Dixons Carphone Interim Results 2017/18

RNS Number : 1551Z

Dixons Carphone PLC

13 December 2017

Dixons Carphone plc

Interim Results for the 26 weeks ended 28^th October 2017

• Strong performance in electricals across the Group with growing revenues, profitability and market share

• Maintaining scale in UK mobile but profitability challenging. Repositioning mobile business to deliver a simpler, less capital-intensive business

• Interim dividend 3.5p (2016/17: 3.5p), Board intends to maintain total full year dividend at 11.25p

• Expect to deliver full year 2017/18 Headline PBT within £360m - £400m range

o Headline PBT consensus for FY18: range £362m-£420m, average £383m

• Good start to peak trading with record Black Friday in all geographies

				Headline revenue ⁽¹⁾				Headline profit / (loss) ⁽¹⁾
		H1 17/18	H1 16/17		Reported rate	Local currency⁽²⁾	Like-for- like ⁽³⁾		H1 17/18	H1 16/17
	Notes	£m	£m		% change	% change	% change		£m	£m
UK & Ireland	(4), (5)	3,009	3,067		(2)%	(2)%	2%		34	130*
Nordics	(5)	1,666	1,476		13%	8%	8%		42	34
Greece	(5)	191	167		14%	9%	7%		6	3
honeybee	(4), (5)	2	8		(80)%	(80)%	n/a		(12)	(4)
Group		4,868	4,718		3%	1%	4%		70	163
Net finance costs									(9)	(9)
Profit before tax									61	154
Tax									(15)	(19)
Profit after tax									46	135

Headline basic EPS⁽¹⁾

4.0p

11.7p

Notes:

- In the UK&I H1 like-for-like revenues improved by approximately 3% as a result of sales successfully transferred from closed stores

- See notes on page 3 for an explanation of the basis of preparation and defined terms. This document also uses definitions set out on pages 37 to 41

* H1 16/17 UK & Ireland EBIT includes £17m (H1 17/18: £18m) relating to the remaining core of CWS, which has been restated as set out in note 2.

Financial Highlights:

• Group headline PBT⁽¹⁾ of £61 million (2016/17: £154 million)

o Includes a negative £58m impact year-on-year from a change in receivables revaluations and insurance contract terms as indicated in August

• Statutory profit before tax of £42 million (2016/17: £111 million), including non-headline charges of £19 million (2016/17: £43 million). Statutory basic EPS of 3.3p (2016/17: 8.1p)

• Group H1 like-for-like revenue⁽³⁾ up 4%; Q2 like-for-like up 3%; statutory revenue for H1 up 3%

• Group H1 electricals like-for-like up 7%, growth across all markets and market share gains

o UK&I electricals like-for-like up 6%

o Nordics like-for-like up 8%

o Greece like-for-like up 7%

• UK&I H1 mobile like-for-like down 3%

o Including the impact of delayed iPhone X launch into second half of financial year

• Free cash flow⁽⁶⁾ of £169 million (2016/17: £64 million) resulting from reduction in capex year-on-year, improved stock management, and favourable timing on working capital

• Net debt⁽⁷⁾ of £206 million (2016/17: £285 million)

Seb James, Group Chief Executive, said:

'Our interim results highlight the continuation of trends that we saw in our Q1 trading update. Overall we have delivered strong free cash flow, expect to deliver full year PBT within the £360m to £400m range and the Board intends to maintain the full year dividend.

I am encouraged by the continued achievements in our electricals businesses across the Group with like-for-like sales up 7% and growth in revenues, market share, customer satisfaction and profitability in these markets thanks to our commitment to retail innovation and to serving customers well. As we said in August, the UK postpay mobile phone market is tougher, with a combination of higher handset costs and relatively incremental technology growth continuing to cause customers to hold on to their handsets for longer and some to choose a SIMO contract in the meantime. In addition, the later launch of the iPhone X pushed some sales into the second half of our financial year. Throughout the period, we made a very conscious decision to fight hard to drive sales in our product offering, and this has impacted mobile profitability. Vitally, though, these actions have helped maintain scale, reinforce our position as market leader, and ensure our relevance to the customer.

We recognise that the performance of the mobile division needs addressing, and are taking action to adapt our model in order to cement our place in a changing world. We will update the market on these developments in due course, but we believe that we can, over time, reduce the complexity and capital intensity of our mobile business model, and increase the simplicity and profitability of what we do.

The start to peak trading has gone well with sales records being broken in all territories. Everywhere, we have seen material share gain and this shows that our retail businesses continue to be able to entice customers into buying the amazing new technologies that we offer. We must remember, though, that there is plenty of peak left to go.

At this time of year, our 42,000 colleagues go above and beyond the call of duty to support our customers, and I would like to take this opportunity to record my thanks to them for their hard work so far, and, in advance, for what we expect will be a busy Christmas period ahead.'

Quarterly summary

	H1 2017/18			Q2 2017/18			Q1 2017/18⁽⁴⁾
	Reported rate % change	Local currency⁽²⁾ % change	Like-for- like ⁽³⁾ % change	Reported rate % change	Local currency⁽²⁾ % change	Like-for- like ⁽³⁾ % change	Reported rate % change	Local currency⁽²⁾ % change	Like-for- like ⁽³⁾ % change
UK & Ireland	(2)%	(2)%	2%	(4)%	(4)%	1%	Flat	Flat	4%
Nordics	13%	8%	8%	9%	7%	8%	17%	8%	8%
Greece	14%	9%	7%	13%	10%	7%	16%	7%	6%
honeybee	(80)%	(80)%	n/a	(80)%	(80)%	n/a	(80)%	(80)%	n/a
Group	3%	1%	4%	1%	Flat	3%	6%	3%	6%

Notes:

- UK&I electricals like-for-like: Q1 7%, Q2 5% and H1 6%

- In the UK&I Q2 like-for-like revenues improved by approximately 2% as a result of sales successfully transferred from closed stores, in Q1 this was 4% and in H1 this was 3%.

- UK&I mobile like-for-like revenue: Q1 flat, Q2 (6)% and H1 (3)%

Investor and analyst presentation and webcast

There will be a management presentation for investors and analysts at the Deutsche Bank offices in London at 9:00 am (GMT) this morning. The presentation slides will be available via webcast (listen only) on our corporate website, www.dixonscarphone.com and there will be an accompanying conference call:

Dial-in details - UK/International: +44(0) 20 3059 8125; passcode: 156444

Seven-day replay - UK/International: +44(0) 121 260 4861; passcode: 2280344 #

Next announcement

The Group will publish a trading update on 23 January 2018 with an accompanying conference call.

For further information

Assad Malic	IR, PR & Corporate Affairs Director	+44 (0) 7414 191 044
Mark Reynolds	Head of Investor Relations	+44 (0) 7979 696 498
Nick Cosgrove, Helen Smith	Brunswick Group	+44 (0) 207 404 5959
Information on Dixons Carphone plc is available at www.dixonscarphone.com Follow us on Twitter: @dixonscarphone and @DCSebJ

About Dixons Carphone:

Dixons Carphone plc is Europe's leading specialist electrical and telecommunications retailer and services company, employing over 42,000 people in nine countries.

Focused on helping customers navigate the connected world, Dixons Carphone offers a comprehensive range of electrical and mobile products, connectivity and expert after-sales services from Team Knowhow.

Dixons Carphone's primary brands include Carphone Warehouse and Currys PC World in the UK & Ireland, Elkjøp, Elkjøp Phonehouse, Elgiganten, Elgiganten Phone House, Gigantti and Lefdal in the Nordic countries, Kotsovolos in Greece, and Dixons Travel in a number of UK airports as well as Dublin and Oslo. Our key service brand is Team Knowhow in the UK, Ireland and the Nordics.

Business-to-business (B2B) services are provided through Connected World Services, Currys PC World Business and Carphone Warehouse Business. Connected World Services aims to leverage the Group's existing expertise, operating processes and technology to provide a range of services to businesses.

Notes

(1) Headline results exclude amortisation of acquisition intangibles, Merger integration and transformation costs, businesses to be exited, property rationalisation costs, acquisition-related costs and other one-off, non-recurring items, net interest on defined benefit pension schemes and discontinued operations. Such excluded items are described as 'non-headline'. For further details see notes 3 and 10 to the financial information. Comparatives have been restated following the classification of the iD mobile operations in the Republic of Ireland as businesses to be exited and classification of the Sprint joint venture and Spanish operations as discontinued operations, and are therefore included in non-headline results. For further details see note 13 of the financial information.

(2) ‌Change in local currency revenue reflects total revenues on a constant currency and period basis.

(3) ‌Like-for-like revenue is defined in the glossary on page 37.

(4) During the period, the reportable segments of the Group have been changed and comparatives restated accordingly. The full year and half year restatements are detailed in note 2 to the financial information.

(5) UK & Ireland comprises operations in the UK and Ireland, the Dixons Travel business and the non-honeybee B2B operations which leverage the specialist skills, operating processes and technology of the Group to provide managed services to third parties looking to develop their own connected world solutions. Nordics comprises operations in Norway, Sweden, Finland, Denmark and Iceland. Greece comprises operations in Greece and, for non-headline results, previously disposed operations in the Southern Europe region. honeybee comprises our proprietary IT multi-industry software that simplifies the delivery and management of complex digital customer journeys. These segmental results have been restated as set out in note 2.

(6) Free cash flow is defined in the glossary on page 39.

(7) Net debt is defined in the glossary on page 39.

Certain statements made in this announcement are forward-looking. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward-looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Information contained on the Dixons Carphone plc website or the Twitter feed does not form part of this announcement and should not be relied on as such.

Performance review

The performance review below refers, unless otherwise stated, to headline information for continuing businesses. The basis for the preparation of this information, including restatements due to businesses to be exited, discontinued operations and segmental classification, is described on page 3.

Group

Group revenue has increased 1%, on a local currency basis, 4% on a like-for-like revenue basis and 3% on a reported currency basis to £4,868 million. This is primarily driven by strong performance in the Nordics region and Greece, reporting 8% and 7% like-for-like revenue growth respectively and UK electricals growth of 6% on a like-for-like basis with UK mobile like-for-like down 3%.

Headline EBIT has decreased to £70 million (2016/17: £163 million), driven by a negative impact of £58 million composed of the change in network receivables revaluation year-on-year and the prior period impact of the change in contractual terms for third party insurance products. Excluding these negative impacts, Group EBIT has decreased by £35 million. The electrical businesses have continued to perform well, growing market share and profitability year-on-year.

UK & Ireland

Revenue in the UK & Ireland decreased by 2% to £3,009 million (2016/17: £3,067 million), with like-for-like revenue for the half year up 2%. The electricals business has delivered 6% like-for-like-growth benefiting by approximately 4% as a net result of sales transferred from closed stores with the mobile business delivering like-for-like revenues down 3%.

