13th Jun 2018 11:21
LONDON (Alliance News) - Shares in Dixons Carphone PLC were lower on Wednesday after the mobile phone and electrical goods retailer admitted to a data breach of its payment processing systems.
Dixons Carphone shares were down 3.8% at 190.30 pence, the second worst performer in the FTSE 250.
Dixons Carphone said on Wednesday it added extra security measures and engaged with cyber security experts after hackers attempted to gain unauthorised access to its systems and data.
The company said there was an attempt to compromise 5.9 million bank cards in one of the processing systems of its Currys PC World and Dixons Travel stores. In addition, 1.2 million records containing non-financial personal data, such as names, residential addresses and email address, were also accessed.
Although the company's investigation found no evidence that personal information left its systems or resulted in any fraud at this stage.
"We are extremely disappointed and sorry for any upset this may cause. The protection of our data has to be at the heart of our business, and we've fallen short here. We've taken action to close off this unauthorised access and though we have currently no evidence of fraud as a result of these incidents, we are taking this extremely seriously," said Chief Executive Officer Alex Baldock.
The breach comes shortly after the General Data Protection Regulation (GDPR) came into force at the end of May, designed to give people more control over what personal data companies can collect.
"In this data-fuelled world where we're happy to entrust data to companies it has become a valuable commodity, as much for targeted advertising as for fraudsters. In which case we should be able to assume it is held securely. Very securely," noted Accendo Markets analyst Mike Van Dulken.
AJ Bell's Russ Mould said the hacking attempt could be damaging to the prospects of the business and undermine consumer confidence.
"The fact this only came to light now thanks to a review of the company's systems and data and actually occurred in 2017 is also cause for some concern," Mould said.
Last month, Dixons Carphone said it would close 92 Carphone Warehouse standalone stores in the UK this year in the wake of a profit warning.
The group said it expects to report pretax profit for the year that ended April 28 of approximately GBP382 million, down 24% from GBP501 million the year before.
For the year ahead, headline pretax profit is expected to decline to "around" GBP300 million. This fall includes "early, necessary action" to correct recent under investment in its customer proposition, with market and contractual pressures in UK Mobile to be partially offset by cost improvements.
"Having successfully reset expectations for the group with a profit warning in May, albeit at a cost to the share price, new chief executive Alex Baldock is under pressure to deliver. If this news leads to a further deterioration in the trading outlook, the market is likely to be unforgiving," Mould added.
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