Dixons Carphone profits set to fall as mobile phones market remains challenging

Dixons Carphone, the retail chain behind Currys PC World and Carphone Warehouse, is set to update the City on its turnaround plans after bosses previously admitted they had been too slow to win over online shoppers.

Chief executive Alex Buldock is expected to announce pretax profits in the year to April 30 fell about 22% to £299 million on Thursday, with revenues of about £10.6 billion – up from £10.5 billion a year earlier, according to analysts’ predictions.

The fall is expected to be put down to the costs associated with a turnaround strategy announced six months ago, along with the retailer suffering from shoppers’ habits when it comes to buying mobile phones.

Customers have significantly moved away from signing up to lengthy contracts, preferring to buy new phones outright and then signing up to sim-only deals.

It meant that mobile sales fell 7% in the six months to October 31, and are predicted to be down 5% for the final three months of the financial year.

Dixon’s Carphone is also expected to explain how negotiations with mobile phone operators are going, vowing previously to improve the terms the company is on with suppliers.

Analysts can also expect to hear plans for updating the company’s websites, at a time when even more people are buying electronics and white goods on the internet, rather than in stores.

Chris Beauchamp, chief market analyst, at IG, said: “Like competitor AO World, Dixons Carphone has seen consumers delay major purchases, or even not make them at all.

“The slightly better first-half figures reported in December have not dispelled the gloom surrounding the firm, as big companies such as Dixons Carphone suffer from the shift to online shopping for everything from phones to fridges.

“UK retailers face a major headache, and now that people are comfortable buying big-ticket items online the firm will have to keep cutting stores.”