The electricals business has delivered revenue and profit growth with tight cost control and market share gains across consumer electronics and white goods. The business has largely completed its property optimisation programme, which remains on track to deliver the £20 million of incremental EBIT contribution in the current year.

In Currys PC World, white goods performance has remained strong supported by launch of our next day delivery proposition. We have seen growth across all major categories and have launched our same day delivery offer. The Dixons Travel business continues to grow benefiting from the new format Heathrow Terminal 3 store and the launch of our first cruise ship store. Team Knowhow continued its roll-out launching same day mobile phone repairs whilst our flexible credit offering 'Your Plan' has seen strong customer take up.

The mobile phone market continued to be difficult in the first half of the year with revenues impacted as consumers hold on to their handsets for longer reducing the size of the overall postpay market and the phasing of the iPhone X product launch into the second half further slowed market growth. Mobile gross margins were down reflecting the impact of the network debtor revaluation and insurance elements highlighted below as well as lower trading margins to support postpay volumes.

The Carphone Warehouse is the largest independent retail destination in the UK for mobile phones. It has a brand consideration of 78%, a postpay market share in excess of 22%, the widest range of handset and network offerings and record customer NPS. The business launched its leasing proposition in stores during the first half and rolled out new SIMO journeys. Multiplay continued to grow strongly with market share increasing to 10% of the switching market and also launched energy switching. The changing market landscape will require us to use our expertise and scale to work even closer with our existing partners, broaden our range of product offerings whilst continuing to drive value for our customers. iD in the UK continues to benefit from its differentiated proposition with the number of active customers increasing to 715,000 from 600,000 at the end of the last financial year.

Headline EBIT decreased £96 million year on year reflecting the reduction in UK mobile as set out above and a net negative revaluation of our network debtor balance of £19 million (including the impact of EU roaming legislation changes) compared to a positive impact in the prior year of £17 million as a result of net changes in upgrade propensity, sleeper assumptions and out-of-bundle spend. The prior year headline EBIT also included £22 million benefit from changes in contractual terms for the sale of third party insurance contracts. Excluding these items, EBIT was down £38 million year-on-year.

Nordics

The first half has seen strong performance in the Nordics with 8% local currency revenue growth and 8% growth on a like-for-like basis. Reported revenue in the first half was up 13% to £1,666 million (2016/17: £1,476 million) the difference over and above local revenue growth as a result of the weakening in the Pound.

Like-for-like revenue increased by 8%, driven by strong performance across most categories, in particular consumer electronics and telecoms. The investment in our Jönköping distribution centre, doubling its overall product range, and the introduction of an automated replenishment system have led to improved availability, record customer satisfaction and strong market share growth in all markets.

Nordics headline EBIT was £42 million (2016/17: £34 million) with the increase in revenues in the first half and cost saving initiatives partially offset by a continued determination to offer competitive prices in the market.

Greece

Greece has continued to grow with like-for-like revenue increasing 7%, local currency revenue increasing 9% and reported currency revenue increasing 14% to £191 million (2016/17: £167 million), with market share increasing across all categories. Reported EBIT increase of £3 million reflects this strong sales growth and improved margin.

honeybee

As previously announced the Group has changed the way we are selling the honeybee software platform from an upfront sale to a software-as-a-service model. As a result, the current period has seen a decrease in revenue from £8 million to £2 million with an EBIT loss of £12m (2016/17: £4m). With a new framework in place, we are exploring a number of options for the future development of honeybee.

Finance costs

Headline net finance costs have remained in line with the prior year at £9 million. The non-headline costs of £8 million (2016/17: £8 million) relate to the interest on the UK defined benefit pension scheme.

Tax

The full year headline effective tax rate is expected to be 22%. The Group's headline effective rate of taxation applied to this period is 24%, due to the weighting of profits in the first half (2016/17: 23% before the recognition of tax credits). The rate is higher than the UK statutory rate of 19% due mainly to higher statutory rates in the Nordics and certain non-deductible items arising mainly in the UK.

Free cash flow

	H1 17/18 £m	H1 16/17 £m
Headline EBIT	70	163
Depreciation and amortisation	83	72
Working capital	171	15
Capital expenditure	(96)	(109)
Taxation	(30)	(17)
Interest	(12)	(15)
Other	2	-
Free cash flow before restructuring items	188	109
Restructuring costs	(19)	(45)
Free cash flow - continuing operations	169	64

Free cash flow before restructuring in the first half was an inflow of £188 million (2016/17: £109 million), with the Group benefiting from a working capital inflow of £171 million (2016/17: £15 million). The working capital inflow is largely as a result of better stock management, seasonality and the effect of non-cash revaluations. In addition there were timing benefits, in particular relating to the timing of product launches.

Capital expenditure in the first half was £96 million, a reduction of £13 million compared to the prior period as the capital element of the property rationalisation programme and Merger and integration capital expenditure is now largely complete.

Taxation paid has increased from £17 million to £30 million as the prior period included a cash receipt of £14 million following successful resolution of a historical tax issue.

Interest paid has reduced primarily due to fees paid in the prior year following renegotiation of the Group's revolving credit facility.

Restructuring costs primarily comprise the cash costs associated with the Merger and transformation activities, which were largely completed during the period, and property rationalisation costs.

A reconciliation of free cash flow to cash flow from operations is presented in note 9 to the financial information.

Funding

	H1 17/18 £m	H1 16/17 £m
Free cash flow	169	64
Dividends	(89)	(75)
Acquisitions and disposals including discontinued operations	32	(1)
Investment in joint venture	(3)	(16)
Net issue of new shares and purchase of own shares	3	-
Pension contributions	(46)	(18)
Other items	(1)	28
Movement in net debt	65	(18)
Opening net debt	(271)	(267)
Closing net debt	(206)	(285)

At 28 October 2017 the Group had net debt of £206 million (2016/17: £285 million). A reconciliation of net debt is presented in note 9 to the financial information. Free cash flow was an inflow of £169 million (2016/17: inflow of £64 million) for the reasons described on the previous page.

Of the free cash flow, £89 million was returned to shareholders in the form of dividends for the 2016/17 financial year.

Net inflows associated with acquisitions and disposals in the current period largely relates to consideration received on the disposal of the Group's Spanish operations (£22 million) and exit from the Group's joint venture with Sprint (£17 million).

Pension contributions during the period increased to £46 million (H1 2016/17: £18 million, FY 16/17: £43 million) reflecting the timing of these contributions and increased commitment following the 2016 triennial valuation.

Other items in both the current and prior periods relate to foreign exchange gains and losses on net debt.

2017/18 Guidance

· Full year headline PBT expected to be within £360m-£400m range. We anticipate that our electrical businesses will deliver earnings growth this year across the Group

· Full year headline interest of c.£18m

· The 2017/18 effective headline tax rate is expected to be around 22%

· Mobile debtor revaluation, including EU roaming, expected to be in line with negative £10m-£40m range provided

· Exceptional cash flow in 2017/18 c.£40m

· Pension contribution of £46m

· Capital expenditure is expected to be c.£200m

Statutory results

Income statement - continuing operations

	H1 17/18 £m	H1 16/17 £m
Revenue	4,871	4,720
EBIT	59	128
Net finance costs	(17)	(17)
Profit before tax	42	111
Tax	-	(11)
Profit after tax - continuing operations	42	100
Basic EPS - continuing operations	3.6	8.7
Diluted EPS - continuing operations	3.6	8.6

EBIT decreased from £128 million to £59 million predominantly reflecting the decreased headline EBIT as discussed above, which has been offset by the reduced non-headline costs described below of £11 million (2016/17: £35 million).

Net finance costs remain in line with the prior year at £17 million.

The full year headline effective tax rate is expected to be 22%.

The decrease in statutory basic EPS reflects the reduced profit after tax in the period, with no significant changes in the number of shares in issue.

Non-headline items

Statutory profit before tax of £42 million (H1 2016/17: £111 million) includes non-headline charges of £19 million (H1 2016/17: £43 million). These charges are analysed below:

	H1 17/18 £m	H1 16/17 £m
Businesses to be exited	(3)	(4)
Merger and transformation related costs	(2)	(15)
Amortisation of acquisition intangibles	(16)	(16)
Unieuro income	10	-
Total non-headline items before interest and tax	(11)	(35)
Net pension interest	(8)	(8)
Total non-headline items before tax	(19)	(43)
Tax	15	8
(Loss) after tax - discontinued operations	(4)	(7)
Total non-headline items	(8)	(42)

Businesses to be exited represent the trading losses of the iD mobile operations in the Republic of Ireland for which a decision to exit the business was announced in the prior year.

Merger and transformation costs in the first half of 2017/18 relate to integration costs of £nil (2016/17: £9 million) and functional transformation costs of £2 million (2016/17: £6 million). Functional transformation costs relate to projects across the finance, procurement and human resources functions to rationalise shared service centre activities and harmonise policies and procedures across key support functions of the business.

Following the successful IPO of Unieuro on the Milan stock exchange in the second half of FY16/17, in H1 17/18 the Group disposed of shares in the operation reducing the ownership from 10.2% to 7.2%. A profit of £10 million has been recognised, relating to dividends received during the period and the disposal of a portion of the investment.

Net pension interest was £8 million (2016/17: £8 million) reflecting the charge incurred in relation to the Dixons Retail UK pension scheme. Further details on the pension scheme can be found in the Pensions section later in this performance review.

The tax on non-headline items of £15 million credit includes an £11 million credit due to recognition of previously unrecognised deferred tax assets in Greece.

For further details of non-headline items see note 3 to the interim financial information.

Discontinued operations

On 29 September 2017, the Group completed the disposal of Phone House Spain S.L.U, Connected World Services Europe Srl and Smarthouse Spain S.A, which together represented the trading operations in Spain. A gain of £1 million arose on the disposal, being the difference between the proceeds of disposal and the carrying amount of the subsidiaries' net assets and attributable goodwill. The trading results of the operations have been classified as discontinued (£Nil, 2016/17: £1 million profit).

On 7 June 2017 an agreement was reached to dispose of the Group's 50% interest in the Sprint Connect LLC joint venture to Sprint Corporation. £nil gain or loss was recognised in relation to the disposal. The share of results of the operation to the date of disposal have been classified as discontinued (£3 million loss, 2016/17: £8 million loss) together with additional costs of £3 million incurred by the Group post closure.

Balance sheet

	28 October 2017 £m	29 April 2017 £m
Goodwill	3,125	3,111
Other fixed assets	965	973
Working capital	(336)	(203)
Net debt	(206)	(271)
Tax, pension & other	(439)	(555)
	3,109	3,055

Goodwill has increased by £14 million to £3,125 million largely as a result of foreign exchange movements on Nordics' goodwill offset by the goodwill disposed with the Group's Spanish business.

