Dixons Carphone has swung to a massive loss in its half-year report, prompting a 14 per cent drop in its shares and the retailer announcing plans to slash costs by £200 million.
The electronics chain swung to a £440 million pre-tax loss for the half-year period ending October 27, compared to profits of £54 million the same time last year.
It attributed the results to charges of £490 million, largely due to a writedown on the value of its loss-making Carphone Warehouse mobile business and store estate.
On an underlying basis, interim pre-tax profits dropped to £50 million from £73 million a year earlier.
Dixons Carphone also said it was set to see full-year costs surge to £190 million – including a £17 million hit from the cyber attack revealed in June, which saw 5.9 million bank card details and 10 million personal data records hacked last year.
Despite this, the firm announced plans for a share incentive award scheme that would see more than 30,000 employees given at least £1000 in shares each over the next three years.
Group chief executive Alex Baldock said Dixons Carphone remained committed to its store estate and there were no plans to close down more than the 102 stores already announced this financial year.
Job losses are also not expected as a result of the £200 million cost-cutting, with the savings due to come from efforts to merge IT systems and reduce supplier costs.
It comes as part of a new strategy overhaul that includes a plan to turn around the fortunes of its Carphone Warehouse fascia.
Looking ahead, Dixons Carphone expected a full-year loss from its struggling Carphone business, but was still on track for underlying profit guidance of £300 million in its 2018-19 financial year.
“There are headwinds and uncertainty facing any business serving the UK consumer, we’ve had our own challenges, and our plan will take time,” Baldock said.
“But with this plan, we can now see the way to unleashing the true potential of this business.
“We believe in our plan, are under way making early progress and determined to make it a lasting success.”