StockMarketWire.com - Phone retailer Dixons Carphone swung to a loss and said it expected 'more pain' in its mobile segment in the year ahead as it pushes ahead with its transformation programme.

For fiscal 2019, the company reported a statutory loss before tax of £259m, compared with a profit of £289m, with group like-for-like revenue up 1%.

The loss was blamed on non-headline charges of £557m for the year, primarily asset writedowns relating to the changing UK mobile.

UK & Ireland mobile like-for-like revenue was down 4% offsetting an uptick in & Ireland electricals and International like-for-like revenue.

The company said it had accelerated plans to combat the malaise in its mobile segment, but conceded headwinds would continue into next year.

'We've renegotiated all our legacy network contracts, we're developing our new customer offer, and are accelerating the integration of Mobile and Electricals into one business.

'This means taking more pain in the coming year, when Mobile will make a significant loss. But accelerating our transformation provides certainty that this year is the trough, as during next year the legacy contractual constraints on our Mobile business lift, and the integration cost benefits build.'

But there was some reason for optimism, with the company expecting mobile to at least break even within two years.

Group headline profit before tax fell 22% to £298m, just shy of guidance of £300m.

The company proposed a final dividend of 4.50p, down from 7.75p last year, taking its full-year dividend to 6.75p, well below the 11.25p a year earlier Looking ahead, the company said it expected headline profit before tax to be around £210m in 2020, with growth thereafter as transformation benefits feed through. The full year dividend was expected to be flat year on year.

'The past year has seen us keep our promises to investors, delivering around £300 million of headline profit, resilient free cash flow, and continued growth in sales and market share in UK & Ireland electricals and International. And we've taken the first big strides in our transformation,' said Alex Baldock, Group Chief Executive.

'In UK & Ireland electricals, we expect growing sales and headline profits this year and beyond. We've made significant gains in Credit and Online - both big profitable growth opportunities for us. Early steps towards an easier customer experience have seen satisfaction scores start to rise. And we've laid important foundations for Services to make our customer relationships stickier and more valuable.'

'Overall, with investment in our transformation underpinning UK & Ireland electricals and International growth in sales and headline profits, and accelerating the changes in Mobile, we're confident to bring forward our long-term ambitions. We still commit to over £1 billion of Group free cash flow over the five year plan, but also to accelerate our £200 million cost reduction promise by two years, and our promise of at least 3.5% Group EBIT margins by a year.''



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