Dixons Carphone : Interim Results 2014-15

Interim results for the 31 weeks ended 1 November 2014

A strong half year for our new company with pro forma Headline profit before tax up 30%

Highlights

• Group H1 like-for-like revenue up 5%; Q2 like-for-like up 9%, with stable gross margins in H1
  • Market share gains across electrical and mobile businesses in the UK & Ireland, Nordics and Greece
  • Netherlands and Germany remain challenging but action underway to review and restructure
• Group pro forma Headline PBT of £78m (2013: £60m), up 30%
  • Group pro forma Headline EBIT of £100m (2013: £85m)
  • Headline basic EPS from continuing operations 7.1p (2013: 3.2p)
• Statutory loss before tax from continuing operations £20m (2013: loss of £27m) after non-Headline charges of £100m, statutory basic EPS from continuing operations loss of 4.7p (2013: loss of 5.4p)
• Interim dividend of 2.5p, payable in January 2015
• Integration progressing well and now expected to deliver a minimum £80m of synergies by 2016-17, one year ahead of plan
• Disposal of Virgin Mobile France completed on 4 December 2014 with net cash proceeds of £104m

Pro forma and Headline results are defined in the performance review on page 3 (Basis of preparation) and a reconciliation of Headline results to statutory results is provided in note 2 to the condensed financial statements.

Like-for-like revenue is defined in the performance review on page 3.

H1 13/14 contains 26 weeks of the Carphone Warehouse business compared with 31 weeks in H1 14/15.

Q2 results reflect the 13 weeks ended 1 November 2014 for Carphone Warehouse and the 3 months ended 31 October 2014 for Dixons Retail.

Sebastian James, Group Chief Executive, said:

"It is clearly a symbolic moment in the history of our great new shared enterprise to be reporting our first half year results. And they are, I am pleased to say, encouraging. Overall sales in the period have grown by 5% on a like-for-like basis and profit before tax has grown by 30%. Best of all, customer satisfaction continues to show good year-on-year progress across the business.

We have seen a barnstorming performance from our UK & Ireland division with like-for-like sales growth of 6% in the first half and 11% in Q2. This has been driven by continued improvements in price and service, competitive changes, technology launches and some recovery in the economy. We have also seen a good performance from our Nordic business where the competitive environment seems - possibly temporarily - to have calmed just a shade. Our Greek business has also had a good half and seems to be benefiting from some market recovery. Life has been tougher for our smaller European phone businesses who are strategically less able to be robust in the face of market changes and we are in the midst of restructuring and reviewing these operations. We remain excited about the long-term potential of our Connected World Services business on which we report separately today. This business continues to show promise with third party deployment of honeyBee and a new contract recently signed with BT.

The integration of our business seems to be going better than I dared hope, and our integrated stores are trading very well which augurs well for the future. There is still much, much more to do, but I have been struck by the willingness of people at all levels and from all parts of the business to roll up their sleeves and get on with it. I also feel, every day, how lucky we are to have such a smart and committed team. I would like to use this opportunity to thank them for their hard work.

All in all, then, this has been a very good half year but there is a lot more of the year to go and a crucial Christmas to come, against a backdrop of big changes in how and when customers do their Christmas shopping. Black Friday was an extraordinary - and fun - day but we are all acutely aware that there is no room for complacency. Ahead of this all-important peak period we remain comfortable with market expectations for this year; at the same time we know that we will need to keep our foot on the gas if we are to achieve our ambitious longer-term goals."

Investor and analyst webcast

There will be a conference call for investors and analysts at 9:00 am today. The presentation slides will be available via webcast (listen only) on our corporate website, www.dixonscarphonegroup.com

Dial-in details: UK/International +44(0) 20 3427 1909; USA +1646 254 3360; Passcode 9606976

Next announcement

The Group will publish its next trading statement on 21 January 2015.

For further information:

Kate Ferry IR & Corporate Affairs Director +44 (0)7748 933 206

Kerry Becker Head of Investor Relations +44 (0)7748 910 861

Hannah Collyer Head of Media Relations +44 (0)1727 203 041

Nick Cosgrove, Helen Smith Brunswick Group +44 (0)207 404 5959

Information on Dixons Carphone plc is available at www.dixonscarphonegroup.com

Follow us on Twitter: @dixonscarphone and @DCSebJ

About Dixons Carphone:

Dixons Carphone plc is Europe's leading specialist electrical and telecommunications retailer and services company, employing over 40,000 people in 14 countries.

Focused on helping customers navigate the connected world, Dixons Carphone offers a comprehensive range of electrical and mobile products, connectivity and expert after-sales services from the Geek Squad and Knowhow.

Dixons Carphone's primary brands include Carphone Warehouse, Currys and PC World in the UK and Ireland, Elkjøp, El Giganten, Gigantti and Lefdal in the Nordic countries, Kotsovolos in Greece, Dixons Travel in a number of European airports and Phone House in Germany, the Netherlands, Portugal, Spain and Sweden. Our key service brands include Knowhow in the UK, Ireland and the Nordics, Geek Squad in the UK, Ireland and various other European markets.

Business-to-business services are provided through Connected World Services, PC World Business and Carphone Warehouse Business. Connected World Services aims to leverage the Group's existing expertise, operating processes and technology to provide a range of services to businesses.

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.