Dixons Carphone shares plummeted yesterday after the retailer announced a plunge into the red.
It also warned its mobile division will remain “significantly” loss-making in the coming year.
Pre-tax losses came to £259 million for the 12 months to April 27, the company said.
This compares to profits of £289m a year earlier and includes charges of £557m which primarily relate to the changing UK mobile market.
On a headline basis, which strips these costs out, profits slumped 22% to £298m as revenue dipped 1% to £10.43 billion.
The retailer’s bosses have previously admitted they were too slow to win over online shoppers and committing to a turnaround plan as UK consumers hold on to their handsets for longer and move away from buying long contracts on mobile phones.
Dixons Carphone, which trades as Currys PC World and Carphone Warehouse in the UK and Ireland, said it would take “more pain” during the coming year, with mobile operations making a significant loss.
The company said headline pre-tax profits would decline further to about £210m in the current financial year.
However, chief executive Alex Baldock insisted this would be the lowest point before turnaround plans begin to bear fruit.
Mr Baldock added: “We expect mobile will at least break even within two years.
“Beyond that, equipped with a stronger and unconstrained offer, we will, of course, aim to do better.”
The company has renegotiated its legacy network contracts with mobile operators and is combining the mobile business with its electricals division, responding to rapid changes in the market.
Mr Baldock also pledged to accelerate parts of the turnaround, with a goal to save £200m brought forward by two years.
A target for margin improvement of at least 3.5% has also been brought forward and is now scheduled for the 2023 financial year, 12 months before originally planned.
John Moore, senior investment manager at wealth manager Brewin Dolphin, said: “There’s a lot to process in Dixons Carphone’s preliminary results.
“Having undertaken fairly dramatic changes thus far, today’s announcement sees the business undertake a massive transformation programme in its mobile division, which will lead to ballooning losses in this part of the company over the next couple of years before breaking even.
“This type of intervention is much needed; the division has weighed down Dixons Carphone in recent years and arguably eaten the cash flow and working capital benefits delivered elsewhere.
“Despite a large statutory loss, there are some positives to be taken.
“UK and Ireland electricals is holding up, the international operations appear to be doing well, the underlying business continues to be profitable and the company has remained committed to dividend payments.
“It is encouraging that management has recognised a need for significant change and is willing to take action – even if that means short term pain.”
