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Dixons Carphone warns on UK uncertainty as it reports £440m loss



Dixons Carphone has reported a half-year loss of £440m, with the electricals giant counting the cost of a tough mobile phone market.

Warning of uncertainty ahead, the retailer behind Currys PC World and Carphone Warehouse also launched a shake-up designed to revive the business – with measures to bulk up its online presence, improve customer experience, and slash costs by £200m.

The company said that while it remains the number one player in its main business of selling mobile phones – which has been hit by reduced demand for new handsets – the operation was loss making and shedding market share.

Dixons Carphone also cut its half-year dividend. Shares fell 10%.

Chief executive Alex Baldock said the company’s turnaround plan puts it “on the path to sustainable success”.

However, he added: “There are headwinds and uncertainty facing any business serving the UK consumer, we’ve had our own challenges, and our plan will take time.”

Apple has launched three new iPhones in a subdued event in California
Its main business has been hit by reduced demand for new handsets

The company’s loss for the six months to 27 October – compared with a profit of £54m a year ago – was largely the result of a £490m accounting charge, mainly reflecting a write-down in the value of the Carphone Warehouse business.

Even stripping out one-off items, headline profits fell by 32% to £50m.

Dixons Carphone said its UK and Ireland mobile phone business saw flat like-for-like sales compared to the same period last year and recorded an underlying loss.

The group’s electricals business did better, with sales higher thanks to an increase in consumer electronics and strong gaming growth, but profits lower as higher margin computer sales weakened.

It also disclosed that it would take a £17m hit as a result of the cyber attack which emerged earlier this year, in which 5.9 million bank card details and 10 million personal data records were hacked.

Mr Baldock said Dixons Carphone remained committed to its store estate and has no current plans to shut more than the 102 previously outlined for closure.

The company said job losses were not expected as a result of the £200m cost-cutting exercise, with the savings due to come from efforts to merge IT systems and reduce supplier costs.

It also offered a dose of cheer to staff with plans for a share incentive award scheme which will see more than 30,000 employees given at least £1,000 in shares each over the next three years.

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