Dixons Carphone set to net £151m profit as online growth plan pays off

Dixons Carphone is expected to reveal £151 million in profits for the past year after it saw its online-focused strategy shift accelerated by the pandemic.

The electricals retailer is expected to announce the pre-tax profit, broadly in line with analyst predictions, in its full-year trading update on Wednesday June 30.

The group has already said that it expects to unveil a doubling of online sales to around £4.5 billion for the year to April, in the announcement next week.

Sophie Lund Yates, equity analyst at Hargreaves Lansdown, said: “Covid meant the electrical equipment specialist had to speed up its pivot to digital.

“The group has doubled down on its online service proposition, launching its ShopLive function, which connects customers to a real-life store assistant for help and product demonstrations.

“We wonder if this has helped keep online momentum moving in the right direction, even as restrictions ease.”

It said that it expects to deliver around 14% growth in group electricals revenues for the year, with 13% UK and Ireland growth for the period.

Nevertheless, its profits have been impacted by the firm’s decision to repay the £73 million in furlough support it received from the Government.

In April, Dixons Carphone also confirmed plans to close its airport store business Dixons Travel after it was hammered by the pandemic and the end of tax-free tourist shopping.

The 35-store business employed around 400 staff although the group said these were all offered roles elsewhere in the business.

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Analysts at Liberum said they do not believe the cost impact of cutting its store portfolio “should detract” from recent progress in its turnaround plan.

The broker said the group has seen “underlying momentum” despite being impacted by store closures and its turnaround initiatives “position Dixons Carphone as a better business emerging from the pandemic.”

Investors will also be keen to hear more details next week about the company’s rebranding plans it announced earlier this year.

The listed company will change its name from Dixons Carphone to Currys Plc in September following its annual general meeting.

More than 300 of the retailer’s stores are then set to unite under the Currys brand from October and shareholders will be keen to hear how this will link with the firm’s shift in strategy.