Dixons Carphone DB scheme deficit rises by £109m

Retail group Dixons Carphone's defined benefit pension scheme deficit has increased by £109m year-on-year to £579m, as of 27 April 2019.

The firm stated that the deficit increase was due to “changes in the market based financial assumptions, primarily the discount and inflation rates”.

Its 2018/19 preliminary results report revealed that there were actuarial losses on the scheme totalling £107m and dividend payments totalling £116m

Contributions during the period under the terms of the deficit reduction plan amounted to £46m, with future contributions under the agreement with the trustee of £46m per year to be paid until 2028/29, with a further payment of £25m in 2029/30.

As a result of the High Court judgement in the Lloyds Banking Group case on guaranteed minimum pensions (GMP) equalisation, Dixons Carphone incurred an additional pension cost of £15m.

The report noted: "There are a number of uncertainties surrounding the change, including the method of calculation of the equalisation and any potential appeals against the ruling, therefore we consider that the amount is subject to further change, however currently represents our best estimate."

Commenting on the report, Dixons Carphone group chief executive, Alex Baldock, said: "The past year has seen us keep our promises to investors, delivering around £300 million of headline profit, resilient free cash flow, and continued growth in sales and market share in UK & Ireland electricals and international. But we know we have it in us to be a much more valuable business. That will take time. 

“Overall, with investment in our transformation underpinning UK & Ireland electricals and International growth in sales and headline profits, and accelerating the changes in mobile, we're confident to bring forward our long-term ambitions.”

The company board declared an interim dividend of 2.25p per share, which was paid on 25 January 2019.

It is proposing a final dividend of 4.50p per share. The final dividend is subject to shareholder approval at the company's forthcoming annual general meeting.

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