H1 2019/20 Interim Results

Unaudited Results for the Half Year Ended 26 October 2019
Performance robust, good progress on transformation

  • Group adjusted* profit before tax of £24m (H1 2018/19: £60m)
  • Group statutory loss before tax of £86m (H1 2018/19: loss of £440m)
  • UK & Ireland H1 Electricals revenue -1%, like-for-like revenue flat
    • Q2 like-for-like -2% against tough comparatives
    • Share gains online and in-store against market down -3% in H1
    • H1 profits down as expected given investment in customer proposition
  • International H1 revenue +1%, like-for-like revenue +3%
    • Q2 like-for-like revenue +1% 
    • Share gains across all markets with strong online growth
    • Profit growth driven by sales and operating margin improvements
  • UK & Ireland H1 Mobile revenue -18%, like-for-like revenue -10%
    • In line with plan, guidance for £90m* loss for the year unchanged
    • Traditional postpay market continues to be challenging, down -8% in H1
    • Negative network debtor revaluation of -£26m
  • Transformation driving increasing customer satisfaction across Group
    • Online / Multichannel: Online growth in Electricals +11%. 81 UK stores remodelled
    • Credit: UK Credit adoption over 11%, active customers +15% since year end
    • Services: Improved protection products to launch in the UK this financial year
    • Mobile: New mobile offer to launch in H1 2020/21
    • Colleagues: Quadrupled investment in training. Extending share award
    • One Business: On track to deliver £200m of cost savings by FY22
    • Stronger Infrastructure: Good progress on IT, rephasing of spend on larger projects
  • Adjusted PBT* expected to be around £210m for FY20, as previously guided
  • Capital expenditure to be c.£200m (from £275m) due to rephasing of IT spend, adjusted net debt* expected to be lower year-on-year
  • All medium-term guidance unchanged

* See page 2 for the basis of preparation for all performance measures and guidance given.

Alex Baldock, Group Chief Executive, said:

“We’re on track to deliver what we promised this year, and with our longer-term transformation.

In a tough UK Electricals market, we’ve gained significant share, and strengthened our market leadership. Our planned investments in the colleague and customer experience have played a big part in this resilient performance, demonstrated by sharply increased customer satisfaction scores. Our big International business also registered market share gains in every territory, with solid sales and margin improvements.

And we’ve taken important strides in our transformation. It’s easier for customers to shop how they want: we’re now gaining share Online as well as in stores, where we are investing to create exciting, enticing stores. More customers can also afford the tech they want: we now won’t be beaten on price, and more are taking up our Credit offer. More, too, are getting the most out of their tech through our Services.

Mobile is challenging as expected. As promised, this will be the trough year for Mobile losses, and it will be break-even by 2022.

Good progress, yes, but all of us at Dixons Carphone are shareholders, and conscious that our business is still nowhere near its full potential. We’re determined to realise that potential, and confident we’re on the right path to do so.”

H1 Revenue2019/20
£m
2018/19
£m
Reported
% change
Local
Currency
% change
Like-for-
Like
% change
UK & Ireland Electricals1,9791,997-1%-1%0%
International1,9041,8871%3%3%
 – Nordics1,6771,6750%3%2%
 – Greece2272127%8%8%
Electricals 3,8833,8840%1%1%
UK & Ireland Mobile8301,009-18%-18%-10%
Group4,7134,893-4%-3%-1%
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Quarterly Revenue Q2 2019/20Q1 2019/20
 ReportedLocal
currency
Like-for-
like
ReportedLocal
currency
Like-for-
like
UK & Ireland Electricals-3%-3%-2%2%2%2%
International-2%2%1%4%5%4%
 – Nordics-3%1%0%4%5%4%
 – Greece8%9%9%7%6%7%
Electricals -2%-1%0%3%3%3%
UK & Ireland Mobile-23%-23%-10%-12%-13%-10%
Group-7%-5%-2%0%0%0%

Basis of preparation

In the reporting of financial information, the Group uses certain measures that are not required under IFRS. We consider that these additional measures (commonly referred to as ‘alternative performance measures’ or “APMs”) provide additional information on the performance of the business and trends to shareholders. These measures are consistent with those used internally and are considered critical to understanding the financial performance and financial health of the Group. These APMs (including adjusted results, free cash flow, net debt, local currency % change and like-for-like % change) are defined in the glossary on page 50.

