Dixons reinstates dividend after homeworking boosts sales

Dixons Carphone has reinstated its dividend after a sales boom in homeworking equipment, coffee machines and game consoles during lockdowns helped it swing back to profit.

The London-listed group, which is preparing to rebrand its UK business Currys, said on Wednesday that online sales of electronics more than doubled to £4.7bn in the year to May.

Soaring demand for gadgets and devices among people stuck at home helped the company reach a pre-tax profit of £33m, compared with a £140m loss the year before. It also offset the impact of store closures, with like-for-like revenues up 2 per cent to £10.3bn.

“Technology has become even more central to people’s lives,” said chief executive Alex Baldock, adding that three-quarters of Dixons’ customers were now spending more on tech than before the pandemic, which changed habits in working and entertainment.

With lockdown restrictions still in place in countries including the UK, it is yet unclear which lockdown habits people will stick to.

Dixons said there was evidence of its markets being “structurally larger post-pandemic”, while analysts at Investec expected electronic sales in the UK and Ireland to drop by roughly 4 per cent over the next year.

The financial boost from lockdown sales prompted the company to reinstate its dividend at 3p a share, adding that this was “expected to grow”. It has also repaid furlough support worth £73m and £144m in VAT deferrals to the UK government.

Ben Hunt, analyst at Investec, said Dixons’ “strong” full-year results had alleviated fears that online sales would turn out to be profit dilutive.

Store closures, however, hit Dixons’ largely store-based mobile phone business, which had £89m in losses before interest and tax.

Dixons’ share price, which over the year has recovered close to its pre-pandemic levels, was down by slightly above 1 per cent on Wednesday morning.

The group had previously considered floating its Nordics business, something that Baldock said it had decided against.

Baldock also brushed off a question regarding potential private equity bids following recent interest in supermarkets Asda and Morrisons. “We are super focused on what lies within our control,” he said.


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