'Plenty of work to do' as Dixons Carphone profits fall 28%

Dixons Carphone (Frankfurt: CWB.F - news) has reported a 28% fall in annual profits, with its new chief executive admitting "we have plenty of work to do" as the firm battles back from a damaging hack on customer bank details.

The company, which employs more than 40,000 staff and is behind the Currys PC World and Carphone Warehouse stores in the UK and Ireland (Other OTC: IRLD - news) , said statutory pre-tax profits came in at £289m in the year to 28 April.

It pointed to a string of charges totalling £93m and hits to profit margins from discounting in the tough retail environment, especially in mobile phones where customers have been more reluctant to upgrade their devices.

But it said it had maintained its market position in its core UK and Ireland market despite revenue falling 1%.

Group revenue rose 3% - thanks mainly to strong comparable sales in its international businesses.

However, Dixons Carphone's new chief executive Alex Baldock admitted there were challenges ahead after a year that saw the firm issue a profit warning and announce plans to close 92 Carphone Warehouse stores .

Top of the to-do list will be salvaging reputation after the company's admission last week that the bank details of millions of customers had been exposed by hackers.

It marked the second such attack in three years and was of particular concern because the company believed the hackers responsible had been accessing its systems for up to a year before being spotted.

Mr Baldock, who succeeded Seb James two months ago, told investors he was confident about the firm's prospects under his direction though 2018/19 profit forecasts were downgraded because of continuing cost pressures.

He said: "We're number one, maintaining or growing share in each of our markets, with people and scale multichannel capabilities no competitor can rival.

"We can make more of these strengths, by bringing clear long-term direction that sharpens our focus on our core,
and that better joins up both our offer to customers and our business behind the scenes.

"There's nothing here that can't be done, and we expect top and bottom-line benefit of doing it.

"Our new leadership team is working at pace to set that direction, and we've taken action already to invest more in
our colleagues and the customer experience, as well as to improve our performance in the UK."

Shares (Berlin: DI6.BE - news) - down almost 40% over the past 12 months - rose by more than 3% in early trading in the wake of the results statement.

Richard Hunter, head of markets at interactive investor, said: "Last month's profit warning may have removed some of the sting, but these numbers nonetheless make for some fairly grim reading."