Dixphone's half-year P&L accounts are in. So much RED INK
Restructuring charges wipe out 'barnstorming' UK sales at Frankencorp
Fewer arch enemies and a brighter economy should help Frankencorp - the merged Dixons and Carphone Warehouse organisation - oil the wheels of commerce. It's done that with gusto in the six months since the union was sealed.
The business Wednesday reported a five per cent year-on-year sales spike to £5.02bn for the first 31 weeks of fiscal '15 ended 21 November, with only southern Europe bucking the upward trend across the group.
The same could not be said of the bottom line however, with exceptional costs weighing heavy on the numbers. An £80m profit before tax, versus £22m a year ago, was reduced to a £20m loss, albeit better than the £27m loss in the same period of fiscal '14.
The expenses included merger costs of £11m, asset write-downs of £58m, restructuring and other costs of £9m, pension interest of £4m, and amortisation of intangibles of £18m.
The restructuring charge was related to shuttering some stores in Germany and Holland, head office restructuring, and the closure of the wholesale biz in Germany.
Dixons Carphone said UK revenues bounced six per cent to £2.95bn on the back of decent sales of white goods and high-end TVs. In computing, laptops sales “stabilised”, but tabs were down year-on-year due to “limited product innovation”, the firm revealed.
The mobile unit “performed well” and surprise surprise, market share grew “particularly toward the end of the period as the business benefited from the closure of Phones 4U”.
The firm previously saw rising sales on the back of Comet’s demise.
“Whilst the Phones 4U closure created new market opportunities it also presented a short-term requirement for increased investment, including an accelerated Store Within A Store (SWAS) roll-out and the recruitment and integration of many former Phones 4U employees,” Frankencorp said.
The group took on 12 former Phones 4U outlets and further 158 Phones 4U SWAS.
Sebastian James, Dixons Carphone group CEO - a former Old Etonian and member of the Bullingdon Club (pictured here with Boris and David Cameron - described the UK performance as “barnstorming”.
He claimed “this was driven by continued improvement in price and service, competitive charges, technology launches, and some recovery in the economy”.
Sales in northern Europe jumped five per cent to £1.63bn, but fell nine per cent in southern Europe to £357m. Connected World Services, the business services division, grew to £79m from £41m.
"Conditions are tough in Germany and the Netherlands and we have taken decisions to accelerate a review and restructuring of these businesses," the company stated. ®