Dixons Carphone says profits will hit top of targets after solid Q4

A trading update from Dixons Carphone revealed annual pre-tax profits are likely to reach top half of its guidance as the retailer gained market share in electricals and mobile in most of its key markets.

Like-for-like revenue in the fourth quarter rose 5%, meaning for the full year it rose 5%, helped by a 9% surge in the Nordic region that made up for a flat 16 weeks to 30 April in Greece.

The core UK business also delivered 4% LFL growth, well ahead of the consensus 1.8% estimate, with the Nordics also far in excess of forecast 3.8% LFL growth.

Southern Europe, the smallest geographical component for the group, was expected to be flat, against a tough comparative of +8% last year when the Greek government was subsidising a one-off campaign for free tablets to improve digital connectivity for disadvantaged households.

Group chief executive Seb James was upbeat, saying: "We have continued to see good like-for-like growth with a very strong performance in our mobile phone business in the UK. I am also pleased that growth has been seen in pretty much all of our businesses across the group."

"As a result we are confident in narrowing our profit range upwards, with PBT now expected to be between £445m and £450m for the year, an increase of approximately 17% over last year."

Adding his view to the recent commentary about UK consumers, he said the company felt they were "ready to spend" but "more canny, and so need to be tempted with great deals and exciting new products".

Net debt guidance was also ahead of expectations at below £300m.

Dixons will announce full year results on 29 June.

Independent analyst Nick Bubb said "the news is good", with the market having expected group LFL sales to be up just 2.0%.

However, he said some investors may be disappointed that full-year adjusted PBT will only be a tad more than the consensus of £446m.

Broker Canaccord said it was always going to be a big ask to perform strongly against such a tough LFL comparative as last year's +9%, meaning the result was therefore doubly better than expected.

"The group continues to make market share gains by focusing on delivering customer satisfaction and negating the perceived advantages of the reducing list of retail and pure play competitors. This is a winning long-term formula in our view," analysts wrote.

Shares in DC were up 0.7% at 451p by 0915 BST, having earlier spiked to a three-month high just above 459p.