Dixons boosted as UK loss narrows
Published 24/11/2011 | 08:33
CURRYS and PC World owner Dixons Retail rose above the troubles of rivals Comet and Best Buy today by posting an improved UK performance.
The company, which has 640 stores in the UK and Ireland, said pre-tax losses in the UK narrowed to £3.9 million in the 24 weeks to October 15, compared to £10.7 million last year.
While like-for-like sales were still down 8pc in the period, this was a slight improvement on the 10pc decline in the 12 weeks to July 23, as sales of white goods, laptops and tablets, such as Apple's iPad 2, held up well.
The group has been slugging it out with competitors in a battle for survival in a tough electronics market that has seen Best Buy throw in the towel in the UK and loss-making Comet sold for just £2.
But Dixons reported widened group losses of £25.3 million, compared to £6.9 million, as its international markets, which include the debt-laden economies of Greece and Italy, dragged on overall performance.
The electronics market has been among the heaviest hit by the squeeze in consumer spending, forcing store chains to put on a raft of promotions.
Dixons' shares have lost two-thirds of their value over the past two years after it shocked markets with a series of profits warnings.
But today's results were slightly ahead of expectations for a group pre-tax loss of between £29 million and £35 million.
The UK performance was hit by a one-off cost of £4 million from August's riots, which saw numerous stores damaged and looted.
Under the leadership of former Tesco executive John Browett, Dixons has focused its store overhaul programme on the most critical shops, looked to improve customer service and increased focus on controlling costs.
Matthew McEachran, an analyst at Singer Capital Markets, said the losses were £5 million better than feared.
He added: "Management remain cautious about the second half prospects, and we highlight an increased threat from Tesco in particular, but it is clear the transformation plan is winning share back."