Shares in Britain's Dixons Carphone plunged 30 percent after the retailer cut its full-year profit forecast on Thursday (August 24), blaming tougher conditions in the mobile market as customers keep their handsets longer. Kate King reports
There are few people these days who don't own a mobile phone. But apparently, people are holding on to them for longer. Dixons Carphone says that's partly to blame - as it warned of a steep fall in profits which saw shares in the British retailer plunge 30 percent on Thursday. (SOUNDBITE) (English) MARKET ANALYST AT PEPPERSTONE, DARREN SINDEN, SAYING: " I think that they're being a little bit disingenuous. I think that these are issues that they should have been well aware of. You know the mobile phone industry is not particularly complicated. You're selling airtime and you are selling handsets. And it's a combination of the two that create your revenues and the issues that they've highlighted really I think you know consumer focus groups and market research should have identified those problems much much earlier on." The company, which also trades as Currys, PC World and Carphone Warehouse says its full-year pretax profit's now likely to be in the range of 360-440 million pounds. Analysts had forecast it to be 50 million higher. While phone users across europe celebrated the removal of roaming charges in June Dixons Carphone says it will cost them 40 million pounds. That's been compounded by a fall in sterling which increased the price of handsets by roughly 20 percent. (SOUNDBITE) (English) MARKET ANALYST AT PEPPERSTONE, DARREN SINDEN, SAYING: "Let's be clear you know the weakness in sterling is nothing new, you know the referendum was third of July last year. The pound has been give or take roughly 12 percent lower against the dollar for instance since then it's moved in a reasonably tight band. So again that can't really come as a surprise." Shares in Dixons Carphone had already fallen by a third this year - which means their value has now more than halved. It's hoping next month's launch of new handsets from Apple and Samsung, will bring customers back into the shops.