The net working capital liability has increased by £133 million to £336 million, driven by increases in trade payables due to the timing of payments to suppliers offset by an increase in the carrying value of ongoing network commission receivables, seasonal increase in stock balances in readiness for peak trading, and a reduction in provisions due to payments made in the period. Overall net debt has decreased by £65 million as described in the cash flow section above.

Tax, pension and other liabilities have decreased by £116 million driven by the decrease in the UK defined benefit pension scheme of £97 million and a reduction in income tax payable of £24 million.

Cash flow statement

	H1 17/18 £m	H1 16/17 £m
EBIT - continuing operations	59	128
EBIT - discontinued operations	(4)	(7)
Depreciation and amortisation	102	92
Working capital	130	(21)
Other operating cash flows	(64)	(19)
Cash flows from operating activities	223	173

Acquisitions	(3)	(18)
Capital expenditure	(98)	(112)
Investment in joint venture	(3)	(16)
Other investing cash flows	48	16
Cash flows from investing activities	(56)	(130)

Dividends paid	(89)	(75)
Other financing cash flows	7	(29)
Cash flows from financing activities	(82)	(104)

Increase / (decrease) in cash and cash equivalents	85	(61)

The statutory EBIT for the Group has decreased for the reasons discussed in the performance section above. The statutory EBIT includes the charges of £11 million relating to the 'non-headline' items. Depreciation and amortisation charges remained relatively consistent in the period. Working capital movements are largely as a result of timing variances.

Other operating cash outflows in the year have increased by £45 million due to the increase in timing and value of pension contributions and increase in net taxation payments in the period.

Acquisition outflows in the current period of £3 million relate to deferred consideration payments in the Nordics for the 'Epoq' kitchen business. The prior period outflows include £10 million for the acquisition of Simplifydigital and £6 million for the acquisition of ten FONA stores in Denmark. Investment in joint venture of £3 million relates to further contributions into the Sprint joint venture prior to disposal (2016/17: £16 million).

Other investing cash flows relate to proceeds received following the disposal of the Group's Spanish operations and the disposal of the Sprint joint venture in the period and additional consideration received in relation to prior period disposals.

Other financing cash flows of £7 million primarily relate to the repayment and drawdown of cash under the revolving credit facilities.

Comprehensive income / changes in equity

Total equity for the Group has increased from £3,055 million to £3,109 million driven by the statutory profit of £38 million in the period, the gain on retranslation of overseas operations of £47 million and the decrease in the IAS19 defined benefit pensions deficit for the UK pension scheme. This latter result reflects the change in discount and inflation rates in the period, giving an actuarial gain of £59 million, offset by payment of £89 million dividends.

Pensions

The IAS 19 accounting deficit of the defined benefit section of the UK pension scheme amounted to £492 million at 28 October 2017 (29 October 2016: £646 million, 29 April 2017: £589 million). Contributions during the period under the terms of the deficit reduction plan amounted to £46 million (H1 16/17: £18 million, FY 16/17: £43 million) reflecting the timing of contributions and increased commitment following the 2016 triennial valuation.

The deficit has decreased during the first half largely as a result of changes in discount and inflation rate assumptions.

Dividends

The Board has declared an interim dividend of 3.5p per share, maintaining the approved 3.5p per share dividend last year. The ex-dividend date is 28 December 2017, with a record date of 29 December 2017 and an intended payment date of 26 January 2018. The Board intends to maintain the final dividend at the prior year level of 7.75p, maintaining full year expected dividends of 11.25p.

Consolidated income statement

		26 weeks ended 28 October 2017 Unaudited			26 weeks ended 29 October 2016 (Restated)* Unaudited
	Note	Headline* £m	Non-headline* £m	Total £m	Headline* £m	Non-headline* £m	Total £m
Continuing operations
Revenue	2	4,868	3	4,871	4,718	2	4,720

Profit / (loss) before interest and tax	2,3	70	(11)	59	163	(35)	128

Finance income		7	-	7	7	-	7
Finance costs		(16)	(8)	(24)	(16)	(8)	(24)
Net finance costs		(9)	(8)	(17)	(9)	(8)	(17)

Profit / (loss) before tax		61	(19)	42	154	(43)	111

Income tax (expense) / credit	4	(15)	15	-	(19)	8	(11)
Profit / (loss) after tax - continuing operations		46	(4)	42	135	(35)	100

Loss after tax - discontinued operations	10	-	(4)	(4)	-	(7)	(7)

Profit / (loss) after tax for the period		46	(8)	38	135	(42)	93

Earnings per share (pence)	5
Basic - continuing operations		4.0		3.6	11.7		8.7
Diluted - continuing operations		4.0		3.6	11.6		8.6
Basic - total				3.3			8.1
Diluted - total				3.3			8.0

* Headline results exclude amortisation of acquisition intangibles, Merger integration and transformation costs, property rationalisation costs, acquisition-related costs, net interest on defined benefit pension schemes, businesses to be exited, other one-off, non-recurring items and discontinued operations. Such excluded items are described as 'non-headline'.

The headline and non-headline results have been restated for the 26 weeks ended 29 October 2016 and the year ended 29 April 2017 to reflect the current period classification of the iD mobile operations in the Republic of Ireland as businesses to be exited and the Sprint Joint Venture operations and Spanish operations as discontinued operations as discussed in note 3 and note 13.

		Year ended 29 April 2017 (Restated)* Audited
	Note	Headline* £m	Non-headline* £m	Total £m
Continuing operations
Revenue	2	10,257	5	10,262

Profit / (loss) before interest and tax	2,3	505	(80)	425

Finance income		17	-	17
Finance costs		(33)	(16)	(49)
Net finance costs		(16)	(16)	(32)

Profit / (loss) before tax		489	(96)	393

Income tax (expense) / credit	4	(110)	17	(93)
Profit / (loss) after tax - continuing operations		379	(79)	300

Loss after tax - discontinued operations	10	-	(5)	(5)

Profit / (loss) after tax for the period		379	(84)	295

Earnings per share (pence)	5
Basic - continuing operations		32.9		26.1
Diluted - continuing operations		32.8		26.0
Basic - total				25.6
Diluted - total				25.5

Consolidated statement of comprehensive income

	26 weeks ended 28 October 2017 Unaudited £m	26 weeks ended 29 October 2016 Unaudited £m	Year ended 29 April 2017 Audited £m
Profit after tax for the period	38	93	295

Items that may be reclassified to the income statement in subsequent years:
Cash flow hedges
Fair value movements recognised in other comprehensive income	(3)	24	20
Reclassified and reported in income statement	(4)	(18)	(18)
Amounts recognised in inventories	8	22	22
Available-for-sale financial assets
Gains arising during the period	10	-	19
Reclassification adjustments for gains included in profit or loss	(11)	-	-
Exchange gain arising on translation of foreign operations	47	180	76
Tax on items that may be subsequently reclassified to profit or loss	-	-	(3)
	47	208	116

Items that will not be reclassified to the income statement in subsequent years:
Actuarial gains / (losses) on defined benefit pension schemes - UK	59	(184)	(144)
- Overseas	-	1	-
Deferred tax on actuarial gains / (losses) on defined benefit pension schemes	(10)	(5)	21
	49	(188)	(123)

Other comprehensive income / (expense) for the period (taken to equity)	96	20	(7)

Total comprehensive income for the period	134	113	288

Consolidated balance sheet

	Note	28 October 2017 Unaudited £m	29 October 2016 Unaudited £m	29 April 2017 Audited £m
Non-current assets
Goodwill		3,125	3,189	3,111
Intangible assets		565	558	553
Property, plant & equipment		400	413	420
Investments		18	-	19
Interests in joint ventures and associates		1	12	18
Trade and other receivables		534	447	531
Deferred tax assets		243	223	253
		4,886	4,842	4,905
Current assets
Inventory		1,375	1,348	1,101
Deferred consideration		17	3	3
Trade and other receivables		1,242	1,245	1,133
Derivative assets		18	57	17
Cash and cash equivalents		290	215	209
		2,942	2,868	2,463

Total assets		7,828	7,710	7,368
Current liabilities
Trade and other payables		(3,073)	(2,882)	(2,502)
Derivative liabilities		(8)	(47)	(13)
Deferred and contingent consideration		(8)	(2)	(8)
Income tax payable		(70)	(82)	(94)
Loans and other borrowings		-	(15)	(10)
Finance lease obligations		(3)	(2)	(3)
Provisions		(75)	(92)	(84)
		(3,237)	(3,122)	(2,714)
Non-current liabilities
Trade and other payables		(337)	(395)	(368)
Deferred and contingent consideration		(12)	(21)	(14)
Loans and other borrowings		(408)	(396)	(381)
Finance lease obligations		(85)	(87)	(86)
Retirement benefit obligations	7	(494)	(649)	(591)
Deferred tax liabilities		(134)	(113)	(138)
Provisions		(12)	(23)	(21)
		(1,482)	(1,684)	(1,599)
Total liabilities		(4,719)	(4,806)	(4,313)
Net assets		3,109	2,904	3,055

Capital and reserves
Share capital		1	1	1
Share premium reserve		2,263	2,256	2,260
Accumulated profits		1,517	1,262	1,513
Translation reserve		78	135	31
Demerger reserve		(750)	(750)	(750)
Equity attributable to equity holders of the parent company		3,109	2,904	3,055

Consolidated statement of changes in equity

	Share capital £m	Share premium reserve £m	Accumulated profits £m	Translation reserve £m	Demerger reserve £m	Total equity £m
At 29 April 2017	1	2,260	1,513	31	(750)	3,055

Profit for the period	-	-	38	-	-	38
Other comprehensive income and expense recognised directly in equity	-	-	49	47	-	96
Total comprehensive income and expense for the period	-	-	87	47	-	134

Ordinary shares issued	-	3	(2)	-	-	1
Equity dividends	-	-	(89)	-	-	(89)
Net movement in relation to share schemes	-	-	8	-	-	8
At 28 October 2017	1	2,263	1,517	78	(750)	3,109

	Share capital £m	Share premium reserve £m	Accumulated profits £m	Translation reserve £m	Demerger reserve £m	Total equity £m
At 30 April 2016	1	2,256	1,398	(45)	(750)	2,860

Profit for the period	-	-	93	-	-	93
Other comprehensive income and expense recognised directly in equity	-	-	(160)	180	-	20
Total comprehensive income and expense for the period	-	-	(67)	180	-	113

Equity dividends	-	-	(75)	-	-	(75)
Net movement in relation to share schemes	-	-	6	-	-	6
At 29 October 2016	1	2,256	1,262	135	(750)	2,904

	Share capital £m	Share premium reserve £m	Accumulated profits £m	Translation reserve £m	Demerger reserve £m	Total equity £m
At 30 April 2016	1	2,256	1,398	(45)	(750)	2,860

Profit for the period	-	-	295	-	-	295
Other comprehensive income and expense recognised directly in equity	-	-	(83)	76	-	(7)
Total comprehensive income and expense for the period	-	-	212	76	-	288

