First-half profits at Dixons Carphone take a dive due to mobile weakness

Electrical retail giant, Dixons Carphone, has reported that the challenging market for mobile phones meant first-half profits fell by 60 per cent for the company, though it maintained its financial guidance for its full 2019-20 year.

In addition, UK and Ireland electricals revenue for the 26 October 2019 was down one per cent, while online growth in this category was up an impressive 11 per cent. The company also reported that 81 UK stores were remodelled during this period.

The group has been hurt by changes in the mobile phone market as consumers keep their handsets for longer and choose various cheaper SIM-only deals.

Dixons Carphone stuck to a forecast for adjusted pre-tax profit of around £210 million for its 2019-2020 financial year, 30 per cent lower than in 2018-19.

It made a pre-tax profit of £24 million, down from the £60 million it made in the same period last year, on mobile revenue which was down 18 per cent.

“Mobile is challenging as expected,” said CEO, Alex Baldock, in a statement. “As promised, this will be the trough year for mobile losses, and it will be break-even by 2022.

“In a tough UK Electricals market, we’ve gained significant share, and strengthened our market leadership. And we’ve taken important strides in our transformation. It’s easier for customers to shop how they want: we’re now gaining share online as well as in stores, where we are investing to create exciting, enticing stores. More customers can also afford the tech they want: we now won’t be beaten on price, and more are taking up our credit offer.

“All of us at Dixons Carphone are shareholders, and conscious that our business is still nowhere near its full potential. We’re determined to realise that potential, and confident we’re on the right path to do so.”