By James Davey
LONDON (Reuters) - Dixons Carphone <DC.L>, Britain's biggest seller of electricals and mobile phones, said it was in good shape to operate effectively in all Brexit scenarios, including the country leaving the European Union without a deal.
Business leaders have warned of chaos at ports if the UK does not agree on terms for its withdrawal from the EU, now just over two months away.
“We can’t rule out that there might be some form of interruption. If there is, we are as well prepared as we can possibly be," finance chief Jonny Mason told reporters on Tuesday after the firm updated on Christmas trading.
He said the group, which imports most of its product from Asia, had worked with suppliers to make sure product will keep flowing. "Some of them have brought stock into the country so that it’s closer to where it needs to be for us," he said.
CEO Alex Baldock said Dixons Carphone's size gave it an advantage. "Because of the market leadership positions that we’ve got …we matter a lot to our suppliers," he said.
"To almost all of these suppliers we’re by some distance their largest customer in the UK. That translates into preferential treatment when it comes to being first in the queue for scarce stock."
Dixons Carphone said its turnaround plan had made a good start, reporting a small rise in underlying revenue over Christmas and keeping its full-year profit guidance.
Its shares, down 26 percent year on year prior to the update, rose as much as 5.5 percent.
A day earlier the stock had risen after Sky News reported that activist investor Elliott Advisors was exploring plans to buy a "big stake" in the retailer.
Baldock declined to comment on the report.
Dixons Carphone has been hurt by tougher conditions in the mobile phone market as customers keep their handsets for longer.
Last December it slumped to a 440 million pound ($566 million) first-half loss, cut its dividend and launched a new strategy.
Under Baldock the group plans to focus on its core electricals business while revitalising its mobile business.
It also wants to bring its stores and online businesses closer together and develop its credit business.
It said on Tuesday that the early signs were encouraging.
Group like-for-like revenue rose 1 percent in the 10 weeks to Jan. 5, edging analysts' average forecast for a flat outcome.
In Dixons Carphone's main UK & Ireland business, electricals like-for-like sales rose 2 percent but mobile sales on the same basis fell 7 percent, reflecting a continued decline in the post-pay market.
"In UK electricals we grew sales, despite a challenging backdrop and a declining market," said Baldock, highlighting strong performances in televisions, smart technology and gaming.
"In UK mobile, performance was as expected," he said.
The group also trades as Elkjøp, Elgiganten and Gigantti in Nordic countries and Kotsovolos in Greece. Like-for-like sales rose 3 percent in the Nordics and jumped 19 percent in Greece.
Gross profit margins across the group were stable and it kept its guidance for a 2018-19 underlying pretax profit of around 300 million pounds, down from 382 million in 2017-18.
"Its mobile offer faces a number of ongoing cyclical and structural headwinds and may be an ongoing drag on profitability," said RBC Europe analyst Richard Chamberlain.
($1 = 0.7774 pounds)
(Reporting by James Davey; editing by Mark Potter and Jason Neely)