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Dixons Carphone's stellar online performance sends shares higher

James Davey
·2-min read
A sign displays the logo of Dixons Carphone at the company headquarters in London

By James Davey

LONDON (Reuters) - British electricals retailer Dixons Carphone on Wednesday reported a jump in first half profit, benefiting from a strong online performance that more than offset the closure of stores during COVID-19 lockdowns, sending its shares sharply higher.

Shares in the group, which trades as Currys PC World and Carphone Warehouse in the UK, were up 15% at 1030 GMT on Wednesday after it reported adjusted pretax profit of 89 million pounds ($112 million) in the six months to Oct. 31 versus just 2 million pounds in the same period last year.

While its shops in the UK, Ireland and Greece were closed during lockdowns, Dixons Carphone has benefited from people working from home and buying equipment for their houses.

Like-for-like sales of electricals increased 17%, with online sales soaring 114% to 1.8 billion pounds.

The group estimated a profit hit from store restrictions since the start of the pandemic of 155 million pounds - more than the 103 million pounds received in furlough payments and business rates relief.

Several British retailers, whose stores have stayed open during lockdowns, have paid back the relief, but Dixons Carphone CEO Alex Baldock indicated it would not.

"We were tagged non-essential (by government) and our stores were closed which obviously puts us in a different space to some," he told reporters.

Baldock said it was seeing some supply delays due to current disruption at British ports but was confident it would cope when Britain's Brexit transition period with the EU ends on Dec. 31 whether or not a trade deal is sealed.

The group, which makes most of its annual profit in the second half, said the outlook remained uncertain but that trading was strong in the six weeks to Dec. 12, with electricals like-for-like sales up 16%.

Revenue at the group's mobile phone division, which is being restructured, fell 54%, reflecting a decision in March to close standalone Carphone Warehouse stores.

The group said it was continuing to discuss the possibility of listing a minority stake in its Nordics business in 2021.

($1 = 0.7424 pounds)

(Reporting by James Davey; Editing by Estelle Shirbon/Keith Weir)