Dixons Carphone shares plunge 30pc after profit warning
Shares in Britain's Dixons Carphone plunged 30pc after the retailer cut its full-year profit forecast on Thursday, blaming tougher conditions in the mobile market as customers keep their handsets longer.
The retailer said headline pretax profit for the year was expected to be in a range of £360m to £440m. Analysts had on average forecast £495m, according to Thomson Reuters data.
Dixons Carphone, which trades as Currys, PC World and Carphone Warehouse in Britain and Ireland, said currency fluctuations were also making new devices more expensive.
The shares dived 30pc to 165p by 07:25 this morning. They had already fallen by a third this year as investors feared Britain's biggest electricals retailer would suffer from the growing inflationary pressures on consumers.
The group has also been hit by the removal of roaming fees in Europe which had previously provided a boost to the company. It now expects this to have a negative impact of between £10m and £40m this year.
It had traded solidly recently and said on Thursday its electricals retailing businesses in Britain, the Nordics and Greece was performing well, with group like-for-like sales up 6pc in the 13 weeks to July 29, its first quarter.
"In all of these markets we have seen growth in revenues, market share and profitability with overall product margins remaining flat in electricals," said Chief Executive Seb James.
"However, over the last few months we have seen a more challenging UK postpay mobile phone market."
He said it was too soon to say whether upcoming handset launches would reverse the trend of people holding on to their phones for longer, and it was therefore prudent to plan on the basis that demand will not correct itself this year.
New phones coming to the market include Samsung Electronics's Galaxy Note 8 "phablet", and a widely expected 10th anniversary iPhone from U.S. rival Apple, set to be unveiled next month.