* First half profit up 19 pct to 144 mln pounds
* Has not seen any impact on consumer demand from Brexit
* Planning for more uncertain times "just in case"
* Higher prices seen as risk, shares down 29 pct this year
(Adds finance chief's comments, updates shares)
By James Davey
LONDON, Dec 14 Dixons Carphone, Britain's
largest electricals and mobile phone retailer, is planning for
tougher times after the group beat forecasts with a 19 percent
rise in first-half profit.
The company has had a strong run of earnings so far in 2016,
but its shares have fallen 30 percent, reflecting its exposure
to high-cost, big ticket goods and perceived vulnerability to
any drop in consumer spending.
Its shares had risen ahead of the results and were up
initially on Wednesday before dropping sharply. They were nearly
7 percent down by 1200 GMT, making them the biggest fallers in
the FTSE 100 index.
Analysts said Dixons Carphone's performance was not strong
enough to justify a boost to earnings forecasts.
"The shares have had a good run (this week) and a lack of
upgrades today has led to profit-taking," independent retail
analyst Nick Bubb said.
Analysts also fear many retailers may have to raise prices
next year as a slide in sterling after the Brexit vote has
increased import costs, potentially squeezing consumer demand.
Dixons Carphone, which trades as Currys, PC World and
Carphone Warehouse in Britain and Ireland, said it had still not
seen any effect on trade in its home market as a consequence of
Britain's vote in June to leave the European Union.
It said it remained optimistic about its ability to continue
to gain market share in all its key markets, while its
investment plans had not changed because of Brexit. It also
operates the Elkjop and Elgiganten brands in Nordic countries
and Kotsovolos in Greece.
But Chief Executive Seb James said the company was planning
for the possibility of more uncertain times.
"In particular, we have been focusing on reducing our fixed
cost base, identifying areas of potential market share growth if
the world becomes a tougher place for our competitors, and
generally preparing for all eventualities - just in case," he
"We are also planning our offer so that potential currency
impacts are minimised for the customer."
Dixons Carphone's finance director Humphrey Singer said that
90 percent of its purchases are in sterling, meaning there is
not a direct pressure from exchange rate movements.
He said its suppliers, who manufacture globally, will,
however, feel currency pressure once their hedging arrangements
begin to unwind.
But he said countering that was the fact that the company
has a wide product range that tends to change a lot over time.
"So actually I'm not sure it will be very noticeable to
consumers what the price changes (will be)," he said.
Singer also pointed out that many of Dixon Carphone's
products are naturally deflationary - computer products deflate
at about 10 percent a month, while TVs deflate at about 10
percent a quarter.
Dixons Carphone made an underlying pretax profit of 144
million pounds ($182.3 million) in the 26 weeks to Oct. 29 -
ahead of analysts' average forecast of 141 million pounds.
Group revenue was 4.87 billion pounds, up 11 percent. Sales
at stores open over a year rose 4 percent, driven by a 5 percent
rise in the UK & Ireland.
Before Wednesday's update analysts were on average
forecasting an underlying pretax profit of 487 million pounds
for 2016-17, up from 447 million pounds in 2015-16.
Dixons Retail also announced it has formed a strategic
partnership with UK energy supplier SSE to provide
"connected home" services.
($1 = 0.7901 pounds)
(Editing by Keith Weir and Jane Merriman)