Sunday, 21 July 2019

Dixons Carphone shares hit 10 year low, as demand wanes

By Chris Kelly, Total Telecom
Friday 21 June 19

The firm has to meet challenging sales targets set by the UK's mobile network operators, or face stiff penalties

  Dixons Carphone's chief executive officer has warned that his company faces "eye watering" penalties if it fails to hit sales targets imposed by Britain's mobile network operators this year…

 

Dixons Carphone's chief executive officer has warned that his company faces "eye watering" penalties if it fails to hit sales targets imposed by Britain's mobile network operators this year. Alex Baldock, who became CEO at Dixons Carphone 14 months ago, said that declining demand for traditional mobile phone contracts was wreaking havoc with the company's business model.

“We have to stop the bleeding in mobile and stop it this year,” he told journalists from the Financial Times.

An increasing preference amongst consumers for Sim only deals, has scuppered Dixons Carphone's business model, which was leveraged on the sale of bundled handset and data contracts.

Analysts estimate that if Dixons Carphone fails to hit its sales targets this year, it could be forced to pay up to £90 million in fines.

“The penalties are so severe that we cannot miss those commitments,” he said.

“So, we have had to work harder to get those contracts away and price ever more keenly to hit those targets.”

Shares in the company fell to £9.004 per share, a near 28 per cent drop from £12.520 the previous evening, but have since settled back to around £11.085. 

 

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