Ordinary shares issued	-	4	-	-	-	4
Equity dividends	-	-	(115)	-	-	(115)
Net movement in relation to share schemes	-	-	17	-	-	17
Tax on items recognised directly in reserves	-	-	1	-	-	1
At 29 April 2017	1	2,260	1,513	31	(750)	3,055

Consolidated cash flow statement

	Note	26 weeks ended 28 October 2017 Unaudited £m	26 weeks ended 29 October 2016 Unaudited £m	Year ended 29 April 2017 Audited £m
Operating activities
Cash generated from operations	9	298	207	478
Special contributions to defined benefit pension scheme		(46)	(18)	(43)
Income tax paid		(29)	(16)	(72)
Net cash flows from operating activities		223	173	363
Investing activities
Interest received		-	-	2
Net cash outflow arising from acquisitions		(3)	(18)	(17)
Proceeds from disposal of property, plant & equipment		2	-	9
Proceeds on sale of business		46	16	23
Dividends received from available-for-sale investments		-	-	8
Acquisition of property, plant & equipment and other intangibles		(98)	(112)	(242)
Investment in joint venture		(3)	(16)	(29)
Net cash flows from investing activities		(56)	(130)	(246)
Financing activities
Interest paid		(9)	(11)	(17)
Repayment of obligations under finance leases		(4)	(1)	(8)
Issue of ordinary shares		3	-	4
Equity dividends paid		(89)	(75)	(115)
Increase / (decrease) in borrowings		17	(14)	(18)
Facility arrangement fees paid		-	(3)	(2)
Net cash flows from financing activities		(82)	(104)	(156)

Increase / (decrease) in cash and cash equivalents		85	(61)	(39)


Cash and cash equivalents at beginning of the period		209	233	233
Currency translation differences		(4)	28	15
Cash and cash equivalents at end of the period		290	200	209

Financial information

Notes to the financial information

1 Basis of preparation

The interim financial information for the 26 weeks ended 28 October 2017 was approved by the directors on 12 December 2017. The interim financial information, which is a condensed set of financial statements, has been prepared in accordance with the Listing Rules of the Financial Conduct Authority and International Accounting Standard 34 "Interim Financial Reporting" (IAS 34) as adopted by the European Union and has been prepared on the going concern basis as described further in the section on risks to achieving the Group's objectives.

The accounting policies adopted are those set out in the Group's Annual Report and Accounts for the year ended 29 April 2017 which were prepared in accordance with IFRS as adopted by the European Union. New accounting standards, amendments to standards and IFRIC interpretations which became applicable during the period were either not relevant or had no impact on the Group's net results or net assets.

The interim financial information uses definitions that are set out on pages 37 to 41 of this document.

The interim financial information is unaudited and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006, but has been reviewed by the auditor. The financial information for the year ended 29 April 2017 does not constitute the Company's statutory accounts for that period but has been extracted from those accounts which have been filed with the Registrar of Companies and are also available on the Group's corporate website www.dixonscarphone.com. The auditor has reported on those accounts, their report was unqualified, did not draw attention to any matters by way of emphasis, and did not contain statements under Sections 498 (2) or (3) of the Companies Act 2006.

The Group's income statement and segmental analysis identify separately headline performance and non-headline items. Headline performance measures reflect adjustments to total performance measures. The directors consider 'headline' performance measures to be an informative additional measure of the ongoing trading performance of the Group and believe that these measures provide additional useful information for shareholders on the Group's performance and are consistent with how business performance is measured internally.

Headline results are stated before the results of discontinued operations or exited / to be exited businesses, amortisation of acquisition intangibles, acquisition related costs, any exceptional items considered so one-off and material that they distort underlying performance (such as reorganisation costs, impairment charges, property rationalisation costs and non-recurring charges) income from previously disposed operations and net pension interest costs. Businesses exited or to be exited are those which the Group has exited or committed to or commenced to exit through disposal or closure but do not meet the definition of discontinued operations as stipulated by IFRS and are material to the results and/or operations of the Group.

A reconciliation of headline profit and losses to total profits and losses is shown in note 2, together with a description of the nature of the non-headline results recorded.

Items excluded from headline results can evolve from one financial year to the next depending on the nature of exceptional items or one-off type activities described above. Headline performance measures and non-headline performance measures may not be directly comparable with other similarly titled measures or 'adjusted' revenue or profit measures used by other companies.

The accounting policy for the use of these measures is outlined in the 'Alternative Performance Measures' section of the Glossary.

2 Segmental analysis

The Group's operating segments reflect the segments routinely reviewed by the Board and which are used to manage performance and allocate resources. This information is predominantly based on geographical areas which are either managed separately or have similar trading characteristics such that they can be aggregated together into one segment.

The Group operates four operating segments as described below. Discontinued operations are excluded from this segmental analysis. Results are reviewed by the Board on a headline basis by segment.

The Group's reportable segments have been identified as follows:

• UK & Ireland comprises operations in the UK and Ireland, the Dixons Travel business and the non-honeybee B2B operations which leverages the specialist skills, operating processes and technology of the Group to provide managed services to third parties looking to develop their own connected world solutions.

• Nordics operates in Norway, Sweden, Finland, Denmark and Iceland.

• Greece, consisting of our ongoing operations in Greece and for non-headline items, our previously disposed operations in Southern Europe.

• honeybee comprises our proprietary IT multi-industry software that simplifies the delivery and management of complex digital customer journeys.

Non-headline results are allocated to each reportable segment. Where these relate to businesses to be exited or income or expense from previously disposed operations, they are allocated where practicable to the region in which the operation was originally held.

UK & Ireland, Nordics and Greece are involved in the sale of consumer electronics and mobile technology products and services, primarily through stores or online channels.

During the period, the reportable segments of the Group have changed, and reflect the updated segments reported to the Board, who are considered the Chief Operating Decision Maker under IFRS 8 "Operating Segments". Previously, segmental results for Connected World Services consisted of both our honeybee and Connected World Services divisions, which was the B2B operations providing managed services to third parties. The Connected World Services division has now been allocated to the respective segmental market (either UK & Ireland, Nordics or Greece). In addition, as a result of the disposal of our Spain operations and the Sprint Joint Venture, these results have also been excluded from the segmental allocation as are treated as discontinued operations.

The restatement of comparative information for these segments has been set out in part (b) of this note.

Transactions between segments are on an arm's length basis.

2 Segmental analysis (continued)

(a) Segmental results

				26 weeks ended 28 October 2017
	UK & Ireland £m	Nordics £m	Greece £m	honeybee £m	Eliminations £m	Total £m
Headline external revenue*	3,009	1,666	191	2	-	4,868
Inter-segmental revenue	36	-	-	-	(36)	-
Total headline revenue*	3,045	1,666	191	2	(36)	4,868

Headline EBIT*	34	42	6	(12)	-	70

Reconciliation of headline profit to total profit

					26 weeks ended 28 October 2017
	Headline profit / (loss)* £m	Businesses to be exited £m	Amortisation of acquisition intangibles £m	Merger integration and transformation costs £m	Pension scheme interest £m	Unieuro income £m	Total profit / (loss)* £m
UK & Ireland	34	(3)	(10)	(1)	-	-	20
Nordics	42	-	(6)	(1)	-	-	35
Greece	6	-	-	-	-	10	16
honeybee	(12)	-	-	-	-	-	(12)
EBIT	70	(3)	(16)	(2)	-	10	59
Finance income	7	-	-	-	-	-	7
Finance costs	(16)	-	-	-	(8)	-	(24)
Profit / (loss) before tax	61	(3)	(16)	(2)	(8)	10	42

* Headline results and total profit/(loss) have been restated to exclude the results of the iD mobile operations In the Republic of Ireland, which have been classified as businesses to be exited, the Sprint Joint Venture operations and Spanish operations, which have been classified as discontinued operations, and comparatives have been restated accordingly as discussed in note 3 and note 13.

2 Segmental analysis (continued)

(a) Segmental results

				26 weeks ended 29 October 2016
	UK & Ireland £m	Nordics £m	Greece £m	honeybee £m	Eliminations £m	Total £m
Headline external revenue*	3,067	1,476	167	8	-	4,718
Inter-segmental revenue	28	-	-	-	(28)	-
Total headline revenue*	3,095	1,476	167	8	(28)	4,718

Headline EBIT*	130	34	3	(4)	-	163

Reconciliation of headline profit to total profit

				26 weeks ended 29 October 2016
	Headline profit / (loss)* £m	Businesses to be exited £m	Amortisation of acquisition intangibles £m	Merger integration and transformation costs £m	Pension scheme interest £m	Total profit / (loss)* £m
UK & Ireland	130	(4)	(10)	(15)	-	101
Nordics	34	-	(6)	-	-	28
Greece	3	-	-	-	-	3
honeybee	(4)	-	-	-	-	(4)
EBIT	163	(4)	(16)	(15)	-	128
Finance income	7	-	-	-	-	7
Finance costs	(16)	-	-	-	(8)	(24)
Profit / (loss) before tax	154	(4)	(16)	(15)	(8)	111

* Headline results and total profit/(loss) have been restated to exclude the results of the iD mobile operations In the Republic of Ireland, which have been classified as businesses to be exited, the Sprint Joint Venture operations and the Spain operations, which have been classified as discontinued operations, and comparatives have been restated accordingly as discussed in note 3 and note 13.

2 Segmental analysis (continued)

(a) Segmental results (continued)

				Year ended 29 April 2017
	UK & Ireland £m	Nordics £m	Greece £m	honeybee £m	Eliminations £m	Total £m
Headline external revenue*	6,735	3,159	348	15	-	10,257
Inter-segmental revenue	81	-	-	-	(81)	-
Total headline revenue*	6,816	3,159	348	15	(81)	10,257

Headline EBIT*	417	89	10	(11)	-	505

Reconciliation of headline profit to total profit

						Year ended 29 April 2017
	Headline* profit / (loss) £m	Businesses to be exited £m	Amortisation of acquisition intangibles £m	Merger integration and transformation costs £m	Pension scheme interest £m	Unieuro income £m	Share plan taxable benefit compensation £m	Total profit / (loss)* £m
UK & Ireland	417	(10)	(21)	(28)	-	-	(10)	348
Nordics	89	-	(12)	(3)	-	-	(1)	73
Greece	10	-	-	-	-	5	-	15
honeybee	(11)	-	-	-	-	-	-	(11)
EBIT	505	(10)	(33)	(31)	-	5	(11)	425
Finance income	17	-	-	-	-	-	-	17
Finance costs	(33)	-	-	-	(16)	-	-	(49)
Profit / (loss) before tax	489	(10)	(33)	(31)	(16)	5	(11)	393

* Headline results and total profit/(loss) have been restated to exclude the results of the iD mobile operations In the Republic of Ireland, which have been classified as businesses to be exited, the Sprint Joint Venture operations and Spain operations, which have been classified as discontinued operations, and comparatives have been restated accordingly as discussed in note 3 and note 13.

