Dixons Carphone shares plunge 30pc

Shares in Dixons Carphone (LON:DC) slumped by almost 30 percent on Thursday after the retailer cut its profit forecasts for the year.

Shares tumbled to £1.60 after the open, the steepest in over five years. This came after the retailer announced pre-tax profit for the year to be between 360 million pounds to 440 million pounds – lower than the average predicted from analysts’ of 495 million pounds.

Dixons Carphone has blamed weak currency and consumers keeping handsets for longer. 

“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 post-pay mobile phone market. Currency fluctuations have meant that handsets have become more expensive.

“Whilst this investment will cause a shortfall in profits for our phone business we do however expect overall profit in our core retail operations to be in line with last year supported by good progress in our UK & Ireland, Nordic and Greek electrical businesses,” he added.

The electronics retailer, who owns Currys, PC World and Carphone Warehouse, has warned that the fluctuations in currency are also making new devices more expensive.

The group have also been hit by the removal of roaming fees in Europe, which has been predicted to hit Dixons Carphone by between 10 and 40 million pounds this year alone. Roaming fees had previously provided an important boost for the company.

The new iPhone 8 (NASDAQ:AAPL) and Samsung Electronics’s Galaxy Note 8 “phablet” are to be unveiled next month but Dixons Carphone has said it is too soon to tell if the new devices will reverse the trend of customers holding onto phones for too long.

“The smartphone market is now more dependent on new devices that offer something different, as users are extending their purchasing cycles and need to be enticed to make a replacement,” said research group Gartner.