Dixons Carphone reports profit slump

Dixons Carphone is budgeting for a further contraction in the UK electricals market

Electricals retailer Dixons Carphone has reported a '‹sharp fall in profits and warned that they '‹'‹will fall again in the year ahead.

The firm saw profits slump 24 per cent to £382m in the year to April 28.

The retailer's results come a week after it revealed a major cyber attack.

Alex Baldock, chief executive of Dixons Carphone, said the company had "plenty of work to do" in the wake of the attack, which saw 5.9 million customer bank card details and 1.2 million personal data records hacked.

Dixons said profits for 2018-19 would be £300m, representing a fall of 22 per cent.

The group revealed plans to close nearly 100 stores last month and warned over the expected profits hit for the new financial year as it braces for a slowdown in the UK electricals market and cost increases from the national living wage and IT depreciation.

The group, which trades as Currys PC World and Carphone Warehouse in the UK, said revenue rose 3 per cent to £10.5bn and the full-year dividend was maintained at 11.24p.

Mr Baldock said the business is suffering from under-investment in customer service.

“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 long-term prospects,” he said.

He is focusing on recovering gross margins in UK electricals and on stabilising the performance in mobile phones through improvements to its proposition and more favourable agreements with the network operators.

The group is budgeting for a further contraction in the UK electricals market in 2018-19 and a further decline in the postpay mobile phone market. It plans to close 92 Carphone Warehouse standalone stores this year.