Dixons-Carphone turnaroud looks set ‘to take years’

By Geoff Percival

Electrical goods retail group Dixons-Carphone has said it will take years to turn around its business after reporting a near 24% slump in annual profits amid a deteriorating market.

The company last month reiterated its commitment to its Irish operations. The group operates the Currys, PC World, Carphone Warehouse and Dixons Travel retail chains.

It says its core UK and Ireland revenues rose 2%, on a like-for-like basis, in the 12 months to the end of April, while group revenues were up by 3%.

However, the company also reported pre-tax profits of £382m (€436m), almost 24% down on the £500m reported for the previous year.

Last month, the group issued a profit warning but said Ireland would not be affected by its decision to close 92 Carphone Warehouse stores this year in a cost-cutting round. It also said it will continue investing in its “three stores under one roof” offering here.

However, Dixons-Carphone has suffered this year from a deteriorating electricals market in the UK and tougher conditions in the mobile market as customers keep their handsets longer.

Adding to its problems, Dixons-Carphone revealed last week it had become the victim of a major cyber attack for the second time in three years.

“We’re certainly talking about a multi-year journey here,” said chief executive Alex Baldock, who joined the firm in April.

“At the end of that what we can point toward with some confidence is sustainable value significantly in excess of what we’re seeing at the moment.”

More than 60% of Dixons-Carphone’s revenues are generated in the UK and Ireland, with just over 30% coming from its Nordic operations and 4% generated in Greece.

“We’ve got plenty of work to do on the infrastructure of this business, improving and better joining up everything from people, process, data and technology,” said Mr Baldock, who has been critical of the group’s previous management.

Additional reporting Reuters