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News Dixons Carphone sees profits halve


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Dixons Carphone has warned that it expects a “weakening” in consumer spending later this year as it posted a surge in online sales during lockdown, but a fall in annual profits. The retailer, which owns the Currys PC World and Carphone Warehouse brands, reported that profits in the 53 weeks to 2 May 2020 fell to £166 million from £339 million in 2018/2019, as the impact of store closures during COVID-19 and troubles in its mobile division hit earnings. Overall UK and Ireland sales rose by one per cent to £4.54 billion, but group sales were down three per cent at £10.17 billion, mainly due to shop closures across Europe – from 24 March in the UK. In addition, the company saw 26 per cent online sales growth in the UK and Ireland across the year,


but with an impressive 166 per cent upsurge in the first few weeks of lockdown as shoppers sought out big-screen TVs, gaming equipment and smart tech as they prepared to spend more time at home. Sales of SDAs also helped drive performance, according to the retailer’s latest financial statement.


Alex Baldock, Dixons Carphone Group Chief Executive (right), commented that after a positive first 10 months of the year, the company’s priorities changed abruptly when COVID-19 hit. “We’ve learned a lot during this crisis,” he said. “I’m struck by the vital role that technology has played in helping millions of families through this crisis, and I’m proud of how our business has stepped up to provide that help. Where our stores


have reopened we’ve performed well, while continuing to see strong online sales growth.” Mr Baldock continued: “That said, we expect a weakening of consumer spending later this year and are being cautious in our planning.”


AO becomes “proud lifeline” for customers during lockdown MDA growth in the UK was 9.1 per cent year on


year, but that increased to 19.9 per cent in the final quarter of AO’s financial year. Addressing the implications of the COVID-19 pandemic, the online appliance retailer said the crisis had converted many customers to online shopping but warned that shrinking economies, fewer housing transactions and a hard Brexit could hit sales. Chief Executive and Founder of AO, John Roberts,


AO World said its operating loss for the year to the end of March 2020 narrowed to £3.8m from £13m as total revenue rose 15.9 per cent to £1.05bn. Total UK revenue was up 20.3 per cent to £901.6m (excluding revenues from the Mobile Phones Direct business).


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commented: “I’m pleased that we have made substantial progress, closing the year in good shape after getting AO fit and focused on the future,” he said. “That progress ensured that we were in the best possible shape when COVID-19 hit. Investing to make sure our operations were safe so that our


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customers and people were protected allowed AO to be a proud lifeline for customers during lockdown. “Many experienced AO for the first time,” Mr Roberts added, saying that COVID-19 had accelerated a shift in customer behaviour towards online shopping and that the company needed to “cement that change”. In addition, with the closure of physical stores, the


retailer said: “The products we sell are an essential part of people’s lives and the electricals market migrated to nearly 100 per cent online overnight.” As a result, it reported that it made “significant market share gains” across many of its key categories from the start of lockdown in the UK, with sales “above expectations”.


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