Dixons Carphone challenges will take some time to overcome

It has been a difficult couple of weeks for Dixons Carphone and on the heels of a revelation of a data breach the retailer has now issued preliminary yearly results that showed a 23.6% drop in pre-tax profits.

That decline was caused largely by difficulties the firm is facing in the mobile business and in the UK the electrical business also slowed.

For the year that ended 28 April revenue increased by 4% with pre-tax profits falling from £500m to £382m. There were several reasons why the UK and Ireland business has found things challenging.

Revenue in the UK was flat and there were a list of issues that hit the numbers, including changes in the cost profile of services provided under long-term customer support agreements £24m year on year, changes in contractual terms for the sale of third party insurance contracts that totaled £22m and a further £41m from the negative impact of revaluations of network receivables.

In the positive column there was £25m generated by a finance system implementation which accelerated data reconciliation of trade balances before it was launched.

The Nordics business delivered 9% revenue growth and Greece was also strong with 11% improvements in revenues.

The Dixons Carphone Group chief executive Alex Baldock has only been in the job for two months and a matter of days and he accepted that the problems the business was facing would take time to fix.

"Recent events have underlined that we have plenty of work to do, and it will take time, but I’m even more confident than the day I took the job in our long -term prospects," he said.

"We’re number one, maintaining or growing share in each of our markets, with people and scale multichannel capabilities no competitor can rival. We can make more of these strengths, by bringing clear long - term direction that sharpens our focus on our core, and that better joins up both our offer to customers and our business behind the scenes. There’s nothing here that can’t be done, and we expect top and bottom - line benefit of doing it," he added.

The firm has already announced plans to invest more in colleagues and customer experience and it was determined to improve the performance in the UK.