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Summary
- DC. had shown a jump of more than 100% in online electrical sales to around £4.5 billion during FY21.
- The Company expects net cash of around £150 million at the end of FY21.
- The Company expects to report adjusted PBT of around £151 million during FY21.
Dixons Carphone PLC (LON: DC.) is the LSE listed consumer stock. DC.’s shares have generated a return of around 118.10% in the last 12 months. The Company is listed on the FTSE 250 index.
On 30 June 2021, the Company will announce FY21 results for the twelve months.
Company Overview
Dixons Carphone PLC (LON: DC.) is a UK-based electronics and telecommunication retailer, which provides a full range of services and support across the value chain, ranging from mobile virtual network operator services to consumer electricals and mobile phones. Moreover, the Company was formed by the merger of Dixons Retail and Carphone Warehouse Corp. The Company has three reportable business segments –
- UK & Ireland Electricals
- UK & Ireland Mobile
- International
(Source: Company presentation)
A brief about Electronics Industry
This industry encapsulates companies that manufacture, assemble and service electronic products. The key products of this industry are TV, smartphones, personal computers, laptops etc. According to the recent report from Grand View Research, the market size of the global active electronic components was USD 273.7 billion during 2020. Moreover, the industry is forecasted to grow at a CAGR of 9.2% from 2021 to 2028. The rapidly growing market for electronic gadgets such as smartphones and laptops would boost the industry.
Pre-Close Trading Update (as of 28 April 2021)
The Company had shown like-for-like revenue growth of around 14% for the electricals division for 51 weeks period ended on 24 April 2021. The Nordics region also witnessed strong growth despite extended closure and increased restrictions in the region. Furthermore, the online electrical sales had shown a jump of more than 100% to around £4.50 billion during FY21. DC had managed to reimburse entire government support of £73 million paid during the year. The Company expected to report full year adjusted PBT (“Profit before tax”) of approximately £151 million during FY21.
Regarding the balance sheet, the Company had total financing facilities of around £550 million expiring in April 2025. DC. expected net cash of around £150 million at the end of FY21. Meanwhile, the Company had decided to close its airport stores business as the scheme allowing VAT-free shopping was removed by the UK Government effective 01 January 2021.
Share Price Performance Analysis of Dixons Carphone PLC
(Source: EODHD/Others, Thomson Reuters)
- shares were trading at GBX 148.70 and were down by close to 5.47% as of 28 April 2021 at 01:02 PM GMT. DC.’s 52-week Low and High were GBX 64.85 and GBX 159.20, respectively. Dixons Carphone PLC had a market capitalization of around £1.83 billion.
Business Outlook
DC had shown resilient financial performance during FY21 as it had delivered robust revenue growth for electricals division during the period. The Company had anticipated ending FY22 in a net cash position. Moreover, the Company would be on track to reach its cumulative free cash flow target of more than £1 billion over the period from FY20 to FY24. Further, it had anticipated incurring a capital expenditure of approximately £190 million during FY22. Also, DC had expected an exceptional cash cost of around £130 million for FY22. Overall, the Company is well-equipped to accelerate its growth trajectory through a sound business model.
