Dixons Carphone has posted a slump in annual profits, a week after revealing it had been struck by a major cyber attack.
The retail group said underlying pre-tax profits fell by 24 per cent to £382million for the year to April 28, despite sales rising four per cent on a like-for-like basis.
It also warned that cost pressures would hit profits again in the year ahead.
Dixons Carphone: The firm has posted a slump in annual profits a week after revealing cyber attack
Shares in the retailer are up 3 per cent to 197p following the update, reflecting the market’s low expectations ahead of its release.
Alex Baldock, the new chief executive of Dixons, said the company has ‘plenty of work to do.’
‘It’s now a little over three weeks since our last trading statement, and just over two months since I joined, he said.
‘I’m delighted to be at Dixons Carphone, in a business with so many strengths, and with so much more to go for.’
‘Recent events have underlined that we have plenty of work to do, and it will take time, but I’m even more confident than the day I took the job in our long-term prospects.’
The company revealed plans to close 92 stores last month and warned of an expected profit hit as it braces for a slowdown in the UK electricals market and cost increases from the national living wage and IT depreciation.
Analysts at Liberum said the company is ‘in a period of transition’.
‘The new chief executive has started to take action, including realigning management and planning for significant additional investment into staff and the customer proposition, which we see as sensible,’ they said.
Richard Hunter, head of markets at interactive investor, added: ‘Last month’s profit warning may have removed some of the sting, but these numbers nonetheless make for some fairly grim reading.’
‘There are wider concerns regarding the sector, with phone upgrades lessening, the UK consumer potentially retrenching when considering big ticket purchases, and Dixons Carphone’s reliance on customer facing staff an additional cost burden which digital direct businesses do not face.’
This time a year ago, bosses at Dixons Carphone were toasting record profits and gloating that the electricals retailer was ‘well positioned to flourish’.
Last week, it revealed hackers were able to steal the bank details of 5.9million payment cards and personal data records of a further 1.2million.
The major data breach involved shoppers at Currys PC World and Dixons Travel but bosses insist there is no sign of any related fraud.
Access was also gained to non-financial personal data, such as addresses, names and email information.
It came just months after the company was fined £400,000 for a 2015 cyber attack which exposed the personal data of more than three million customers.