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Dixons Carphone warns on profit as mobile sales hit

The owner of Carphone Warehouse and Dixons has warned that more expensive mobile phone handsets and lower EU roaming charges will hurt its profits.

Shares fell 20% after it said pre-tax profits this year would be £360m to £440m, down from £501m last year.

Dixons Carphone said customers were not upgrading their phones as frequently because handsets had risen in price.

It also predicted it would take a hit from the EU scrapping roaming charges for people using mobile phones abroad.

Chief executive Seb James said in an unscheduled statement that the market for contract mobile phones had become "more challenging" in recent months.

The fall in the pound had made handsets more expensive and innovation of phones has been "incremental", Mr James said.

"As a consequence, we have seen an increased number of people hold on to their phones for longer," he said.

He added it was too soon to say whether upcoming Samsung and iPhone handset launches would reverse the trend.

Dixons Carphone, which takes a slice of customer's phone contracts, also said it would take a hit of up to £40m from the changes to EU roaming legislation.

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