Dixons Carphone falls on first day of trading after £3.6bn merger
(City A.M. (UK) Via Acquire Media NewsEdge) SHARES in Dixons Carphone rose yesterday morning only to close down 1.8 per cent in their first formal day of trading since Carphone Warehouse and Dixons Retail merged to create a £3.6bn consumer electronics empire.
The FTSE 250 company aims to exploit the ever-growing presence of consumer electronics in people's lives and the so-called internet of things - where everyday appliances are connected to the internet.
With Carphone's expertise in smartphones and Dixons' appliances and customer service platform, KnowHow, it aims to offer everything from the products and the technical support to the services such as broadband and the subscription to Spotify or Sky.
This could eventually include offering customers heating, lighting and security systems - all connected to the internet and their mobile devices.
Chief executive Sebastian James said they had got of to a "flying start" yesterday by opening the first seven Carphone shops inside Currys and PC World stores - including Oxford Street - with a further 23 planned to open by Christmas.
"We're excited about rolling out the rest of the stores. In the medium term, we've got some interesting opportunities to talk to customers about new products and we're looking forward to helping them with after-care [of products]- as we move more into a connected world, we're well placed in the industry to help people with their kit and make sure it keeps working," James told City A.M. The new high street powerhouse is expected to generate £12bn in annual turnover from 2,900 stores spanning 14 countries and employing 40,000 people.
It has targeted annual cost savings and synergies of £80m through the merger, which analysts expect to come from a range of measures including improved buying terms with suppliers such as Apple and from putting more Carphone shops within Currys and PC Worlds.
While many analysts were sceptical of the rationale behind the merger at first, Investec initiated coverage yesterday with an upbeat note and a "buy" recommendation.
Investec's Alistair Davies said that Carphone Dixons was "well equip-ped" to tap into the increasing presence of technology in people's lives.
Carphone Dixons shares closed down 6.20p at 337p last night.
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