Dixons Carphone has reported tumbling profits amid its interim results, nearly halving over the last six months.
In the 26 weeks to October 28, pre-tax profits dropped to £61 million, down from £154 million a year prior, while group revenues edged up from £4.7 billion last year to £4.9 billion this year.
In August the company – which owns electricals retailers Carphone Warehouse and Currys PC World – issued a profit warning, cautioning investors that mobile phone sales were slowing down significantly with customers hanging onto handsets for longer.
This trend has continued, dragging down mobile sales in the first half by three per cent.
“As we said in August, the UK postpay mobile phone market is tougher, with a combination of higher handset costs and relatively incremental technology growth continuing to cause customers to hold on to their handsets for longer and some to choose a SIMO contract in the meantime,” chief executive Seb James said.
“In addition, the later launch of the iPhone X pushed some sales into the second half of our financial year
“We recognise that the performance of the mobile division needs addressing, and are taking action to adapt our model in order to cement our place in a changing world.
“We will update the market on these developments in due course, but we believe that we can, over time, reduce the complexity and capital intensity of our mobile business model, and increase the simplicity and profitability of what we do.”
Although Dixons Carphone expects full year profits to fall in line of targets between £360 million and £400 million, its stock values have been significantly damaged, dropping 52 per cent to 168p.
This values the company at around £2 billion.