Dixons Carphone posted a statutory loss before tax of £259 million on Thursday, warning that UK mobile will continue to make a significant loss.
The company said that “more pain” is expected in the next year.
Shares in Dixons Carphone (LON:DC) plunged just over 18% on the announcement.
The leading multinational consumer electrical and mobile retailer and services company revealed in its preliminary results for the 12 months to 27 April that statutory loss before tax amounted to £259 million, compared to the £289 million profit it posted a year earlier.
Dixons Carphone, which employs over 42,000 people across nine countries, also said that group like-for-like revenue was up 1%.
In December of last year, the struggling retailer revealed a £440 million loss for the six months to October. Its third quarter sales posted in January increased, despite a fall in mobile sales.
“In UK mobile, the market is changing in the way we described in December, but doing so faster. So, we’re moving faster to respond: we’ve renegotiated all our legacy network contracts, we’re developing our new customer offer, and are accelerating the integration of Mobile and Electricals into one business,” Alex Baldock, Group Chief Executive, commented on the results.
“This means taking more pain in the coming year, when Mobile will make a significant loss. But accelerating our transformation provides certainty that this year is the trough, as during next year the legacy contractual constraints on our Mobile business lift, and the integration cost benefits build. We expect Mobile will at least break even within two years, and beyond that, equipped with a stronger and unconstrained offer, we will of course aim to do better. In any case, cash generation from Mobile will be strong,” the Chief Executive Continued.
The business has been struggling with a slow down in sales of mobile phones, as consumers repurchase handsets less often than before. Just last year is revealed that it would close 92 of its 700 stores.
Shares in Dixons Carphone plc (LON:DC) were trading at -18.23% as of 09:19 BST Thursday.
