Top Handset Vendor in the U.K. Blames Weak Pound for Profit Warning

Top Handset Vendor in the U.K. Blames Weak Pound for Profit Warning

Stakes in one of the most visible high street brands of Britain, Dixons Carphone PLC, dropped last week post the firm warned that its earnings this year might be less than anticipated. This might be hugely due to the drop in the strike since the vote to leave the European Union last year has encouraged users to keep hold of their smartphones for longer.

Last week, share cost of Dixons dropped at 1.75 Pounds to 23%, indicating that the firm now has a market capitalization of almost 2 Billion roughly ($2.6 billion). So far in 2017, the firm has lost almost a 50% of its value hugely due to Brexit-associated issues.

Top Handset Vendor in the U.K. Blames Weak Pound for Profit Warning

From Brexit vote of last year, the pound has dropped by almost 15% against its main contestants, comprising the dollar. That has put fuel on inflation by turning imports costlier, which has prompted users to take a more careful way to spending and eaten into household revenues.

In a statement, the firm claimed that it has witnessed a more confronting situation in the British handset market due to fluctuations of currency that have made phones more costly with a slower speed in tech innovation.

“As a result, we have witnessed an elevated number of users hold on to their handsets for longer and while it is too untimely to claim whether significant next phone launches or the usual life cycle of handsets will overturn this trend, we now think it is cautious to plan on the foundation that the entire market need will not accurate itself in 2017,” Seb James, the Chief executive, claimed to the media in an interview.

Dixons also claimed that the fragmenting of roaming taxes within the 28-nation EU might dent gains to the tune of 10 Million Pounds to 40 Million Pounds in 2017.

In spite of some bright marks comprising sturdy trades in the Greek and Nordic operations, the firm claimed it now anticipated that its caption pretax gain for the current fiscal year will be in the series of 360 Million Pounds to 440 Million Pounds. That is less as compared to with previous year’s equivalent of 501 Million.