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Dixons Carphone sees profits surge but warns of uncertain times ahead

Electrical to mobile giant Dixons Carphone said it was preparing for uncertain times ahead even as it posted a 33% rise in half-year profits and reported robust sales.

Chief executive Seb James said the Brexit vote had so far had little impact on consumer demand but the slump in the pound meant it would have to take action to keep prices down next year.

Mr James also said the company was looking to cut costs and to grab customers from rivals if they struggle as the "world becomes a tougher place".

Shares, which have already fallen significantly since June's EU referendum, fell 4%.

Pre-tax profits at the group - which includes Currys, PC World and Carphone Warehouse in the UK as well as a number of European brands - rose 33% to £104m for the six months to 29 October.

Like-for-like sales in the UK and Ireland were up 5%, helped by a strong performance in mobile phones and white goods, though there was a fall in revenues from computing.

Wider group turnover rose 11% to £4.9bn - helped by currency changes which mean sales in euros translate to higher value in sterling.

But the plunge in the pound poses a wider challenge for UK retailers as it pushes up the price of imported goods, meaning they must face a hit to profit margins if they want to keep prices competitive.

Dixons Carphone buys 90% of its products in sterling. Manufacturers are expected to start increasing prices as the fall in the pound sends their costs soaring.

Mr James said: "While we have not seen any effect on consumer demand as a consequence of Brexit, we have been planning for the possibility of more uncertain times ahead.

"In particular, we have been focusing on reducing our fixed cost base, identifying areas of potential market share growth if the world becomes a tougher place for our competitors, and generally preparing for all eventualities - just in case.

"We are also planning our offer so that potential currency impacts are minimised for the customer, and are ensuring that next year, as always, everybody can be absolutely sure that they won't get a better deal anywhere."

The results come after the group enjoyed a record trading day on Black Friday last month, with shoppers snapping up gadgets such as smart fitness devices, drones and dashcams.

The discount retail day took place after the half-year period covered in the latest results announcement.

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