Pre-tax profits slumped to £61m in its interim results
In its results for the six months to the end of October, retailer Dixons Carphone stated that its pre-tax profits slumped to £61m from £154m as the market is proving “difficult”.
The late launch of the iPhone X, which fell outside this half-year for the company, also hit growth, it said. Like-for-like mobile sales fell by 3 per cent.
CEO Seb James said: “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.”
“The start to peak trading has gone well with sales records being broken in all territories. Everywhere, we have seen material share gain and this shows that our retail businesses continue to be able to entice customers into buying the amazing new technologies that we offer. We must remember, though, that there is plenty of peak left to go.”
Follwing this announcement today, James added how they have a high cost base and we need to address that, and we always look at our store estate.
“With over 700 Carphone stores in a total estate in excess of 1,000 across the group, there is ample opportunity to rationalise the Carphone estate and improve profitability in mobile while still retaining a dominant market position. Indeed with the stock trading at such low multiples, as far as the investment case goes one could easily argue that size of the store estate is really an opportunity rather than a problem.”
Shares rose over 4 per cent to 174.2p.