Carphone Warehouse 2016 Annual Report Download - page 7

Group Chief Executive’s Statement
5
As we reach the end of our first full
year as a merged company, I am very
pleased to be reporting such a strong
performance. It has been a very good
year for the Group, with many great
achievements against a backdrop, not
only of industry change, but also the
execution of our merger. This year saw
us sailing in potentially squally waters
but we have, thankfully, successfully
navigated them.
Dixons Carphone has had a strong year financially; Group
like-for-like revenues were up 5% over the year, with growth
in almost every business in the Group leading to a 17%
increase in Group Headline pro forma PBT from £381 million
to £447 million, towards the higher end of the guidance we
gave, resulting in an increase in Headline pro forma basic
EPS from 25.5p to 29.3p.
Operationally, we have also made excellent progress, with
improvements in customer propositions in all markets as well
as a number of systems and infrastructure investments to
improve efficiency. Our customers have continued to respond
very well to our continued improvements in service, and we
end the year with our customer satisfaction and Net Promoter
Scores at all-time highs. I am very pleased to see that we have
also increased our colleague engagement scores across the
Group – not a trivial achievement when so much change is
happening across the business.
Our business in the UK & Ireland enjoyed an excellent year,
with like-for-like revenues up 6% over the year and Headline
pro forma EBIT grew by 20% to £365 million. This sales growth
was driven in large part by market share gains in our mobile
phone business in the UK coupled with solid growth
in electricals. This has been underpinned by solid cost control
across the business.
Our integration has now been largely, and successfully,
completed with regard to people and physical infrastructure,
and we now are a single, fully integrated business with one
head office, one repair centre and one warehouse, and an
organisational structure that suits the size and scale of the
business across the UK & Ireland. We have plenty of work to
do on our systems integration, but we are taking this nice and
steady with significant changes to our merchandise planning
systems and customer databases planned for this year as
part of a programme that we expect to take – all in – four
or five years.
We continue to be very focused on price competitiveness and
have further improved this so that we are now at parity or
better versus our most aggressive pure-play competitors on
pretty much all of our products, all of the time. We released
a free app ‘Compare Prices’ that allows customers to check
this for themselves, and we encourage our colleagues in store
to reassure customers about market prices as part of the
sales journey. As a result we believe that we are successfully
addressing the phenomenon of ‘showrooming’ where
customers seek our support and advice before buying, more
cheaply, elsewhere.
In January, we announced a plan to complete our estate of
3-in-1 stores in the UK – which house a fully-fledged Carphone
Warehouse proposition – within all of our CurrysPCWorld
stores. We are also taking the opportunity to roll out the best
new ideas that we have been developing in our newer stores.
Our colleagues really like working in these refurbished stores,
and our customers seem to very much enjoy shopping in them.
We currently have 233 3-in-1 stores and we are rolling out the
remainder at an average rate of three per week so that we can
be finished by the time we focus on Christmas. This will mean
that customers from Inverness to Penzance will have the same
experience of our shops and all of our stores will be up to date,
lively and in good condition.
iD mobile operations in the UK & Ireland were launched in
May 2015. This was enabled by an innovative IT platform and
with a particular focus on personalising plans with flexible
tariffs and introducing shared data. iD has been very positively
received and I am delighted that active customer numbers
have now passed 335,000. iD allows us to find solutions for
customers for whom the traditional networks are not quite right
and is another invaluable arrow in our quiver when talking to
people about their mobile needs.
Multi-play is a real area of focus for us this year and, following
a successful trial earlier in the year, we launched our offer to
help our customers with all of their connectivity needs, initially
focusing on broadband. This offer is enhanced by our
acquisition of Simplifydigital, the UK’s largest broadband, TV
and home phone switching business. We are now really the
only place where a customer can compare, discuss, choose
and switch – from a wide choice of national providers – the
broadband and TV package that is perfect for them, bringing
the expertise we have in mobile connectivity to this wider
canvas. It is early days, but the response from customers
has been very encouraging so far.
Strategic Report
Dixons Carphone plc Annual Report and Accounts 2015/16
00_DC 2016 Annual Report.pdf 5 11/07/2016 18:34