The gods of mobile sales continue to frown on Dixons Carphone as the loss-making unit reported another quarter of shrinkage.
In a trading update for the 13 weeks ended 27 July – Dixons’ Q1 – the group as a whole reported flat revenue as gains in the Nordics, Greece and the UK & Ireland electrical unit were wiped out by mobile.
“The Mobile market is as challenging as expected, underlining the need for the decisive actions that we set out in June,” said Dixons group chief exec Alex Baldock.
Early in the summer, Dixons said it had renegotiated legacy network contacts; sped up the integration of the Mobile and Electrical unit; and will move all operations onto a single IT platform. Of course, Dixons is also in the process of closing 92 Carphone stores.
The upshot of all this activity is designed to return the Mobile business to profitability within two years.
Dixons isn’t alone in facing tougher times: global smartphone sales are forecast to decline this year, and so far only Samsung and to a lesser extent Huawei (due to its strength in China) look set to buck this trend.
Back to the trading update, Electricals were up 3 per cent year-on-year but UK & Ireland Mobile was down 10 per cent. Actual quarterly revenue values were not outlined in the filing to the London Stock Exchange.
Baldock said its “long-term transformation” to beef up credit facilities, improve customers’ online shopping experience and widen its services would “help make us a much more sustainable valuable business”.
It might not just be mobile that sucker-punches Dixons in fiscal ’20. It said the “current political and economic climate is volatile but, assuming no material disruption from that, we stand by our full-year guidance”.
No, we don’t expect much disruption either. None at all. ®