Items excluded from adjusted results can evolve from one financial year to the next depending on the nature of exceptional items or one-off type activities. During the period the Group has adopted IFRS 16 which requires lease liabilities and corresponding right-of use assets to be recognised on balance sheet. The Group has adopted IFRS 16 using the modified retrospective approach, as a result prior year comparative numbers have not been restated. The adoption of IFRS 16 has a material impact on the current year reported performance, composition of net debt and presentation of cash flows for the period. In the current period the adjusting items therefore include the impact of adoption of IFRS 16 using the modified retrospective approach. The Directors believe this adjustment is helpful in the current year to aid shareholders in comparability with prior periods.

Following the separation of the UK & Ireland mobile reporting segment in the prior year, those performance measures, internal targets and KPIs reviewed by the Board and performance guidance given to the external stakeholders have evolved to provide greater transparency over in year trading results. To reflect this, current year adjusting items include the impact of revaluations of network debtor balances due to changes in assumptions, where the original transaction was recorded in periods prior to the current financial reporting year. The removal of such items is considered to be additional useful information to aid the understanding of current year trading. Details of all adjustments can be found in note 2 to the financial information. Prior year comparatives have been restated accordingly.

All guidance is based on assumption of no major macro-economic changes, for example no material impact from Brexit, and the profit numbers also exclude any significant revaluation in network debtors, up or down, which might arise from changes in the regulatory environment or for other reasons. It is also before implementation of IFRS 16.

H1 Profit, EPS and Net Debt
EBIT2019/20 Statutory
£m
2018/19 Statutory
£m
2019/20 Adjusted
£m
2018/19
Adjusted
£m
% change
UK & Ireland Electricals19(44)3142-26%
International554454507%
 – Nordics463847446%
 – Greece967615%
Electricals 748592-8%
UK & Ireland Mobile(107)(423)(49)(21)-133%
Group EBIT(33)(423)3671-49%
Net finance costs(53)(17)(12)(11) 
(Loss) / profit before tax(86)(440)2460 
Tax16(20)(5)(14) 
(Loss) / profit after tax(70)(460)1946 
Basic continuing (loss) / earnings per share(6.0)p(39.7)p1.6p4.0p 
      
Discontinued operations(2)(12)   
Statutory loss after tax(72)(472)   
Basic loss per share(6.2)p(40.7)p   
      
Net debt(1,592)(274)(290)(274) 
More:  Q1 2019/20 Trading Statement

Next announcement

The Group will publish its Peak Trading Statement on Tuesday 21 January 2020. 

For further information

Assad MalicGroup Strategy & Corporate Affairs Director+44 (0)7414 19144
Dan HomanHead of Investor Relations+44 (0)7400 401442
Amy ShieldsHead of External Communications+44 (0)7588 201442
Tim DanaherBrunswick Group+44 (0)207 404 5959

Information on Dixons Carphone plc is available at www.dixonscarphone.com 
Follow us on Twitter: @dixonscarphone

About Dixons Carphone

Dixons Carphone plc is a leading multichannel retailer of technology products and services, operating through 1,500 stores and 16 websites in eight countries. We Help Everyone Enjoy Amazing Technology, however they choose to shop with us.

We are the market leader in the UK & Ireland, throughout the Nordics and in Greece, employing 42,000 capable and committed colleagues. Our full range of services and support makes it easy for our customers to discover, choose, afford and enjoy the right technology for them, throughout their lives. The Group’s core operations are supported by an extensive distribution network, enabling delivery to stores and homes, a sourcing office in Hong Kong and a state-of-the-art repair facility in Newark, UK.

Our brands include Currys PCWorld and Carphone Warehouse in the UK & Ireland and iD Mobile in the UK; Elkjøp, Elgiganten and Gigantti in the Nordics; and Kotsovolos in Greece. Our Dixons Travel brand has a presence across several UK airports as well as in Dublin and Oslo, and our services are provided through Team Knowhow.

Certain statements made in this announcement are forward-looking. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward-looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Information contained on the Dixons Carphone plc website or the Twitter feed does not form part of this announcement and should not be relied on as such.

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