(b) Restatement of segmental information

As discussed above, during the period the Group's reportable segments have been changed, and comparatives have been restated accordingly. The below tables provide reconciliations for the headline Revenue and headline EBIT for the year ended 29 April 2017 and 26 weeks ended 29 October 2016. The adjustments relevant for both periods are:

· Reallocation of honeybee revenues from Connected World Services to honeybee

· Allocation of previous B2B operations within Connected World Services to geographic segments

· Removal of Spain results from Southern Europe as treated as a discontinued operation (see note 10)

The restated comparatives for the 26 weeks ended 29 October 2016 have also been adjusted to remove the iD Mobile Ireland and Sprint Joint Venture results which were previously treated as 'non-headline' as set out in note 3.

26 weeks ended 29 October 2016

				26 weeks ended 29 October 2016
	Total headline Revenue as previously reported £m	Reallocate honeybee Revenues £m	Reallocate remaining CWS revenues £m	Remove Spain results £m	Remove iD Mobile Ireland results £m	Total £m
UK & Ireland	2,988	-	81	-	(2)	3,067
Nordics	1,474	-	2	-	-	1,476
Southern Europe / Greece	309	-	7	(149)	-	167
Connected World Services	98	(8)	(90)	-	-	-
honeybee	-	8	-	-	-	8
Total headline revenue	4,869	-	-	(149)	(2)	4,718

					26 weeks ended 29 October 2016
	Total headline EBIT as previously reported £m	Reallocate honeybee Results £m	Reallocate remaining CWS results £m	Remove Spain results £m	Remove iD Mobile Ireland results £m	Remove Sprint Joint Venture results £m	Total £m
UK & Ireland	109	-	17	-	4	-	130
Nordics	34	-	-	-	-	-	34
Southern Europe / Greece	5	-	-	(2)	-	-	3
Connected World Services	5	4	(17)	-	-	8	-
honeybee	-	(4)	-	-	-	-	(4)
Total headline EBIT	153	-	-	(2)	4	8	163

Year ended 29 April 2017

			Year ended 29 April 2017
	Total headline Revenue as previously reported £m	Reallocate honeybee Revenues £m	Reallocate remaining CWS revenues £m	Remove Spain results £m	Total £m
UK & Ireland	6,550	-	185	-	6,735
Nordics	3,156	-	3	-	3,159
Southern Europe / Greece	661	-	10	(323)	348
Connected World Services	213	(15)	(198)	-	-
honeybee	-	15	-	-	15
Total headline revenue	10,580	-	-	(323)	10,257

			Year ended 29 April 2017
	Total headline EBIT as previously reported £m	Reallocate honeybee Results £m	Reallocate remaining CWS results £m	Remove Spain results £m	Total £m
UK & Ireland	385	-	32	-	417
Nordics	89	-	-	-	89
Southern Europe / Greece	22	-	-	(12)	10
Connected World Services	21	11	(32)	-	-
honeybee	-	(11)	-	-	(11)
Total headline EBIT	517	-	-	(12)	505

The Group's business is highly seasonal, with a substantial proportion of its revenue and EBIT generated during its third quarter, which includes Black Friday and the Christmas and New Year season.

3 Non-headline items

	Note	26 weeks ended 28 October 2017 £m	26 weeks ended 29 October 2016 (restated) £m	Year ended 29 April 2017 (restated) £m
Included in revenue:
Businesses to be exited	(i)	3	2	5
		3	2	5

Included in profit / (loss) before interest and tax:
Businesses to be exited	(i)	(3)	(4)	(10)
Amortisation of acquisition intangibles	(ii)	(16)	(16)	(33)
Merger and transformation related costs	(iii)	(2)	(15)	(31)
Share plan taxable benefit compensation	(iv)	-	-	(11)
Unieuro income	(v)	10	-	5
		(11)	(35)	(80)

Included in net finance costs:
Net non-cash finance costs on defined benefit pension schemes	(vi)	(8)	(8)	(16)
Total impact on profit / (loss) before tax - continuing operations		(19)	(43)	(96)

Tax on non-headline items		15	8	17
Total impact on profit / (loss) after tax - continuing operations		(4)	(35)	(79)

Discontinued operations	10	(4)	(7)	(5)
Total impact on profit / (loss) after tax		(8)	(42)	(84)

(i) Businesses to be exited

Comprises the trading result of businesses to be exited where they do not meet the criteria under IFRS 5 "Non-Current Assets Held for Sale and Discontinued Operations", for separate disclosure as discontinued operations. This comprises the results of the iD mobile operations in the Republic of Ireland for which a decision was announced to exit the business at the prior year end. The results of the Ireland MVNO have therefore been classified as non-headline items in the income statement and related disclosures. Restated amounts are set out in note 13.

(ii) Amortisation of acquisition intangibles:

This relates to acquisition intangibles arising on the CPW Europe Acquisition, the Dixons Retail Merger and Simplifydigital acquisition.

(iii) Merger and transformation related costs:

The Merger has given rise to the following costs which have been treated as non-headline:

· Merger integration costs of £nil (2016/17: £9 million, year ended 29 April 2017: £18 million) relate to the reorganisation of the Group following the Merger and primarily comprise professional fees, employee severance and incentive costs associated with the integration process, which are now complete.

· During the prior period, functional transformation projects commenced across the finance, procurement and human resources functions to rationalise shared service centre activities and harmonise policies and procedures across key support functions of the business. The cost of £2 million (2016/17: £6 million, year ended 29 April 2017: £13 million) primarily relates to consultancy fees.

(iv) Share plan taxable benefit compensation:

A provision of £11 million was recognised in 2016/17 in relation to taxable benefits arising to participants of the Share Plan, as discussed in the Remuneration Committee Chairmen's statement on page 61 of the 2016/17 Annual Report. Compensation will be paid to participants of the non-vested Share Plan for any taxable benefit arising on the waiver of any portion of loans granted under the scheme.

(v) Unieuro income

In November 2013, the Group disposed of its Unieuro operations, and retained an investment of 14.96% in Italian Electronics Holdings s.r.l (IEH)‌‌ , a holding company which in turn owned 100% of the Unieuro operations. The investment was initially recognised at £nil based on the fair value of the retained interest. In March 2017, Unieuro undertook an IPO for 31.8% of its shareholdings, which reduced the Group's investment to 10.2% of the Unieuro operations. As a result of the IPO, the Group received a dividend from the intermediate holding company of £5 million, which was treated as non-headline in 2016/17 as it relates to a disposal of a portion of our investment.

In October 2017, IEH announced a corporate restructuring, whereby the Group obtained direct control of the investment of 7.18% in Unieuro, together with a receivable for previous dividends and share sales. The amount realised as a result of the dividend and share sale of £10 million has been recycled to the income statement.

(vi) Net non-cash financing costs on defined benefit pension schemes:

The net interest charge on defined benefit pension schemes represents the non-cash remeasurement calculated by applying the corporate bond yield rates applicable on the last day of the previous financial year to the net defined benefit obligation. As a non-cash remeasurement cost which is unrepresentative of the actual investment gains or losses made or the liabilities paid and payable the accounting effects of this is excluded from headline earnings.

4 Tax

The Group's headline effective rate of taxation for the full year has been estimated at 22% (2016/17: 23% before the recognition of tax credits). A rate of 24% has been applied to the half year results due to the weighting of profit in different jurisdictions. The rate is higher than the UK statutory rate of 19% due mainly to higher statutory rates in the Nordics and certain non-deductible items arising mainly in the UK.

The effective tax rate on non-headline earnings and costs is 78%, largely representing the recognition of previously unrecognised deferred tax assets in Greece of £11 million.

5 Earnings / (loss) per share

	26 weeks ended 28 October 2017 £m	26 weeks ended 29 October 2016 (restated) £m	Year ended 29 April 2017 (restated) £m
Headline earnings
Continuing operations	46	135	379

Total earnings / (loss)
Continuing operations	42	100	300
Discontinued operations	(4)	(7)	(5)
Total	38	93	295

	Million	Million	Million
Weighted average number of shares
Average shares in issue	1,156	1,152	1,152
Less average holding by Group EBT	(1)	(1)	(1)
For basic earnings per share	1,155	1,151	1,151
Dilutive effect of share options and other incentive schemes	3	12	4
For diluted earnings per share	1,158	1,163	1,155

	Pence	Pence	Pence
Basic earnings per share
Total (continuing and discontinued operations)	3.3	8.1	25.6
Adjustment in respect of discontinued operations	0.3	0.6	0.5
Continuing operations	3.6	8.7	26.1
Adjustments for non-headline items - continuing operations (net of taxation)	0.4	3.0	6.8
Headline basic earnings per share	4.0	11.7	32.9

Diluted earnings per share
Total (continuing and discontinued operations)	3.3	8.0	25.5
Adjustment in respect of discontinued operations	0.3	0.6	0.5
Continuing operations	3.6	8.6	26.0
Adjustments for non-headline items - continuing operations (net of taxation)	0.4	3.0	6.8
Headline diluted earnings per share	4.0	11.6	32.8

Basic and diluted earnings per share are based on the profit for the period attributable to equity shareholders. Headline earnings per share is presented in order to show the underlying performance of the Group. Adjustments used to determine headline earnings are described further in note 3.

6 Dividends

	26 weeks ended 28 October 2017 £m	26 weeks ended 29 October 2016 £m	Year ended 29 April 2017 £m
Amounts recognised as distributions to equity shareholders in the period - on ordinary shares of 0.1p each
Final dividend for the year ended 30 April 2016 of 6.50p	-	75	75
Interim dividend for the year ended 29 April 2017 of 3.50p	-	-	40
Final dividend for the year ended 29 April 2017 of 7.75p	89	-	-
	89	75	115

The proposed interim dividend for the year ending 28 April 2018 is 3.50p per share. The expected cost of this dividend is £41 million and incorporates the agreement of the Dixons Carphone plc Employee Benefit Trust to waive its rights to receive dividends.

7 Retirement benefit obligations

	28 October 2017 £m	29 October 2016 £m	29 April 2017 £m
Retirement benefit obligations - UK	492	646	589
- Nordics	2	3	2
Net obligation	494	649	591

The Group operates a number of defined contribution and defined benefit pension schemes. The principal scheme operates in the UK and includes a funded defined benefit section, the assets of which are held in a separate trustee administered fund. The defined benefit section of the scheme was closed to future accrual on 30 April 2010. The net obligations of this scheme, calculated in accordance with IAS 19 "Employee Benefits", are analysed as follows:

	28 October 2017 £m	29 October 2016 £m	29 April 2017 £m
Fair value of plan assets	1,148	1,109	1,125
Present value of defined benefit obligations	(1,640)	(1,755)	(1,714)
Net obligation	(492)	(646)	(589)

The value of obligations is particularly sensitive to the discount rate applied to liabilities at the assessment date as well as mortality rates. The value of the plan assets is sensitive to market conditions, particularly equity values. The assumptions used in the valuation of obligations are listed below:

		28 October 2017	29 October 2016	29 April 2017
Rates per annum:
Discount rate		2.75%	2.75%	2.60%
Rate of increase in pensions in payment / deferred pensions	- pre April 2006	3.10%	3.30%	3.20%
	- post April 2006	2.20%	2.25%	2.20%
Inflation		3.20%	3.40%	3.30%

Mortality rates are based on historical experience and standard actuarial tables and include an allowance for future improvements in longevity.

