- Share price dropped 30 per cent
- Punters not buying phones
- Market over-reacts, chairman pumps in £100,000
UK mobile retailer, Dixons Carphone, has ended the week suffering a 30 per cent plunge in its share price in the wake of a profits warning. The company told shareholders that it had been hit by a perfect storm: customers holding onto their phones for longer (implication: worries about Brexit) a pound devalued by around 20 per cent, pushing up the price of new handsets, and even losses from the supposed end of roaming charges. On top of all that there had been no phones coming onto the market with demonstrable ‘must have’ features and, as a result, users had been holding off on new purchases and new contracts.
All this had conspired to murk up the financial outlook for the retailer which now expected its yearly profits to end up between £360 to £440 million this year, down from £501 million last year. Dixons Carphone was expected to come in with £495 million.
However, the company also stressed that it expects that the launch of the Apple iPhone 8, due next month, will bring the customers back into their shops, waving their plastic cards.
The Financial Times reports that, in a brave show of confidence that the blip is a temporary, Dixon Carphone’s chairman has just bought £100,000 worth of shares, doubling his stake.