'Asleep on the job': Dixons Carphone comes under fire from shareholders

LONDON (Reuters) - Private shareholders in Dixons Carphone berated the UK-based electricals and mobile phone retailer’s board at its annual meeting on Thursday over a recent profit warning and a share price which has more than halved over the last year.

FILE PHOTO: A sign displays the logo of Dixons Carphone at the company headquarters in London, Britain August 1, 2017. REUTERS/Neil Hall /File Photo

Last month the group, which trades as Currys, PC World and Carphone Warehouse in Britain and Ireland, issued a profit alert which sent its shares tumbling by as much as 30 percent.

The firm blamed tough conditions in the mobile phones market as customers keep their handsets longer. It said the weakness of the pound since last year’s Brexit vote was also making new devices more expensive at a time when UK consumers’ real earnings are falling and the housing market is sluggish.

Ian Livingston, who succeeded Carphone Warehouse founder Charles Dunstone as Dixons Carphone’s chairman in April, began the firm’s annual shareholders’ meeting in central London with an apology.

“I’m sorry and I know how painful this (share price) decline has been for all of you,” he said, pointing out the group did report a record annual profit in June and said last month that its electricals business was continuing to trade well.

However, his contrition failed to satisfy investors, who expressed their dismay over the stock price fall.

John Farmer, a regular dissenting shareholder on Britain’s annual general meetings circuit, said the Dixons Carphone board had been “asleep on the job” in failing to see the changing nature of the mobile phones market.

“Are you not strategically at fault for failing to anticipate and react to developments which led to the profit warning?,” he asked.

“Are you really worth the money you’re paying yourselves.”

Livingston said the firm had not erred strategically, it was the victim of a tougher market for mobile phones.

He said the board was “very conscious” the performance of the phones business needed to improve and was confident that if overall group profit grew in a sustainable way the stock price would recover.

Chief Executive Seb James, who told Reuters last month he was in a state of “Zen-like-calm” about the share price, said he had discussed the Aug. 24 profit warning in detail with many of the firm’s institutional shareholders but did not comment on what their reaction was.

Shares in Dixons Carphone, which also trades as Elkjop, Elgiganten, Gigantti and Lefdal in Nordic countries and Kotsovolos in Greece, were down 0.35 percent at 172 pence at 1400 GMT, valuing the business at 2 billion pounds ($2.62 billion).

($1 = 0.7644 pounds)

Editing by Greg Mahlich