Dixons reports strong profits and sales
Dixons, the owner of PC World and Currys, has said its performance in the first half of its financial year has been encouraging as group like-for-like sales climbed by 6%.
In the six months to 31 October 2013, Dixons made an underlying pre-tax profit of £30.2 million compared to £14 million in the same period in the previous year. This was the group’s first underlying profit for six years. Total underlying group sales increased by 5% to £3.43 billion on a currency neutral basis.
However, these figures do not include the group's loss making Pixmania business in France or its Electroworld business in Turkey, both of which have been off-loaded by Dixons in the last few months.
In the UK and Ireland, like-for-like sales rose by 9% with underlying operating profits increasing five-fold to £31.4 million. Dixons said the strong performance had been partly driven by the continued benefit of the exit of competitors such as Comet at the end of 2012. In addition, Currys and PC World gained further market share in the period which Dixons now believes stands at approximately 23%.
The group’s Northern Europe business also performed well as like-for-like sales rose by 3%. Underlying operating profits were £45.5 million compared to £48.5 million in the same period in the prior year.
In Greece, trading was less buoyant. Like-for-like sales fell by 14% while the business made an underlying operating loss of £5.8 million. Dixons attributed the poor results to a challenging Greek economy and strong comparatives with the prior year when an unusually hot summer drove strong air conditioning sales.
During the period, Dixons launched a new high street format store in the Bluewater shopping centre in Kent and a new combined Currys PC World superstore in Aylesbury. The group said the stores were in the process of trialling a number of new retailing innovations such as mobile and flexible fittings, Showhow areas around the store, and heat map cameras to understand how customers use the store and interact with product displays.
Sebastian James, chief executive of Dixons Retail, said: "I am pleased to report that we have had a successful first half with customer satisfaction and profitability up considerably year on year. In fact, as a Group we are reporting an underlying profit for the first time in six years. The UK & Ireland, in particular, has performed very well while our Nordic business is more than holding its own in a - somewhat - more competitive market. Our Greek business continues to grow market share against some gusty headwinds.
"I am very happy that, in the last few months, we have been able to streamline the Group substantially. The transactions that we have announced with PIXmania, Unieuro and Electroworld in Turkey represent a real achievement and will leave Dixons in a leadership position in all of our major markets. Quite apart from removing a significant profit-drag on the business, these changes mean that we can really focus on new and exciting opportunities to do more for our customers and suppliers, and on working more closely to drive tangible benefits from being part of our Group."
Looking ahead, James added: “We remain cautious about the outlook for consumers in our markets; very strong trading this time last year, together with the fact that we have now annualised Comet's exit makes the second half more challenging. Nevertheless, we have had a great first half and our stores have never looked better - or had better offers for customers."
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