Dixons falls after pulling the plug on airport shops
SHARES in Dixons Carphone slumped after the Government’s much- criticised decision to end duty-free shopping led it to close its travel arm.
The electricals retailer said the lost tax break, combined with the collapse in tourists using airports, meant the business and its 35 shops were no longer profitable.
It does not expect passenger numbers to ‘sufficiently compensate for the removal of air- side tax-free shopping’, which was introduced by the Government this year. The move hit around 400 staff in the division, which made a £20m profit before the pandemic.
All these employees have been offered jobs in other areas of the business. Dozens of big businesses have warned that the end to dutyfree would be disastrous for retailers and will send tourists who would usually come to the UK to other countries instead.
Dixons said it had paid back £73m in Covid support to the Government thanks to ‘strong’ sales.
Like-for-like sales grew 12pc in the six months to April 24, despite the third lockdown, with online sales more than doubling to £4.5bn for the full year. Shares slid 6.7pc, or 10.5p, to 146.8p.
But it was a different story for WH Smith, which said it would raise £325m via a bond sale to fund 100 new travel stores, including 60 in the US. Its airport and train station business has been one of the best performing divisions in recent years.
Alongside the bond news, WH Smith (up 0.4pc, or 8p, to 1883p) revealed it slumped to a £19m loss in the six months to February, compared to a profit of £80m the year before, as sales fell 44pc.
There was a results ‘onslaught’ on the London markets, as AJ Bell financial analyst Danni Hewson described it.
Hewson said: ‘ No sooner do investors begin to digest one set of figures, another pops up to blur the overall picture.’
The FTSE 100 rose 0.3pc, or 18.7 points, to 6963.67, while the FTSE 250 climbed 0.03pc, or 6.74 points, to 22,439.82.
Sales of condoms and cleaning products are booming, says consumer goods giant Reckitt Benckiser. It reported a ‘ double- digit’ increase in Durex sales in the first quarter of 2021, with strong demand in countries where lockdown restrictions are loosening.
But that did not offset a fall in its health division, where sales fell 16.4pc compared to a year ago, due to so many households stockpiling cold and flu medicines.
Disinfectants Dettol and Lysol were also popular as hygiene sales rose 21.1pc. First- quarter sales were 1.1pc lower than the previous year, at £3.5bn. Shares fell 3.9pc, or 258p, to 6328p.
Advertising behemoth WPP topped the FTSE 100 leaderboard, rising 4.3pc, or 40.6p, to 991.6p, after sales rose 3.1pc to £2.3bn in the first quarter – proof companies are starting to loosen the purse strings after a frugal year.
It has been boosted by new deals with brands including vodkamaker Absolut, Salesforce, JP Morgan and the US Navy.
Earnings rose at the London Stock Exchange group and it reckons it will be able to make £350m in savings by the end of this year following the takeover of data group Refinitiv.
Its shares closed 1pc higher, up 76p, to 7554p, but it suffered a bloody nose at its annual meeting. It will consult investors on chief executive pay after 23pc of votes were cast against a motion to raise boss David Schwimmer’s pay by 25pc, to £1m.
Elsewhere, builders merchant Travis Perkins tumbled 4.1pc, or 55.5p, to 1415p after it demerged its Wickes retail business, which listed under the ticker ‘Wix’ yesterday. Wickes ended up 5.6pc, or 13.9p, higher at 263.9p.