CONSUMER CHANGE

Nearly 20 per cent was slashed from the value of Dixons Carphone yesterday when the embattled retailer gave warning that profits were set to plunge by a fifth this year.

Amid a continuing tough market for selling mobile phones and electrical goods, Dixons Carphone put the City on notice that headline pre-tax profit for the 2018/19 financial year would be about £300 million.

That is 21 per cent below the £382m that it is forecasting for the 12 months to 28 April, 2018, which is well down on £501m in 2016/17, and short of retail analysts’ current consensus forecast of £387m for 2018/19.

Alex Baldock, who replaced the long-standing Seb James as Dixons Carphone’s chief executive earlier this year, said he was to fight back against the headwinds on the high street by putting the shutters up at 92 Carphone Warehouse stores this year.

The company has partly blamed problems at its ailing mobile phone unit on changing customer behaviour, as cash-strapped consumers are holding on to older phones

0 Dixons Carphone joins the likes of M&S and Mothercare in closing stores

GEORGE SALMON, ANALYST for longer and going sim-only, which has hit sales and profits.

Baldock said: “Right now, with our international business in good shape, we’re focusing early action on the UK.

“In electricals, we’re focused on gross margin recovery. In mobile, we’re stabilising our performance through improvements to our proposition and network agreements.

“In both, we’ll work hard to improve our cost efficiency. We won’t tolerate our current performance in mobile, or as a group. We know we can do a lot better.”

Dixons Carphone added that total revenue rose 3 per cent in the year to 16 April, while like-for-like sales were up 4 per cent.

In the UK, comparable revenue grew 2 per cent, but growth slowed to 1 per cent in the fourth quarter.

There were improved sales in the international division, with same-floorspace sales in the Nordics up 9 per cent in the year and Greece up 11 per cent.

George Salmon, equity analyst

“Sales are vanity, but profit is sanity sums up the issues at Dixons Carphone just now”