MPS ask Dixons Car­phone for pen­sion fund re­as­sur­ance

The Sunday Telegraph - Money & Business - - Business - By Ben Woods

EM­BAT­TLED re­tailer Dixons Car­phone is fac­ing po­lit­i­cal pres­sure to ex­plain the state of its pen­sion scheme af­ter a shock profit warn­ing caused its share price to crash.

The work and pen­sions se­lect com­mit­tee is writ­ing to the chain to seek as­sur­ances that its pen­sion fund will be well-funded de­spite re­cent fi­nan­cial woes.

Dixons Car­phone’s shares dropped by as much as 20pc last week af­ter re­veal­ing that pre-tax prof­its for in 2017 will come in at the top end of an­a­lyst ex­pec­ta­tions at £382m, but would drop to around £300m this year.

The UK deficit of the com­pany’s de­fined ben­e­fit pen­sion scheme ex­panded by £117m to £589m at the last count, ac­cord­ing to its an­nual re­port. The deficit has since shrunk to £492m.

Frank Field, the com­mit­tee chair­man, said the group of MPS would be sharp­en­ing its fo­cus on merg­ers which are now show­ing signs of strain.

He said: “We will be writ­ing to the pen­sions trust at Dixons Car­phone and will be ask­ing them what they have been do­ing to tackle the deficit.

“Merg­ers don’t al­ways re­sult in the gains they hope for when two com­pa­nies come to­gether, and that is why I am con­cerned for the pen­sions side of this busi­ness.”

Dixons and Car­phone Ware­house came to­gether in a £3.8bn tie-up in 2014. The new boss of Dixons Car­phone has pinned the blame for the re­tailer’s trou­bles on Se­bas­tian James, his pre­de­ces­sor, claim­ing it had been too “in­wardly fo­cused” and there was no clear di­rec­tion for the busi­ness.

Alex Bal­dock, who took over as chief ex­ec­u­tive in April, said the com­pany was not mak­ing the most of its strengths, as he laid bare plans to close 92 stores.

Shares in Dixons Car­phone peaked at 500p in 2015 but have since lost more than half their value. A spokesman said: “Dixons Car­phone can re­as­sure the com­mit­tee that our pen­sion scheme is well funded with an­nual con­tri­bu­tions of £46m.”

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