Dixons profits on track despite UK sales dip
Second half sales decline in slowing market
A focus on costs and margins has enabled Dixons to meet its full year forecasts despite the affects of the consumer slowdown on its UK stores.
Updating on trading for the year to April 30, Europe’s biggest specialist electricals group reported total group sales up 8 per cent across the year, with like-for-like sales up 2 per cent.
Dixons international business saw total sales up 24 per cent across the year, with like-for-likes up 1 per cent. The UK arm recorded total sales growth of 3 per cent, with like-for-likes up 2 per cent.
Across the second half of the financial year, toal group sales grew by 7 per cent, with a like-for-like decline of 1 per cent. Total international sales grew by 29 per cent, with like-for-likes up 1 per cent. In the UK, second half sales fell by 2 per cent, with like-for-likes down by a similar amount.
[img r]Currysext.jpg[/img]The company continued to gain UK market share in the UK. Currys increased like-for-like sales by 6 per cent year on year, slowing to 2 per cent in the second half. Dixons like-for-like sales were up 4 per cent in the year and up 5 per cent in the second half, but total sales declined 14 per cent following the decsion to close more than 100 stores in the first quarter.
PC World total sales were up 11 per cent, with unit sales of laptop and desktop PCs up, although sales value was affected by price deflation, with like-for-likes down 2 per cent for the full year and down 8 per cent in the second half. Total sales at The Link were up 4 per cent, with like-for-like sales up 2 per cent, but down 9 per cent in the second half with lower levels of contract sales and price reductions on prepay.
[img l]PCcity.jpg[/img]Internationally, Elkjop, PC City and Electro World all saw sales growth, while UniEuro had a disappointing year. The Greek Kotsovolos business acquired in September 2004 “is performing in line with expectations.”
John Clare, chief executive, said: “When we updated the market in November and January we cautioned that we were seeing a slowdown in consumer expenditure. We have managed our businesses accordingly and have focused on margins, costs and service.
“We have been equally unwavering in our continued focus on our customers. Against this challenging backdrop, I am pleased that the group has been able to deliver another year of progress. We expect that our full year results will be in line with current expectations.”
Dixons has also announced the closure of the 120 Hygena concessions in Currys stores, operated as a joint venture with MFI ([i]see separate article[/i])