8 Financial instruments, loans and other borrowings

The Group holds the following financial instruments at fair value:

	28 October 2017 £m	29 October 2016 £m	29 April 2017 £m
Investments	18	-	19
Net derivative financial assets	18	57	17
Net derivative financial liabilities	(8)	(47)	(13)
Deferred and contingent consideration	(20)	(23)	(22)

The fair value of short-term investments has values determined by 'Level 1' inputs as defined by the fair value hierarchy of IFRS 13 "Fair Value Measurement". Investments comprise shares indirectly held in Unieuro S.p.A., an omni-channel distributor of consumer electronics and household appliances and listed stock corporation in Italy.

The significant inputs required to fair value the Group's net derivatives are observable and are classified as 'Level 2' in the fair value hierarchy.

Deferred and contingent consideration is categorised as 'Level 3' in the fair value hierarchy as the valuation requires the use of significant unobservable inputs. The fair value of contingent consideration arrangements has been estimated by applying the income approach. A reduction in growth assumptions used in the fair value methodology would result in a reduction in the amount of contingent consideration payable. The movement in deferred and contingent consideration during the period is due to cash payments of the amounts due.

Fair values have been arrived at by discounting future cash flows (where the impact of discounting is material), assuming no early redemption, or by revaluing forward currency contracts and interest rate swaps to period end market rates as appropriate to the instrument.

The Group has assessed network commission receivables to meet the definition of loans and receivables as defined in IAS 39 "Financial Instruments: Recognition and measurement" and are therefore accounted for at amortised cost. The carrying value of such network commission receivables is £1,071 million (29 October 2016: £961 million, 29 April 2017: £1,014 million). If network receivables were alternatively classified at fair value through profit or loss these receivables would be categorised as level 3 in the fair value hierarchy as the valuation requires the use of significant unobservable inputs. Under this alternative measurement basis their fair value is approximately equal to their current carrying value.

There have been no transfers of assets or liabilities between levels of the fair value hierarchy. For all other financial assets and liabilities, the carrying amount approximates their fair value.

In October 2015, the Group arranged a five year £800m Revolving Credit Facility with a number of relationship banks. The interest rate applicable to loans drawn on this facility depends on the period of the loan and the currency in which they are drawn, and the interest margin is calculated by reference to covenant performance. The covenants ratios are Net Debt to EBITDA and Fixed Charges Cover. In 2016 and in 2017, this facility was extended by one year and the final expiry of the facility is now October 2022.

In October 2016, the Group arranged a new £250m Revolving Credit Facility and a €50m Term Loan. Each of these facilities is on similar terms to the £800m RCF, including identical covenants, and each is for four years expiring in October 2020.

The Group also has overdrafts and short-term money market lines, all on an uncommitted basis, with available facilities of £139m.

9 Note to the cash flow statement

	26 weeks ended 28 October 2017 £m	26 weeks ended 29 October 2016 £m	Year ended 29 April 2017 £m
Profit before interest and tax - continuing operations	59	128	425
Profit before interest and tax - discontinued operations	(4)	(7)	(8)
Depreciation and amortisation	102	92	186
Investment income	-	-	(8)
Profit on disposal	(2)	-	-
Share-based payment charge	9	6	17
Share of results of joint venture	3	8	17
Impairments and other non-cash items	1	1	3
Operating cash flows before movements in working capital	168	228	632

Movements in working capital:
Increase in inventory	(285)	(321)	(112)
Increase in receivables	(149)	(157)	(130)
Increase in payables	583	471	110
(Decrease) in provisions	(19)	(14)	(22)
	130	(21)	(154)


Cash inflow from operations	298	207	478

Restricted funds, which predominantly comprise funds held by the Group's insurance business for regulatory reserve requirements, were £60 million (29 October 2016: £58 million; 29 April 2017: £62 million).

Reconciliation of cash inflow from operations to free cash flow

	26 weeks ended 28 October 2017 £m	26 weeks ended 29 October 2016 £m	Year ended 29 April 2017 £m
Cash inflow from operations	298	207	478
Operating cash flows from discontinued operations	6	(4)	(12)
Businesses to be exited	4	1	-
Taxation	(30)	(17)	(71)
Interest, facility arrangement fees, dividends from investments and repayment of finance leases	(12)	(15)	(15)
Capital expenditure	(96)	(109)	(237)
Proceeds from disposal of fixed assets	2	-	9
Other movements	(3)	1	-
Free cash flow	169	64	152

Reconciliation of Net Debt

	26 weeks ended 28 October 2017 £m	26 weeks ended 29 October 2016 £m	Year ended 29 April 2017 £m
Cash	290	215	209
Loans and other borrowings	(408)	(411)	(391)
Finance lease obligations	(88)	(89)	(89)
	(206)	(285)	(271)

10 Discontinued operations and assets held for sale

Spain

On 29 September 2017, the Group completed the disposal of Phone House Spain S.L.U, Connected World Services Europe Srl and Smarthouse Spain S.A which together represented the trading operations in Spain. A gain of £1 million arose on the disposal, being the difference between the proceeds of disposal and the carrying amount of the subsidiaries' net assets and attributable goodwill. The trading results of the operations have been classified as discontinued (£Nil, 2016/17: £1 million profit).

Sprint joint venture

On 7 June 2017 agreement was reached to dispose of the Group's 50% interest in the Sprint Connect LLC joint venture to Sprint Corporation. £nil gain or loss was recognised in relation to the disposal. The share of results of the operation to the date of disposal have been classified as discontinued (£3 million loss, 2016/17: £8 million loss) together with additional costs of £3 million incurred by the Group post closure.

Other

As previously reported the sale of operations in Germany was completed on 5 May 2015, the Netherlands on 30 June 2015 and Portugal on 31 August 2015.

(a) Loss after tax - discontinued operations

	26 weeks ended 28 October 2017
	Spain £m	Sprint Joint Venture £m	Other £m	Total £m
Revenue	144	-	-	144
Expenses	(144)	(3)	-	(147)
Share of results of joint venture	-	(3)	-	(3)

(Loss) before tax	-	(6)	-	(6)
Income tax	-	-	-	-
Profit on disposal	1	-	1	2
	1	(6)	1	(4)

	26 weeks ended 29 October 2016
	Spain £m	Sprint Joint Venture £m	Other £m	Total £m
Revenue	149	-	-	149
Expenses	(148)	-	-	(148)
Share of results of joint venture	-	(8)	-	(8)

Profit / (Loss) before tax	1	(8)	-	(7)
Income tax	-	-	-	-
(Loss) / profit on disposal	-	-	-	-
	1	(8)	-	(7)

	Year ended 29 April 2017
	Spain £m	Sprint Joint Venture £m	Other £m	Total £m
Revenue	323	-	-	323
Expenses	(312)	(1)	(1)	(314)
Share of results of joint venture	-	(17)	-	(17)
Investment income	-	-	5	5

Profit / (Loss) before tax	11	(18)	4	(3)
Income tax	(2)	-	-	(2)
(Loss) / profit on disposal	-	-	-	-
	9	(18)	4	(5)

(b) Cash flows from discontinued operations

	26 weeks ended 28 October 2017
	Spain £m	Sprint Joint Venture £m	Other £m	Total £m
Operating activities	(2)	(2)	(2)	(6)
Investing activities	23	14	4	41
Financing activities	-	-	-	-

	26 weeks ended 29 October 2016
	Spain £m	Sprint Joint Venture £m	Other £m	Total £m
Operating activities	4	-	-	4
Investing activities	(3)	(16)	16	(3)
Financing activities	-	-	-	-

	Year ended 29 April 2017
	Spain £m	Sprint Joint Venture £m	Other £m	Total £m
Operating activities	14	(1)	(1)	12
Investing activities	(5)	(29)	22	(12)
Financing activities	-	-	-	-

11 Contingent liabilities

In recent years the Group has entered into agreements to dispose of certain operations. As part of these disposal agreements, the Group has provided the acquirer with general and tax-related warranties. At the date of signing these financial statements, some of these warranties remain open and it is possible that claims could arise under these warranties. Due to the nature of these contingent liabilities, it is not practicable to estimate their timing or possible financial impact.

The Group is subject to periodic tax audits and investigations by various tax authorities covering corporate, employee and sales taxes across various jurisdictions in which the Group operates. Applicable tax laws and regulations are subject to differing interpretations and the resolution of a final tax position, through negotiation or litigation, can take several years to complete. The Group is currently cooperating with HMRC in relation to open tax enquiries arising from pre-merger legacy corporate transactions, including a specific enquiry into the tax treatment as a result of the formation of the joint venture with Best Buy Inc. in 2008, which may result in litigation. The potential range of tax exposure relating to this enquiry is £nil - £40 million excluding interest and penalties, for which no provision has been made. Resolution is expected within one to three years for these enquiries.

Where it is considered that future tax liabilities are more likely than not to arise, an appropriate provision is recorded in the financial statements.

12 Related party transactions

Transactions between the Group's subsidiary undertakings, which are related parties, have been eliminated on consolidation and accordingly are not disclosed.

The Group had the following transactions and balances with its associates and joint venture:

26 weeks ended 28 October

2017

£m

26 weeks ended 29 October

2016

£m

Year ended

29 April

2017

£m

Revenue for services provided

Amounts owed to the Group

All transactions entered into with related parties were completed on an arm's length basis.

13 Restatement of comparative information

As set out in note 10, the Spain operations and the results of the Sprint Joint Venture have been classified as discontinued operations, as meet the classification requirements under IFRS 5: "Non-Current Assets Held for Sale and Discontinued Operations". In accordance with the requirements, comparative results for the year ended 29 April 2017 and the 26 weeks ended 29 October 2016 have been restated accordingly.

