Dixons Carphone sales fall as it moves into the red
Shares in Dixons Carphone have plunged by a quarter after it reported a full-year loss and predicted more pain for its mobile phone business this year.
The retailer lost £259m in the year to 27 April, compared with a pre-tax profit of £289m last year. Sales fell by 1% to £10.43bn.
The company added that it was set to take ‘more pain’ in the coming year amid “a deterioration in the forecast performance of the UK and Ireland mobile business”.
In December, the retailer wrote down the value of its mobile business, Carphone Warehouse.
It has been struggling with slowing sales of mobile phones, as people renew their handsets less frequently, and falling demand for long-term mobile contracts. Last year, it announced the closure of 92 of its 700 stores.
Group chief executive Alex Baldock said the UK mobile market was “changing in the way we described in December, but doing so faster”.
“So, we’re moving faster to respond.” He said the company had renegotiated all its legacy network contracts, developed a new ‘customer offer’, and was accelerating the integration of mobile and electricals into one business.
“This means taking more pain in the coming year, when mobile will make a significant loss,” he said.
“But accelerating our transformation provides certainty that this year is the trough.
“We expect mobile will at least break even within two years, and beyond that, equipped with a stronger and unconstrained offer, we will of course aim to do better.”