The Courier & Advertiser (Fife Edition)
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Retailer Dixons Carphone has posted a slump in annual profits, a week after coming clean about a major cyber attack.
The group announced underlying pre-tax profits had fallen by 24% to £382 million for the year to April 28, and warned cost pressures would hit profits once again in the year ahead.
Sales rose 4% on a like-for-like basis, with total revenue coming in at £10.5 billion. In the UK, sales were down by 1%.
Alex Baldock, the new chief executive of Dixons, said the company had “plenty of work to do” in the wake of the attack, which saw 5.9m customer bank card details and 1.2m data records hacked.
In its full-year results, the group confirmed it expects profits for 2018-19 to be £300m, a fall of 22%. The firm revealed plans to close nearly 100 stores last month and warned over an expected profits hit for the new financial year as it braces for a slowdown in the UK electricals market and operational cost increases.
Dixons’ data breach began in July last year, well before new European General Data Protection Regulation (GDPR) rules came into force last month.
This means the firm will likely escape hefty fines associated with the new regulations. Mr Baldock said: “I’m delighted to be at Dixons Carphone, in a business with so many strengths, and with so much more to go for.
“Recent events have underlined that we have plenty of work to do, and it will take time, but I’m even more confident than the day I took the job in our longterm prospects.”
Shares lifted 2% despite the annual profit woes. Richard Hunter, head of markets at interactive investor, said: “Last month’s profit warning may have removed some of the sting, but these numbers nonetheless make for some fairly grim reading. There are wider concerns regarding the sector, with phone upgrades lessening, the UK consumer potentially retrenching when considering big ticket purchases, and Dixons Carphone’s reliance on customer facing staff an additional cost burden which digital direct businesses do not face.”