Dixons profit dives 60pc as mobile phone sales dwindle

DIXONS Carphone bosses said they were on track to turn the business around – after posting a 60pc fall in half-year profits.

Shares rose 7pc despite underlying profit plunging from £60m a year ago to £24m in the six months to the end of October. The electricals retailer has been dragged down by its suffering mobile division, Carphone Warehouse, where revenues fell by almost a fifth in the first half when compared with the same period last year.

The slump has been caused by customers replacing their handsets less often, while fewer people have been upgrading to the most expensive models, such as the £69-a-month Apple iPhone xs Max.

The managed decline of the mobile business will continue until 2022 when it will return to profit, chief executive Alex Baldock said yesterday.

Sales of electrical items such as computers, gaming consoles and fridges were flat, outperforming the overall market that has fallen 3pc. Baldock, who joined the firm in April last year, has embarked on an investment programme to allow customers to try products in stores at ‘experience stations’.

Baldock said: ‘in a tough UK electricals market, we’ve gained significant share and strengthened our market leadership.

‘ Mobile is challenging, as expected. As promised this will be the “trough year” for mobile losses and it will be break-even by 2022.’

Total revenue dipped 4pc to £4.7bn overall. On a like-for-like basis it was down 1pc.

Online growth was robust, increasing by 11pc.

John Moore, senior investment manager at Brewin Dolphin, said: ‘There is undoubtedly a tough period ahead for Dixons Carphone, and an increasingly difficult retail environment will be of little help, but it seems that the company will be a survivor where others may not.’

Shares yesterday closed up 7pc, or 9.3p, at 141.25p.