Consumer electronics retailer Dixon Carphone saw profits plunge by up to 28% this morning, after posting full-year losses for the year to 27 April 2019.
Shares in the retailer, which owns Carphone Warehouse and Currys PC World, have since recovered slightly to 11% down from opening. It comes after it reported a statutory loss before tax of £259m during the period, which included non-headline charges of £557m – primarily non-cash impairments relating to the “changing UK mobile market”.
Despite the losses in profit, group like-for-like revenue was up 1%, and it also reported a 1% increase in international like-for-like revenue. UK and Ireland mobile like-for-like revenue decreased by 4% however.
CEO Alex Baldock said the UK mobile market is changing “faster” than expected, and the company has renegotiated all its legacy network contracts, developed a new customer offer, and is accelerating the integration of its mobile and electricals arms into one business. However, Baldock states this means “taking more pain in the coming year”, when “mobile will make a significant loss”.
Baldock said: “The past year has seen us keep our promises to investors, delivering around £300m of headline profit, resilient free cash flow, and continued growth in sales and market share in UK and Ireland electricals and International. And we’ve taken the first big strides in our transformation.
“But we know we have it in us to be a much more valuable business. That will take time. In December, we set out a clear strategy to help everyone enjoy amazing technology, and early progress is promising.”
He added: “I want to thank my tens of thousands of colleagues at Dixons Carphone for their unrelenting hard work. This business matters, not just to us, but to the millions of people whose lives we can improve through the power of amazing technology. So it’s with a sense of responsibility that we commit to transforming Dixons Carphone into a world class business for colleagues, customers and shareholders. We believe we will.”