(a) Income statement

Year ended 29 April 2017

The impact of the restatement on the consolidated income statement has been set out below:

	Headline results					Non-headline results					Total
	2016/17 as previously reported £million	Spain £million	Sprint Joint Venture £million	2016/17 as restated £million	2016/17 as previously reported £million		Spain £million	Sprint Joint Venture £million	2016/17 as restated £million	2016/17 as restated £million
Continuing operations
Revenue	10,580	(323)	-	10,257	5		-	-	5	10,262
Profit / (loss) from operations before share of results of joint ventures	517	(12)	-	505	(82)		1	1	(80)	425
Share of results of joint ventures	-	-	-	-	(17)		-	17	-	-
Profit / (loss) before interest and tax	517	(12)	-	505	(99)		1	18	(80)	425
Net finance costs	(16)	-	-	(16)	(16)		-	-	(16)	(32)

Profit / (loss) before tax	501	(12)	-	489	(115)		1	18	(96)	393

Income tax (expense) / credit	(112)	2	-	(110)	17		-	-	17	(93)
Profit / (loss) after tax - continuing operations	389	(10)	-	379	(98)		1	18	(79)	300

Loss after tax - discontinued operations	-	-	-	-	4		9	(18)	(5)	(5)

Profit / (loss) after tax for the period	389	(10)	-	379	(94)		10	-	(84)	295

Earnings per share (pence)
Basic - continuing operations	33.8p			32.9p						26.1p
Diluted - continuing operations	33.7p			32.8p						26.0p
Basic - total										25.6p
Diluted - total										25.5p

26 weeks ended 29 October 2016

In addition to the restatements for discontinued operations, the results of iD Mobile Ireland have been classified from headline results to 'businesses to be exited' in line with the treatment in the year ended 29 April 2017:

		Headline results					Non-headline results					Total
	H1 2016/17 as previously reported £million	Spain £million	Sprint Joint Venture £million	iD Mobile Ireland £million	H1 2016/17 as restated £million	H1 2016/17 as previously reported £million		Spain £million	Sprint Joint Venture £million	iD Mobile Ireland £million	H1 2016/17 as restated £million		H1 2016/17 as restated £million
Continuing operations
Revenue	4,869	(149)	-	(2)	4,718	-		-	-	2	2		4,720
Profit / (loss) from operations before share of results of joint ventures	161	(2)	-	4	163	(32)		1	-	(4)	(35)		128
Share of results of joint ventures	(8)	-	8	-	-	-		-	-	-	-		-
Profit / (loss) before interest and tax	153	(2)	8	4	163	(32)		1	-	(4)	(35)		128
Net finance costs	(9)	-	-	-	(9)	(8)		-	-	-	(8)		(17)

Profit / (loss) before tax	144	(2)	8	4	154	(40)		1	-	(4)	(43)		111

Income tax (expense) / credit	(19)	-	-	-	(19)	8		-	-	-	8		(11)
Profit / (loss) after tax - continuing operations	125	(2)	8	4	135	(32)		1	-	(4)	(35)		100

Loss after tax - discontinued operations	-	-	-	-	-	-		1	(8)	-	(7)		(7)

Profit / (loss) after tax for the period	125	(2)	8	4	135	(32)		2	(8)	(4)	(42)		93

Earnings per share (pence)
Basic - continuing operations	10.9p				11.7p								8.7p
Diluted - continuing operations	10.7p				11.6p								8.6p
Basic - total													8.1p
Diluted - total													8.0p

(b) Other disclosures

Segmental results have been restated as a result of the above as set out in Note 2.

In accordance with the policy as set out in Note 1, there have been no restatements made to the consolidated balance sheet, consolidated statement of other comprehensive income, consolidated statement of changes in equity or consolidated cash flow statement, as these statements do not separately distinguish headline and non-headline measures.

The free cash flow as presented in the Performance Review has also been restated as a result of the above changes. The reconciliation from the previously reported results are presented below:

Year ended 29 April 2017

	Year ended 29 April 2017
	As previously reported £m	Spain £m	Total £m
Headline EBIT	517	(12)	505
Depreciation and amortisation	152	(3)	149
Working capital	(104)	-	(104)
Capital expenditure	(242)	5	(237)
Taxation	(72)	1	(71)
Interest	(23)	-	(23)
Other items	2	-	2
Free cash flow before restructuring items	230	(9)	221
Restructuring costs	(70)	1	(69)
Free cash flow - continuing operations	160	(8)	152
Dividends	(115)	-	(115)
Acquisitions and disposals including discontinued operations	(25)	8	(17)
Pension contributions	(43)	-	(43)
Other	19	-	19
Movement in net debt	(4)	-	(4)
Opening net debt	(267)	-	(267)
Closing net debt	(271)	-	(271)

26 weeks ended 29 October 2016

			26 weeks ended 29 October 2016
	As previously reported £m	Spain £m	Sprint Joint Venture £m	iD Mobile Ireland £m	Total £m
Headline EBIT	153	(2)	8	4	163
Share of results of Joint Venture	8	-	(8)	-	-
Depreciation and amortisation	75	(2)	-	(1)	72
Working capital	16	1	-	(2)	15
Capital expenditure	(112)	3	-	-	(109)
Taxation	(16)	(1)	-	-	(17)
Interest	(15)	-	-	-	(15)
Free cash flow before restructuring items	109	(1)	-	1	109
Restructuring costs	(44)	-	-	(1)	(45)
Free cash flow - continuing operations	65	(1)	-	-	64
Dividends	(75)	-	-	-	(75)
Acquisitions and disposals including discontinued operations	(2)	1		-	(1)
Investment in joint venture	(16)	-		-	(16)
Pension contributions	(18)	-	-	-	(18)
Other	28	-	-	-	28
Movement in net debt	(18)	-	-	-	(18)
Opening net debt	(267)	-	-	-	(267)
Closing net debt	(285)	-	-	-	(285)

Risks to achieving the Group's objectives

The Board continually reviews and monitors the risks and uncertainties which could have a material effect on its results. The updated risks and uncertainties (including an additional taxation risk) are listed below: Risks 1 to 13, and the factors which mitigate them, are set out in more detail in the 2016-17 Annual Report and Accounts on pages 16 to 21 and remain relevant in the current period.

1. Dependence on networks in driving profitability, cash flow and market share;

2. Dependence on key suppliers in driving profitability, cash flow and market share;

3. The decision of the UK to leave the European Union could lead to a period of economic uncertainty and a loss of consumer confidence, foreign exchange volatility and long term changes in tax and other regulations which may impact the Group's operations and financial performance;

4. A potential Greek exit from the Euro and/or ongoing austerity could lead to a deterioration in consumer confidence impacting the performance of the Greek business, Kotsovolos;

5. Failure to maintain a sustainable business model in the face of a changing consumer environment could result in a loss of competitive advantage impacting financial performance;

6. Failure to comply with Financial Services regulation could result in reputational damage, customer compensation, financial penalties and a resultant deterioration in financial performance;

7. Failure in appropriately safeguarding sensitive information and failure to comply with legislation could result in reputational damage, financial penalties and a resultant deterioration in financial performance;

8. Failure to appropriately safeguard against cyber risks and associated attacks could result in reputational damage, customer compensation, financial penalties and a resultant deterioration in financial performance;

9. Failure to action appropriate Health and Safety measures resulting in injury could give rise to reputational damage and financial penalties;

10. Business continuity plans are not effective and major incident response is inadequate resulting in reputational damage and a loss of competitive advantage;

11. Failure to adequately invest in and integrate the Group's IT systems and infrastructure could result in restricted growth and reputational damage impacting financial performance;

12. Failure to attract, develop and retain staff with sufficient talent and capabilities could lead to a loss of competitive advantage impacting financial performance; and

13. Failure to operate an effective fraud control environment may result in the loss of revenue and reputational damage.

14. Crystalisation of potential tax exposures resulting from legacy corporate transactions, employee and sales taxes arising from periodic tax audits and investigations across various jurisdictions in which the Group operates may impact cash flows for the Group. The Group mitigates this risk through Board and internal committee oversight that actively monitors tax strategy implementation, including the appropriate engagement of third party specialists to provide independent advice where deemed appropriate.

The directors have prepared the interim financial information on a going concern basis. In considering the going concern basis, the directors have considered the above mentioned principal risks and uncertainties, especially in the context of a highly competitive consumer and retail environment as well as the wider macro-economic environment and how these factors might influence the Group's objectives and strategy.

The directors have reviewed the Group's future cash forecasts and profit projections, which are based on market data and past experience. The directors are of the opinion that the Group's forecasts and projections, which take into account reasonably possible changes in trading performance, show that the Group is able to operate within its current facilities and comply with its banking covenants for the foreseeable future. In arriving at their conclusion that the Group has adequate financial resources, the directors were mindful of the level of borrowings and facilities and that the Group has a robust policy towards liquidity and cash flow management.

Accordingly the directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future and consequently the directors continue to apply the going concern basis in the preparation of the financial statements.

Responsibility Statement

The directors confirm that to the best of their knowledge:

• the interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union;

• the financial highlights, performance review and interim financial information include a fair review of the information required by DTR 4.2.7R (indication of important events during the first 26 weeks and description of principal risks and uncertainties for the remaining 26 weeks of the year); and

• the financial highlights and performance review includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

At the date of this statement, the directors are those listed in the Group's 2016-17 Annual Report and Accounts, with the exception of Baroness Morgan of Huyton and Tim How who resigned on 7 September 2017.

By order of the Board

Sebastian James

Group Chief Executive

12 December 2017

Humphrey Singer

Group Finance Director

12 December 2017

Independent review report

To Dixons Carphone plc

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim statement for the 26 weeks ended 28 October 2017 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes 1 to 13. We have read the other information contained in the interim statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The interim statement, including the condensed set of financial statements contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim statement in accordance with the Disclosure and Transparency Rules of the UK Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim statement has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" (IAS 34) as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim statement based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed set of financial statements in the interim statement for the 26 weeks ended 28 October 2017 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the European Union and the Disclosure and Transparency Rules of the UK Financial Conduct Authority.

