Dixons Carphone sees big profits fall

Dixons Carphone has reported a big fall in annual profits as the retailer admitted that it had "plenty of work to do" in revamping its business.

Pre-tax profits for the year to 28 April fell to £382m, from £500m a year earlier.

The retailer is set to close 92 of its more than 700 stores this year amid slowing sales of mobile phones.

Last week, it admitted a big data breach involving millions of credit cards and data records.

It is investigating the hacking attempt, which began in July last year.

Dixons Carphone, whose main UK brands include Currys PC World and Carphone Warehouse, said it had no evidence that any of the cards had been used fraudulently following the breach.

The mobile phone and electrical goods retailer, which employs more than 42,000 people in eight countries, issued two profit warnings last year and a further one earlier this year amid a slowdown in sales of new mobile handsets.

In its latest results, the firm also reiterated that it expected profits to fall again in the current financial year, maintaining its profit guidance for 2018-19 at about £300m.

The firm's shares were up almost 4% in mid-morning trading.

Chief executive Alex Baldock, who took over earlier this year, said Dixons Carphone was "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."

He added that the retailer could make more of those strengths by "bringing clear long-term direction that sharpens our focus on our core".

On a statutory basis, Dixons Carphone's pre-tax profits for the past financial year fell to £289m, from £404m the year before.

"Dixons Carphone results, at first glance, look a touch better than feared, given the kitchen sink job done by new CEO Alex Baldock three weeks ago," said Neil Wilson, chief market analyst for Markets.com.

"In UK mobile, the company delivered flat like-for-like sales in a contracting post-pay market. But it remains the market leader, though at the cost of margins."