Retail giant Dixons Carphone saw profits drop 22 per cent year-on-year from £382m to £298m.
The group blamed the significant loss on the growing trend of consumers delaying to upgrade their mobile phone contracts.
New CEO Alex Baldock introduced new cost saving measures such as an improved focus with online purchases and customer service in December, in a bid to save £200m.
But he warned in the latest financial results ending April 27, there will be further profit drops in the coming quarters. This is the second profits warning since Baldock took charge in April last year.
Full-year dividends were slashed to 6.75p from 11.25p. Dixons Carphone’s shares dropped almost 30pc in early trading, to 91p, and later traded down 18pc at 102p.
Baldock warns there will be more “pain in the coming year” as the firm adjusts to a fast changing UK market, and that “mobile will make a significant loss”.
But he targets mobile to break even in the next two years as the firm looks to find new ways to make mobile profitable. To start, the company will launch a new 36-month credit-based bundle by next April.
The firm is also looking to renegotiate contracts with operators which demanded Dixons hit volume targets even if it made losses on connecting new customers.
Dixons Carphone owns Currys PC World and Carphone Warehouse. It now operates 560 Carphone Warehouse stores a drop from 662 a year earlier.
Compare My Mobile mobile comms expert Rob Baillie said a drastic jump in smartphone technology is the only way to get cusotmers upgrading more frequently again.
“Mobile phone users have become increasingly savvy”, he said.
“Whilst in previous years the release of a new model would’ve been enough to warrant an upgrade, they now need to witness substantial technological advancement to persuade them to splash out.
“With the launch of 5G, it’s highly likely that Dixons Carphone is banking on this industry roll out to turn things around. Even if this is the case, it might be short lived rather than a long term resolution for the retailer.”