Dixons Carphone profits plunge 24% despite sales uptick

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Dixons Carphone update

Dixons Carphone has reported slump in annual profit, but said this was expected and that it would take time to turnaround the company’s performance in a tough market.

The trading update for the financial year ending April 28 also comes one week after the electronics giant came clean about a major cyber attack.

Dixons Carphone said underlying pre-tax profits had fallen by 24 per cent to £382 million, compared to £500 million in the 2016-17 financial year.

Despite this, like for like sales went up four per cent, with total revenue rose three per cent to £10.5 billion.

The full-year dividend was also maintained at 11.24 pence.

However, in its UK market, sales were down by one per cent and the company warned that cost pressures would hit profits once again in the year ahead.

It expects profits for 2018-19 to be £300 million, representing a fall of 22 per cent.

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

While the attack took place in July last year, it wasn’t revealed until last week.

The retailer said that while 5.8 million of the payment cards targeted were protected by chip and pin, around 105,000 non-EU cards without chip and pin protection were compromised.

Meanwhile, Dixons Carphone recently revealed plans to close nearly 100 stores thanks to a slowdown in the UK electricals market and cost increases from the national living wage and IT depreciation.

“It’s now a little over three weeks since our last trading statement, and just over two months since I joined,” Baldock said.

“I’m delighted to be at Dixons Carphone, in a business with so many strengths, and with so much more to go for.

“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.”

Dixons Carphone operates Currys PC World and Carphone Warehouse in the UK & Ireland, Elkjøp, Elgiganten, Gigantti in the Nordic countries, and Kotsovolos in Greece.

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