Dixons sig­nals cau­tion over re­vival of phone busi­ness

The Daily Telegraph - Business - - Business - By Si­mon Foy

AN­NUAL prof­its more than halved at elec­tri­cals re­tailer Dixons Car­phone af­ter the lock­down led to slump­ing sales at its mo­bile phone divi­sion.

The FTSE 250 com­pany scrapped its fi­nal div­i­dend and warned the pan­demic would de­lay the re­turn of its phone busi­ness to prof­itabil­ity, send­ing shares down 9.36pc to 78.4p at close of trade.

The re­tailer re­ported un­der­ly­ing pre-tax prof­its of £166m for the year to May, com­pared to £339m for the pre­vi­ous year. On a statu­tory ba­sis, it posted nar­row­ing pre-tax losses of £140m, down from losses of £259m the year be­fore. Dixons did not is­sue an out­look and said it would re­view its fu­ture div­i­dend pay­outs.

It said sales of elec­tri­cal goods re­mained ro­bust dur­ing the lock­down as con­sumers moved on­line to pur­chase large screen TVs, and com­put­ing and gam­ing equip­ment.

Alex Bal­dock, Dixons’ chief ex­ec­u­tive, said: “Since the year end, all our elec­tri­cals busi­nesses have con­tin­ued to grow sales. Where our stores have re­opened we’ve per­formed well, while con­tin­u­ing to see strong on­line sales growth.

“That said, we ex­pect a weak­en­ing of con­sumer spend­ing later this year and are be­ing cau­tious in our plan­ning.”

Mean­while, its mo­bile phone divi­sion made a worse than ex­pected loss, with the com­pany say­ing the divi­sion would per­form “slightly” worse than fore­cast in the cur­rent year.

Dixons de­cided to close its stand­alone Car­phone Ware­house stores ear­lier this year, be­fore the shut­down, with the loss of 3,000 jobs.

Yes­ter­day it said the unit would take an ex­tra six to 12 months to break even than pre­vi­ously an­tic­i­pated.

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