Dixons Carphone shrugs off high street gloom to post record profits

Electricals giant Dixons Carphone shrugged of fears the UK high street is slowing down as it posted record annual profits.

The group, which runs Currys, PC World and Carphone Warehouse, reported underlying pre-tax profits up 10% to £501m ($642m) for the year to 29 April.

It said like-for-like sales rose 4% in the UK and Ireland, buoyed by strong trading in tablet devices and computers as well as fridges.

Dixons Carphone has bucked the trend of a number British retailers weathering tougher trading conditions with UK retail sales falling by 4.4% in the month to the end of May, the sharpest fall in four and a half years, according to a June report by British Retail Consortium, as households are hit by rising inflation and stagnating wages.

Sofa chain DFS sparked fears over a slowdown earlier this month when it issued a surprise profit warning, blaming political and economic uncertainty.

But Dixons Carphone chief executive Seb James said "in short, it has been a good year" for the FTSE 250 group.

James said: "While the UK consumer environment seems to be holding up for us, there will undoubtedly continue to be changes in the way people buy all of the products that we sell from phones to washing machines. "

Hargreaves Lansdown equity analyst George Salmon added: "The business has some strengths, not least its unique position as the last electrical specialist standing on the UK high street, but the company faces the triple threat of Amazon's relentless expansion, sterling's weakness and a squeezed UK consumer."