Dec 13, 2017

Dixons Carphone: monthly ailments

The name Dixons Carphone dates back to the time when "Mobile" phones were so bulky they had to be installed in vehicles. On Wednesday, the company reported half-year pre-tax profits less than half last year's level, and nudged the top end of its full-year forecast down by £40m. It will restructure its UK mobile phone business model to make it more profitable. Traditionally, mobile phone retailers doled out handsets for free and recouped the cost over one or two years - effectively extending finance to mobile networks. The retailer is right to question why it should continue to shoulder £1bn of receivables each year on behalf of bigger companies with lower finance costs. Mobile is only one part of the business; the rest is electricals retailing, where Dixons has a 25 per cent UK market share and where things are going fine.

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