Dixons Carphone PLC (DC.) Full year results

[daveh]

Can be found here:

www.investegate.co.uk/article.aspx?id=2 ... 8658C&fe=1

Dividends
The Board declared an interim dividend of 2.25p per share which was paid on 25 January 2019.
We are proposing a final dividend of 4.50p per share. The final dividend is subject to shareholder approval at the Company's forthcoming Annual General Meeting. The ex-dividend date is 5 September 2019, with a record date of 6 September 2019 and an intended final dividend payment date of 27 September 2019

Headlines

FY19 financial results in line with our plan
• Gained market share in Electricals in all territories
• Group FY like-for-like revenue(3) up 1%; UK & Ireland electricals like-for-like revenue(3) up 1%; International like-for-like revenue(3) up 4%; UK & Ireland mobile like-for-like revenue(3) down 4%
• Statutory revenue down 1% to £10,433 million
• Group headline PBT(1) of £298 million (2017/18: £382 million):
• Statutory loss before tax of £259 million (2017/18: profit of £289 million), including non-headline charges of £557 million (2017/18: £93 million), primarily non-cash impairments relating to the changing UK mobile market, as outlined in December interim results, mainly goodwill(4)
• Free cash flow(5) of £153 million (2017/18: £172 million). Operating cash flow of £286 million (2017/18: £312 million)
• Net debt(6) of £265 million (2017/18: £249 million)
• Final dividend of 4.50p proposed (2017/18: 7.75p), full year dividend at 6.75p (2017/18: 11.25p)

FY20 Group financial guidance(7),(9),(10)
• Sales and profit to grow in Electricals in both UK & Ireland and International
• UK mobile: significantly loss making this year; improving materially in following two years by accelerating transformation
• Headline PBT expected to be around £210 million, with growth thereafter as transformation benefits feed through
• Capex of circa £275 million, in line with overall transformation capex guidance; peak year of transformation investment
• Exceptional cash costs expected of circa £80 million
• Net debt broadly flat year on year given strong cash flow from working capital improvements
• Full year dividend expected to be flat year on year reflecting confidence in both cash flow and future profit growth

The market doesn't like it, down 16% at the moment to 102 so yielding 6.5% on todays price.

The dividend cut was made at the interims stage ( I bought more just before the interims announcement when the price was well down). Not sure it was a bad decision if they can turn the company around as they suggest, though clearly I could pick up the shares now much more cheaply. Interestingly it looks like it is now the mobile part of the company that is doing badly and the electricals business (the old Dixons bit) that is doing OK which a bit of a switch around since the merger. With the extra shares even after the divi cut, for me its the highest divi in cash terms since the divi was cut in 2008, but still less than half I received in 2007.

[idpickering]

Yet more evidence that retail shares should be approached with caution, if approached at all? SP down 17% as I type.

Ian.

[Wizard]

...
The dividend cut was made at the interims stage ( I bought more just before the interims announcement when the price was well down). Not sure it was a bad decision if they can turn the company around as they suggest, though clearly I could pick up the shares now much more cheaply. Interestingly it looks like it is now the mobile part of the company that is doing badly and the electricals business (the old Dixons bit) that is doing OK which a bit of a switch around since the merger. With the extra shares even after the divi cut, for me its the highest divi in cash terms since the divi was cut in 2008, but still less than half I received in 2007.

With respect, if I read your post correctly, you are saying that since you bought it the share has fallen in value and the dividend has been cut. If my read is right, that does not sound like a good decision. Given most of my HYP purchases have fallen in value since purchase and a number have cut their dividend it is a conclusion I am used to reaching myself. But I do not own DC.

[daveh]

With respect, if I read your post correctly, you are saying that since you bought it the share has fallen in value and the dividend has been cut. If my read is right, that does not sound like a good decision. Given most of my HYP purchases have fallen in value since purchase and a number have cut their dividend it is a conclusion I am used to reaching myself. But I do not own DC.

No, I'm saying my timing was poor, but if (I know big if) they can turn the company round as they say then it may not turn out to be a bad purchase long term. Of course if I'd known that they were going to need to cut the dividend and that the mobile part of the business was performing so poorly then I wouldn't have purchased, but that wasn't made public until the interims in December 18 and I purchased before then, relying on the previous full year accounts which seemed pretty reasonable.