Deloitte LLP

Statutory Auditor

London, UK

12 December 2017

Retail store data

Number of stores

	28 October 2017			29 April 2017
	Own stores	Franchise stores	Total	Own stores	Franchise stores	Total

UK Dixons	322	-	322	330	-	330
UK Dixons Travel	28	-	28	25	-	25
Ireland Dixons	19	-	19	20	-	20
UK Carphone	674	-	674	687	-	687
Ireland Carphone	74	-	74	86	-	86
Total UK & Ireland	1,117	-	1,117	1,148	-	1,148

Norway	83	63	146	78	63	141
Sweden	112	52	164	111	51	162
Denmark	37	-	37	39	-	39
Finland	21	18	39	21	17	38
Other Nordics	-	13	13	-	13	13
Nordics	253	146	399	249	144	393

Greece	68	26	94	68	26	94
Greece	68	26	94	68	26	94

Total	1,438	172	1,610	1,465	170	1,635

Selling space '000 sq ft

	28 October 2017			29 April 2017
	Own stores	Franchise stores	Total	Own stores	Franchise stores	Total

UK Dixons	5,657	-	5,657	5,722	-	5,722
UK Dixons Travel	36	-	36	35	-	35
Ireland Dixons	217	-	217	227	-	227
UK Carphone	573	-	573	580	-	580
Ireland Carphone	44	-	44	46	-	46
Total UK & Ireland	6,527	-	6,527	6,610	-	6,610

Norway	1,215	588	1,803	1,198	602	1,800
Sweden	1,294	320	1,614	1,302	312	1,614
Denmark	664	-	664	681	-	681
Finland	540	153	693	540	142	682
Other Nordics	-	87	87	-	87	87
Nordics	3,713	1,148	4,861	3,721	1,143	4,864

Greece	843	107	950	846	108	954

Total	11,083	1,255	12,338	11,177	1,251	12,428

Glossary and definitions

Alternative performance measures ('APMs')

In the reporting of financial information, the Group uses certain measures that are not required under IFRS. We consider that these additional measures (commonly referred to as 'alternative performance measures') provide additional information on the performance of the business and trends to shareholders. These measures are consistent with those used internally, and are considered critical to understanding the financial performance and financial health of the Group. APMs are also used to enhance the comparability of information between reporting periods, by adjusting for non-recurring or items considered to be distortive on trading performance which may affect IFRS measures, to aid the user in understanding the Group's performance. These alternative performance measures may not be directly comparable with other similarly titled measures or 'adjusted' revenue or profit measures used by other companies, and are not intended to be a substitute for, or superior to, IFRS measures.

Headline and non-headline measures

The Group's income statement and segmental analysis identify separately headline performance and non-headline items. Headline performance measures reflect adjustments to total performance measures. The directors consider 'headline' performance measures to be an informative additional measure of the ongoing trading performance of the Group. Headline results are stated before non-headline items.

Non-headline items consist of the results of discontinued operations or exited / to be exited businesses, amortisation of acquisition intangibles, acquisition-related costs, any exceptional items considered sufficiently material that they distort underlying performance (such as re-organisation costs, impairment charges, property rationalisation costs and non-recurring charges), income from previously disposed operations and net pension interest costs.

Items excluded from headline results can evolve from one financial year to the next depending on the nature of exceptional items or one-off type activities. Where appropriate, for example where a business is classified as exited / to be exited, comparative information is restated accordingly.

Local currency

Some comparative performance measures are translated at constant exchange rates, called 'local currency' measures. This restates the prior period results at a common exchange rate to the current year in order to provide appropriate year-on-year movement measures without the impact of foreign exchange movements.

In response to the Guidelines on Alternative Performance Measures issues by the European Securities and Markets Authority ('ESMA'), we have provided additional information on the APMs used by the Group below.

Alternative performance measure	Closest equivalent GAAP measure	Reconciliation to IFRS measure	Definition and purpose
Revenue measures
Headline / non-headline Revenue	Revenue	See note 2, 3, and note 13 for details of restated amounts for H1 2016 / 17 and year ended 29 April 2017.	Headline revenues represent the ongoing revenues of the Group, and are adjusted to remove non-headline revenue items. In the current and restated comparative periods, this relates to the iD mobile operations in Republic of Ireland, which is classified as a 'business to be exited' and the Spanish operations disposed in the current period and are classified as discontinued operations and therefore presented in non-headline results. In addition, for the purposes of EBIT reporting, the results of the Sprint Joint Venture have been classified as a discontinued operation and therefore presented in non-headline results.
Like-for-like (LFL) % change	No direct equivalent	Not applicable	Like-for-like revenue is calculated based on headline store and internet revenue using constant exchange rates. New stores are included where they have been open for a full financial year both at the beginning and end of the financial period. Revenue from franchise stores are excluded and closed stores are excluded for any period of closure during either period. Customer support agreement, insurance and wholesale revenues along with revenue from Connected World Services and other non-retail businesses are excluded from like-for-like calculations. We consider that LFL revenue represents a useful measure of the trading performance of our underlying and ongoing store and online portfolio.
Local currency % change	Revenue compared to prior period consolidated at a constant exchange rate.	Not applicable	Reflects total revenues on a constant currency and period basis. Provides a measure of performance excluding the impact of foreign exchange rate movements.
Profit measures
Headline / non-headline profit / (loss) before tax, EBIT and profit / (loss) after tax	Profit / (loss) before interest and tax, profit / (loss) after interest and tax.	See note 2, 3 and note 13 for details of restated amounts for H1 2016 / 17 and year ended 29 April 2017.	As discussed above, the Group uses headline profit measures in order to provide a useful measure of the ongoing performance of the Group. These are adjusted from total measures to remove 'non-headline' items, the nature of which are disclosed above.
EBIT	Profit / (loss) before interest and tax	No reconciling items	Earnings before interest and tax (EBIT) is directly comparable to profit / (loss) before tax. The terminology used is consistent with that used historically and in external communications.
Other earnings measures
Headline / non-headline net finance costs	Net finance costs	See note 3	Headline net finance costs are adjusted from total finance costs to remove non-headline finance cost items. Non-headline finance costs includes the finance charge of businesses to be exited, net pension interest costs, finance income from previously disposed operations not classified as discontinued, and other exceptional items considered so one-off and material that they distort underlying finance costs of the Group. Under IAS 19 'Employee Benefits', the net interest charge on defined benefit pension schemes is calculated based on corporate bond yield rates at a specific date, which, as can vary over time, creates volatility in the income statement and is unrepresentative of the actual investment gains or losses made on the liabilities. Therefore this item has been removed from our headline earnings measure in order to remove this non-cash volatility.
Headline / non-headline income tax expense / (credit)	Income tax expense / (credit)	See note 3	Headline income tax expense / (credit) represents the income tax on headline earnings. Non-headline income tax expense / (credit) represents the tax on items classified as 'non-headline', either in the current year, or the current year effect of prior year tax adjustments on items previously classified as non-headline. We consider the headline income tax measures represent a useful measure of the ongoing tax charge / credit of the Group.
Headline / Total effective tax rate	No direct equivalent		The effective tax rate measures provide a useful indication of the tax rate of the Group. Headline effective tax is the rate of tax recognised on headline earnings, and total effective tax is the rate of tax recognised on total earnings.
Earnings per share measures
Headline basic EPS - continuing operations, headline diluted EPS - continuing operations, headline basic EPS - total, headline diluted EPS - total	Statutory EPS figures	See note 5	EPS measures are presented to reflect the impact of non-headline items in order to show a headline EPS figure, which reflects the headline earnings per share of the Group. We consider the headline EPS provides a useful measure of the ongoing earnings of the underlying Group.
Cash flow measures
Free cash flow	Cash generated from operations	See note 9	Free cash flow comprises cash generated from / (utilised by) continuing operations before special pension contributions, less net finance expense, less income tax paid and net capital expenditure. The directors consider that 'free cash flow' provides additional useful information to shareholders in respect of cash generation and is consistent with how business performance is measured internally.
Net debt	Cash and cash equivalents less loans and other borrowings and finance lease obligations.	See note 9	Comprises cash and cash equivalents and short term deposits, less borrowings and finance lease creditors. We consider that this provides a useful measure of the indebtedness of the Group.
Other measures
Return on Capital Employed (ROCE)	No direct equivalent	Not applicable	Calculated on a pre-tax and lease adjusted basis. The return is based on headline EBIT, adjusted to add back the interest component associated with capitalising operating lease costs. Capital employed is based on net assets including capitalised leases, but excluding goodwill, cash, tax and the defined benefit pension obligations. The calculation is performed on a moving annual total in order to best match the return on assets in a year with the assets in use during the year to generate the return. We consider this a useful measure to understand how the Group has used the capital employed during the period.

Other definitions

The following definitions may apply throughout this Interim report and the Annual Report and Accounts 2016/17 previously published:

Acquisition intangibles	Acquired intangible assets such as customer bases, brands and other intangible assets acquired through a business combination capitalised separately from goodwill. Where businesses have grown organically rather than through acquisition, there is no amortisation of acquired intangibles and therefore the non-cash amortisation charge is removed from our headline earnings measures in order to increase comparability between segments.
ADRs	American Depositary Receipts
ARPU	Average monthly revenue per user
B2B	Business to business
Best Buy	Best Buy Co., Inc. (incorporated in the United States)‌‌ and its subsidiaries and interests in joint ventures and associates
Best Buy Europe	Best Buy Europe Distributions Limited and its subsidiaries and interests in joint ventures and associates (incorporated in England & Wales)‌‌
Board	The Board of Directors of the Company
Businesses to be exited	Businesses exited or to be exited are those which the Group has exited or committed to or commenced to exit through disposal or closure but do not meet the definition of discontinued operations as stipulated by IFRS and are material to the results or operations of the Group. Comparative results in the statement of comprehensive income and the notes are restated accordingly for the impact of businesses exited or to be exited.
Carphone, Carphone Warehouse or Carphone Group	The Company or Group prior to the Merger on 6 August 2014
CGU	Cash Generating Unit
Company or the Company	Dixons Carphone plc (incorporated in England and Wales under the Act, with registered number 07105905)‌‌, whose registered office is at 1 Portal Way, London W3 6RS
CPW	The continuing business of the Carphone Group
CPW Europe	Best Buy Europe's core continuing operations
CPW Europe Acquisition	The Company's acquisition of Best Buy's interest in CPW Europe, which completed on 26 June 2013
CWS	The Connected World Services division of the Company
Dixons or Dixons Retail	Dixons Retail Holdings Limited and its subsidiary companies
Dixons Carphone or Group	The Company, its subsidiaries, interests in joint ventures and other investments
Dixons Retail Merger or Merger	The all-share merger of Dixons Retail plc and Carphone Warehouse plc which occurred on 6 August 2014
EBT	Employee benefit trust
Electricals	Represents sales made from the legacy Dixons brands

HMRC	Her Majesty's Revenue and Customs
honeybee	honeybee is our proprietary IT software, developed in-house initially to serve our mobile phone consumers. It is a unique omni-channel, multi-industry software that simplifies the delivery and management of complex digital customer journeys.
IFRS	International Financial Reporting Standards as adopted by the European Union
Market position	Ranking against competitors in the electrical and mobile retail market, measured by market share. Market share is measured for each of the Group's markets by comparing data for revenue or volume of units sold relative to similar metrics for competitors in the same market
MNO	Mobile network operator
Mobile	Represents sales made from legacy Carphone brands
MVNO	Mobile virtual network operator
NPS	Net Promoter Score, a rating used by the Group to measure customers' likelihood to recommend its operations
RCF	Revolving credit facility
Sharesave or SAYE	Save as you earn share scheme
SIMO	Sales of SIM-only contracts, without attached handset
Sprint JV	The 50% investment held by the Group in Sprint Connect LLC, a distribution joint venture held with Sprint LLC in the USA.
SWAS	Stores-within-a-store
TSR	Total shareholder return
WAEP	Weighted average exercise price

This information is provided by RNS

The company news service from the London Stock Exchange

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