Electrical goods retail group Dixons-Carphone moved swiftly yesterday to underline its commitment to its Irish operations after its shares sank on the back of a group profit warning.
The group’s share price dived up to 30% after the retailer cut its full-year profit forecast, blaming tougher conditions in the mobile market as customers keep their handsets longer.
Dixons-Carphone trades as Currys, PC World and Carphone Warehouse here and in the UK. It said the weakness of sterling was also making new devices more expensive at a time when technical innovation has been limited.
A market leader in the electricals and mobile phone market in the UK, Dixons-Carphone said headline pre-tax profit for the year was expected to be in a range of £360m to £440m (€390m to €480m).
The group reported profit of £501m in the year to the end of April, and analysts had expected a similar number this year.
Chief executive Seb James said that customers were taking their time before upgrading their phones to the latest model.
“The cause of that really is that people are holding on to handsets longer, on average we are seeing four to five months longer,” he said.
Analysts said the fact the group was trading well in its electricals business, which sells more expensive items, suggested the problem had its roots in a lack of innovation in the mobile phone market.
Mark Delaney, managing director of Dixons-Carphone Ireland said that the business continues to perform strongly here, with like- for-like sales growing, “especially across consumer electrical goods”.
The Carphone Warehouse brand itself has continued to increase market share here but the Currys-PC World brand has performed “exceptionally well with increased market share in all categories,” he said.
“There are certain specific challenges facing the UK mobile market such as a weakening sterling, changing consumer purchasing habits in a less mature market and softening consumer confidence due to Brexit.
In Ireland, consumer confidence remains buoyant and we are optimistic in the ability of Currys-PC World and Carphone Warehouse to capitalise on the many opportunities that lie ahead and we continue to innovate and invest,” Mr Delaney said.
However, he offered no update on the group’s recent decision to pull out of the Irish mobile communications market by putting its iD Mobile arm up for sale.
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