Dixons Carphone share price: 4 things we learnt from its annual results

Over the last 12 months, the consumer electronics retailer delivered a strong set of figures as it continues its transformational journey.

Dixons Carphone Source: Bloomberg

Dixons Carphone hit its targets in 2018, delivering around £300 million of headline profit, driven by strong sales growth that helped it grab more market share in the UK and Ireland, as well as internationally.

The consumer electronics retailer owes its success to its new growth strategy that was launched back in December last year with the aim to transform the business.

UK and Ireland electricals see strong sales growth

Dixons Carphone was able to gain significant market share in electricals across all territories, helping the company record a 1% increase in like-for-like sales in the UK and Ireland, along with a 4% increase in international like-for-like revenues.

‘In UK & Ireland electricals, we expect growing sales and headline profits this year and beyond,’ Dixons Carphone CEO Alex Baldock said.

Dixons Carphone focused on credit and online services to drive growth

The company has also made significant progress in its credit and online businesses, with both representing major growth opportunities capable of driving profits in the years ahead.

For this reason, Dixons Carphone has invested in improving customers experiences in both the arenas in the hope of making its customer relationships stickier and more valuable.

‘The same focus on credit, online and services will ensure our strong international business continues its trajectory of growing sales and market share, while further improving profitability,’ Baldock added.

UK mobile market remains challenging

The UK mobile market continues to remain a challenge for Dixons Carphone, with the business expecting another painful year ahead that will see it make a significant loss.

However, the retailer has committed to accelerate its integration of mobile and electricals into one business and as the benefits of this consolidatory process emerge, Dixons Carphone believes that mobile will be able to breakeven within two years.

Five-year transformation plan delivers results early

Overall, with investment in the company’s transformation underpinning UK and Ireland electricals and international growth in sales and headline profits, and accelerating the changes in mobile, the business remains confident it can bring forward its long-term ambitions.

Dixons Carphone has committed to delivering £1 billion of group free cash flow over the five year plan, but also to accelerate its £200 million cost reduction promise by two years and secure at least 3.5% group EBIT margins by a year.

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