DISCLOSURE

Dixons Carphone has warned over profits as the pound’s slump has sent the cost of new mobile phones soaring, leading to people holding on to older models for longer.

Shares in the retail heavyweight slumped after it bemoaned “challenging conditions in the UK mobile phone market”.

In an unscheduled trading update spanning the 13 weeks to 29 July, chief executive Seb James told investors: “Over the last few months we have seen a more challenging UK post-pay mobile phone market.

“Currency fluctuations have meant that handsets have become more expensive whilst technical innovation has been more incremental.

“As a consequence, we have seen an increased number of people hold on to their phones for longer, and while it is too earlytosaywhetherimportant upcoming handset launches or the natural life cycle of phones will reverse this trend, we now believe it is prudent to plan on the basis that the overall market demand will not correct itself this year.”

0 The trading update showed UK like-for-like sales rose 4% in the period

“The share price has been drooping even lower in recent days, as if something was possibly amiss, so it’s good that the company has cleared the air”

RETAIL EXPERT NICK BUBB

Dixons Carphone, which owns the PC World and Currys brands, now expects headline pre-tax profit for the full year to be in the range of £360 million to £440m.

This is down from analysts’ forecasts of between £460m and £485m and shy of the £501m booked last year.

The group also said it would take a £10m to £40m hit from changes to EU roaming legislation. Mobile phone retailers take a cut of additional charges levied by telecoms firms, including roaming, but the EU’S decision to scrap roaming charges means they will now miss out.

The trading update showed that UK like-for-like sales were up 4 per cent in the period, while total sales rose 1 per cent.

Across the group, which also operates in Scandinavia and Greece, sales were up 6 per cent.

James said he was encouraged by the UK performance in light of strong comparative sales following last year’s European football championship.