Dixons Carphone reveals flat revenue growth following data breach
Dixons Carphone said it has avoided a loss in its latest trading period, following a cyber attack that saw up to 10m customer records hacked.
The figures
The electricals retailer said both UK & Ireland and group revenue was flat for the three months to the end of July in a trading update for its first quarter, though group online revenue rose 13 per cent.
While electrical sales in the UK and Ireland were unmoved, mobile like-for-like sales fell one per cent due to a reduction in postpay deals, though Dixons said it’s confident of maintaining its market-topping position thanks to continued gains in SIM-only and SIM-free deals.
Revenue in Greece was a bright spot in the trading update, with like-for-likes up nine per cent while revenue in the Nordics remained flat.
Full year guidance for pre-tax profits remains unchanged at £300m, after tumbling by a quarter to hit £382m for its last full year.
Why it’s important
The trading update comes after Dixons Carphone copped to a huge historic data breach in June that affected 10m customer records – almost 9m more than the company initially reported.
The revelation of the breach, which also saw hackers access 5.9m customers’ cards, precipitated a 24 per cent drop in profits for its full-year results outlined in June. Unchanged guidance for this financial year means profits will have taken another hit.
Meanwhile the firm is adapting to a new high street market for mobile phones, with consumers seeking more SIM-only deals.
Ernest Doku, mobiles expert at uSwitch.com, said that this changing market is a greater threat than how Dixons recovers from its data breach.
“Dixon Carphone’s modest Q1 results mask an uncomfortable truth that the retailer is having to adapt to a rapidly changing sector,” he said.
“The mobile market is changing with massive growth in the SIM-only end of the market indicating that customers are increasingly seeking out flexibility in their mobile packages.
“Carphone has previously monopolised on consumer hunger for the latest handsets. That model is looking increasingly old-hat – any approach to fixing these legacy issues at the retailer will have to be comprehensive to take advantage of this shifting playing field.”
What Dixons Carphone said
Alex Baldock, group chief executive, said:
“First quarter performance was in line with expectations. We’ve maintained or grown our leading market positions, and our full year PBT guidance of around £300m remains unchanged.
We’ve made good progress in setting a clear long-term direction for the business, one that sharpens our focus on the core, and that better joins up both our offer to customers and our business behind the scenes. I look forward to giving a fuller update on our plans and progress in December.”