By James Davey
LONDON (Reuters) - Britain's Carphone Warehouse (L:CPW) and Dixons Retail (L:DXNS) are winning over investors to a merger that will create a powerhouse in consumer electricals retailing, they said on Thursday, as they both posted big increases in annual earnings.
Last month, the two firms agreed an all-share merger to create Dixons Carphone, a company that would be worth 3.6 billion pounds ($6.1 billion) at Wednesday's closing prices and tap into the convergence of smartphones and consumer electronics in people's lives.
Shareholders will vote on the merger at meetings on July 17, with shares in Dixons Carphone due to start trading on Aug. 7. The deal would create a firm with turnover of about 12 billion pounds, 2,900 stores and 45,000 staff. The combined group is likely to enter Britain's FTSE 100 index of leading companies.
Carphone reported annual earnings up 59 percent, driven by growing sales of superfast 4G mobile broadband phones, while Dixons' profit increased 76 percent, helped by demand for tablet computers, kitchen gadgets and big-screen televisions.
Dixons, home to the Currys and PC World chains in Britain, Elkjop in Nordic countries and Kotsovolos in Greece, also said its new fiscal year had started well, with TV sales boosted by the soccer World Cup and early glimmers of a consumer recovery.
It made an underlying profit before tax of 166.2 million pounds in the year to April 30, beating company guidance of about 160 million pounds.
Carphone made headline earnings per share of 18.4 pence for the year to March 29 - in line with company guidance of 17-20 pence. It is paying a final dividend of 4 pence, making 6 pence for the year, up 20 percent.
($1 = 0.5889 British Pounds)
(Editing by Paul Sandle and Mark Potter)