Dixons Carphone to report results

INVESTORS will already have a good idea of what to expect at the top of Dixons Carphone’s balance sheet on Wednesday as the business reports its results for the 12 months to the start of May.

Despite early predictions before lockdown that the company would endure a “significant reduction” in sales, the figures showed otherwise.

The last time Dixons updated shareholders on its finances, it said sales had only dropped by 3% in the five weeks to April 25.

It means investors already more or less know what revenue to expect in next week’s results, which only take into account an extra week so eyes will be elsewhere.

“Next week our focus will be on the outlook statement,” Sophie Lund-Yates, an analyst at Hargreaves Lansdown, said.

She worries the 166% growth the company had online in the UK and Ireland in the weeks following lockdown might have slowed down since.

Demand for laptops and other equipment staff needed to work from home surged as offices emptied out.

People also turned to hair clippers as barbers closed across the country.

“We’re concerned the initial website frenzy as people stocked up on extra freezers and homeworking equipment may have simply taken future sales,” Ms Lund-Yates said.

“We’re interested to know how trading’s looked in the first few weeks of the new financial year and when - or indeed if - Dixons thinks trading will return to normal.”

Analysts are expecting pre-tax profit to hit £151m over the financial year, less than half last year’s £339m.

They also forecast a 3.4% drop in revenue to just over £10bn, according to an average compiled by the company.

Ms Lund-Yates said low profits and cash flow could end up delaying the return of the company’s dividend, which was suspended when Covid-19 hit.

It will mark the end of a turbulent financial year for the business, which was fined £500,000 in January for a massive data breach that compromised the details of 14 million customers.

Just two months later - and just before lockdown - the company announced it would close all of its standalone Carphone Warehouse stores in the UK. The move cost 2,900 people their jobs at 531 sites across the country.

Some 1,800 members of staff were moved to other shops but were rapidly sent home as the business put more than 16,500 employees on furlough when the pandemic and lockdown hit.