StockMarketWire.com - Phone retailer Dixons Carphone cut its dividend and launched a turnaround plan targeting cost savings of £200m after swinging to a first-half loss on the back of asset writedowns.

The company said it would revert to the previous policy of 3 times cover for dividend, leading to a 40% reduction in the dividend this year. This would allow 'the dividend and the pension fund contributions to be at least covered by free cash flow, which we consider to be prudent,' the company said.

For the six months ended 27 October, statutory pre-tax losses were £440m compared with a profit of £54m a year earlier, and like-for-like revenue rose 2%.

The company blamed the loss on non-headline charges of £490m mainly relating to writing down the value of its mobile business.

The company said its transformation plan would target £200m of gross cost savings for 'reinvestment and margins progression,' and group earnings (EBIT) margin of at least 3.5% over 5 years.

The interim dividend was cut to 2.25p a share from 3.5p a year earlier.

'We believe that Dixons Carphone is now on the path to sustainable success,' chief executive Alex Baldock said.

'We have set a lear long-term direction that will deliver more engaged colleagues, more satisfied customers and a more valuable business for shareholders.'

'There are headwinds and uncertainty facing any business serving the UK consumer, we've had our own challenges, and our plan will take time.'

'But, with this plan, we can now see the way to unleashing the true potential of this business.'

'We believe in our plan, are underway making early progress and determined to make it a lasting success.' Story provided by StockMarketWire.com