Dixons Carphone profits plunge as warning issued on soaring mobile phone prices
DIXONS CARPHONE has warned over profits as the soaring cost of new mobile phones has led to people holding on to older models for longer.
Dixons Carphone has warned over profits as prices continue to increase on new mobile phones
In an unscheduled trading update for the 13 weeks to July 29, the electricals giant bemoaned "challenging conditions in the UK mobile phone market".
Boss Seb James said: "Over the last few months we have seen a more challenging UK post-pay mobile phone market.
Dixons Carphone owns Carphone Warehouse, Currys and PC World.
"Currency fluctuations have meant that handsets have become more expensive whilst technical innovation has been more incremental."
As a consequence, we have seen an increased number of people hold on to their phones for longer, and while it is too early to say whether important upcoming handset launches or the natural life cycle of phones will reverse this trend, we now believe it is prudent to plan on the basis that the overall market demand will not correct itself this year."
Price increases has led to people holding on to older models for longer
Over the last few months we have seen a more challenging UK post-pay mobile phone market
Dixons Carphone now expects headline pre-tax profit for the full year to be in the range of £360 million to £440 million.
This is down from analyst forecasts of between £460 million and £485 million and well below the £501 million booked last year.
Dixons Carphone said it would take a £10-40 million hit from changes to EU roaming legislation
Dixons Carphone also said it would take a £10 million to £40 million hit from changes to EU roaming legislation.