days for some of its goods.

A spike in imports due to the Covid-19 pandemic and fears of a no-deal Brexit have led to bottlenecks at UK ports in recent weeks.

But Dixons Carphone said it “can handle” the delays and has been preparing for Brexit disruption for a long time.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Dixons Carphone has emerged as one of the big retail winners of the pandemic, clearly embracing the e-commerce revolution.

“When stores fully open, its digital prowess combined with its face-to-face service in store, with multiple product categories under one roof, should help Dixon Carphone build on these impressive results.”

Earlier this year, Dixons Carphone announce a £200 million cost-saving plan, which saw it slash hundreds of jobs.

About £100 million of this is related to the company’s mobile business, which has suffered a major overhaul following the closure of all 531 Carphone Warehouse stores.

This was reflected in the results, which showed a 54% plunge in UK and Ireland mobile revenues although losses narrowed to £36 million from £44 million a year ago.