Dixons Carphone stated that it has avoided a loss in the company’s most recent trading period, after a cyber attack that saw approximately 10 million customer records hacked.
In a trading update for its first quarter, the electricals retailer said that both UK & Ireland and group revenue was flat for the three months to the end of July even though the group online revenue increased by 13 percent.
While the electrical sales in the United Kingdom and Ireland were unchanged, the mobile like-for-like sales dropped by one per cent because of a reduction in postpay deals, even though Dixons said that it is confident of maintaining its market-topping position because of its continued gains in SIM-only and SIM-free deals.
The revenue in Greece was a bright spot in the trading update, with the increase in like-for-like sales by nine per cent while the revenue in the Nordics remained flat.
The full year guidance for pre-tax profits continues to be unchanged at £300m, after falling by a quarter to hit £382m for its last full year.
The trading update comes after Dixons Carphone experienced a huge historic data breach last June that affected approximately 10m customer records – nearly 9m more than the number that was initially reported by the company.
The breach also saw hackers gain access to 5.9m customers’ cards. The revelation of the breach precipitated a 24 percent decline in profits for its full-year results outlined last June. Unchanged guidance for this financial year implies that profits will have taken another hit.
Meanwhile, the company is adapting to a new high street market for mobile phones, with the consumers seeking for more SIM-only deals.
The mobiles expert at uSwitch.com, Ernest Doku, said that this changing market is a greater threat as compared to how Dixons recovers from its data breach.
He stated: “Dixon Carphone’s modest Q1 results mask an uncomfortable truth that the retailer is having to adapt to a rapidly changing sector.”
He added: “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.
He continued: “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.”
The group chief executive of the company, Alex Baldock, stated: “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.”
He added: “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.”