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Dixons Carphone shares plummet as new boss warns profits will shrink

Shares in Dixons Carphone nose-dived by more than a quarter in early trade after its new boss warned profits will slump next year as it battles a shrinking market and boosts spending on staff and marketing.
The electricals retailer said it would shut 92 Carphone Warehouse stores this year in an attempt to bolster margins in its mobile phone division, which has suffered from a decline in contract sales.
Alex Baldock, who took over from Sebastian James as chief executive eight weeks ago, hit out at the company’s previous management, saying: “Though there's plenty to fix, it's all fixable.”
Dixons Carphone, which also owns Currys PC World, said pre-tax profits for this year would come in at the top end of analyst expectations at ?382m but would drop to around ?300m in 2018/19.
The drop will be due partly to ?30m of extra spending as it takes “early, necessary action to correct recent underinvestment in our colleagues and customer proposition”.
Dixons Carphone shares plummet as new boss warns profits will shrink

Mr Baldock, previously boss of Shop Direct, said the company was “nowhere near” making the most of its strengths, adding: “Nobody is happy with our performance today.”
He added: “We won't tolerate our current performance in mobile, or as a group. We know we can do a lot better.”
The chain’s UK and Ireland revenues dipped 1pc in the year to April 28 on the back of several store closures, but sales at those that remained open were up 2pc as shoppers switched stores. 
Having plunged as much as 27pc in early trade, shares in Dixons Carphone recovered to around 190p, down 18.5pc, on Tuesday morning. 
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