Dixons Carphone shares plunge 20% as company announces 92 store closures and falling profits

Company says it will take 'early, necessary action to correct recent underinvestment'.

Dixons Carphone becomes the latest in a string of retailers to announce it will close branches (Getty)

Shares in Dixons Carphone plunged more than 20 per cent on Tuesday after the company warned profits would fall sharply next year.

The mobile phone retailer said it would close 92 of 650 standalone Carphone Warehouse stores in a bid to cut costs. Profit before tax is expected to be £382m in 2017/18, sliding to £300m the following financial year.

Dixons Carphone said it would take, “early, necessary action to correct recent underinvestment in our colleagues and customer proposition”.

It said full-year group revenue would rise 3 per cent in 2017/18, with strong growth of 9 per cent in the Nordic region and 11 per cent in Greece.

“Continued contractual pressures”, would constrain its UK mobile business, the company warned, adding that it expects to take a £20m hit from mobile debtors. Hard-pressed consumers have been holding onto their phones for longer rather than upgrading, Dixons Carphone said.

New chief executive Alex Baldock said: “Eight weeks in the business have cemented my optimism about Dixons Carphone's long-term prospects. I've found exceptional strengths, and though there's plenty to fix, it's all fixable.

“We're number one in each of our markets, with people and capability no competitor can match. Our opportunity lies in making the most of those strengths, which we are nowhere near doing. And we must: nobody is happy with our performance today.

“We're getting on with it, through a new leadership team and structure that's promoted top talent, cleared away unnecessary layers and silos, and started to speed up decision-making. We're already giving new impetus to areas crucial to our transformation such as data and analytics, marketing, digital, services and technology.”

Dixons Carphone shares dropped from 233.4p to 185.25 in Tuesday morning trading.