CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Where next for Dixons Carphone shares ahead of its results

Article By: ,  Former Market Analyst
June 28, 2021 7:39 AM

Dixons Carphone Earnings Preview | Dixons Carphone Share Price | Dixons Carphone Shares

Dixons Carphone annual results: When will they be released?  

Dixons Carphone will release full-year results on the morning of Wednesday June 30. This will cover the 12 months to the end of April.

What to expect from the Dixons Carphone results

Dixons Carphone has already revealed that like-for-like sales of electricals jumped 14% in the 51 weeks to April 24. The company has been able to capitalise on the increased demand for tech at home during the pandemic thanks to its strong online offering, with digital sales having grown by triple-digit figures, which helped cushion the sales lost from its stores having to be closed during lockdown and a severe drop in revenue and earnings from its mobile division.

The company said adjusted pretax profit should come in around £151.0 million, down from £166 million the year before. Importantly, that is after the £73.0 million of furlough money received from the UK government is repaid.

Analysts are expecting adjusted pretax profit to fall to £145.6 million. However, they are also expecting the company to report a reported pretax profit at the bottom-line of around £109.1 million compared to the £140.0 million loss booked the year before.

The company reacted swiftly to the radical overnight change that lockdowns introduced. It managed to capitalise on the shift online, with online sales of electricals more than doubling to over £4.5 billion – over 40% of its anticipated revenue this year. It closed its Carphone Warehouse stores and shifted its mobile operations into its Curry PC World stores and shut its Dixons Travel shops that became unsustainable as international travel ground to a halt. Still, it signalled its commitment to an omni-channel offering by creating ShopLive, an online video shopping service that helps staff provide face-to-face advice and assistance for customers looking to buy online or in-store.

Investors will want to see how this is progressing. Notably, Carphone Warehouse has said it will bring all its lines under one brand by changing its name to Currys PLC by this October.

Dixons Carphone has proven resilient during the pandemic, but the company admitted at its interim results that it was ‘still nowhere near our full potential’. This places the spotlight on its outlook and how quickly it can return to -pre-pandemic levels of growth now that stores are back open and things are starting to normalise. One threat to this could be a potential drop-off in consumer spending on tech after splashing out on devices over the last year.

Investors will also be closely watching for news on the dividend after payouts were suspended to preserve cash when the pandemic erupted. Dixons Carphone decided against reinstating dividends at its interim results when it ended October with £269 million in net cash. The fact it is expecting to end April with around £150 million in net cash suggests shareholders may have to wait for payouts to be reinstated, especially whilst the restructuring is ongoing. It is expecting to book around £130 million in exceptional costs over the year to account for closing down stores.

Where next for the Dixons Carphone share price?

The share price had been trending higher since early August, hitting resistance at 160p in late April. Since then the share price has formed a series of lower highs and lower lows falling below the trendline resistance for the first time and hitting a low of 120p last week the 200 day ma. 

Any move lower would need to break below the 200 sma at 120p in order for the sellers to target 105p a level which has offered both support and resistance at several points across the past six months. 

Meanwhile, the MACD shows a receding bearish bias which is keeping the buyers hopeful. Any recovery would need to move back over the multi-month ascending trendline at 130p and the 50 sma at 135p to negate the near-term downtrend. A break above here could bring 145p back into target. 

How to trade Dixons Carphone shares  

You can trade Dixons Carphone shares with City Index by following these four easy steps:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for ‘Dixons Carphone’ in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade 


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024