Dixons buoyed by sales rebound as firm outlines plans for growth
But UK and Irish profits dragged down by poor performance on mainland Europe
BRITISH retailer Dixons, which owns the Currys and PC World chains, has hailed a marked improvement in its sales performance in the UK and Ireland in the last quarter but said its activities on mainland Europe continue to weigh on the group.
The company said that like-for-like sales in the UK and Ireland during the final quarter of its financial year, which ended in April, rose 8pc, helped by a store revamp initiated under former chief executive John Browett, who defected to Apple earlier this year.
Underlying sales in the UK and Ireland were down 2pc to £3.83bn (€4.76bn) in the full year and 4pc lower on a like-for-like basis. Underlying operating profits rose 14.7pc to £78.8m .
The group operates 30 stores in Ireland.
Dixons said that total group underlying sales during the financial year were flat at £8.2bn, while underlying pre-tax profit fell 17pc to £70.8m.
The group's new chief executive, Sebastian James, has outlined a three-point plan to drive growth via a multichannel offering, exploiting scale across the group and building the company's share to become the market leader in Turkey, Italy and its central European businesses.
A weaker performance in southern Europe and the online Pixmania division offset gains in Britain and Northern Ireland, Dixons said.
Pixmania, which posted an underlying operating loss of £19.8m, suffered from declines in France, one of its larger markets, and supply problems with cameras following floods in Thailand and the Japanese tsunami.
The CEO said he is taking action at the business, citing a rethink on unprofitable categories and removing costs by measures such as an exit from its "glamorous Paris office".
"We have to be convinced that any improvement in trading will convert into higher profitability and at current levels the stock looks fairly valued," said Freddie George, an analyst at Seymour Pierce with a hold recommendation on the shares.
He noted that the stock had risen more than 20pc since the beginning of the week. It added 7.3pc in London yesterday. (Additional reporting Bloomberg)