Dixons profits up 15% boosted by strong UK performance
Electricals retailer Dixons has reported a 15% rise in its full-year pre-tax profit as good progress in its businesses in the UK, Ireland and Northern Europe offset a poorer performance in Southern Europe.
In the 52 weeks ending 28 April, underlying pre-tax profit rose to £94.5 million while like-for-like sales increased by 4%. Total underlying group sales grew by 4% to reach £8.21 billion.
In the UK and Ireland, where stores include PC World and Currys, underlying operating profit climbed 39% to £113.3 million as the business delivered improvements in stores, service, price, and generating value through better supplier partnerships. Like-for-like sales rose by 7%.
Dixons said it estimates that UK and Ireland business increased its market share to around 21% in the year, driven in part by the closure of rival electrical chain Comet.
Never Miss a Retail Update!During the first half of the year, the UK and Ireland business benefited from events such as the European football championships, the Queen’s Jubilee celebrations and the Olympic Games. A strong performance in the second half was driven by sales of tablets, TVs and white goods as well as market share gains. The business also made progress with its multi-channel offering, especially in the second half of the year when there was growth of 25%.
In the group’s Northern Europe business, which includes the Elkjøp group and the Electroworld businesses the Czech Republic and Slovakia, like-for-like sales rose 12% while underlying operating profits increased to £120.5 million from £113.7 million in the previous year.
Sebastian James, group chief executive, said: “It has been a good year for Dixons Retail with underlying profits up by 15%, and a great year in the UK and Ireland with profits up by 39%. We have returned to growth for the group as a whole, and also to a net cash position, marking an important milestone in our transition from survivor to winner. On all of our strategic priorities I am pleased with the progress we have made, even though I am, of course, impatient for us to achieve even more, even faster, particularly in focusing on markets where we are, or can be, a leader.”
In Southern Europe, where Dixons operates businesses in Italy, Greece and Turkey, the group said it put in a robust performance in what it described as difficult markets. Total sales declined by 8% to £965.6 million with an 8% fall in like-for-like sales. Underlying operating loss was £24.4 million compared to a loss of £31.3 million in the prior year.
Dixons said its Pixmania business experienced “another very difficult year”as the company was restructured to focus on key operations. Like-for-like sales declined by 24% and the business made an underlying operating loss of £31.3 million compared to £15.2 million in 2011/12.
Regarding the outlook, James added: “The economic backdrop remains tough; we will have to strive hard to keep up our momentum and will flourish only if we continue to offer ever higher levels of service, and the sharpest possible prices, no matter which channel our customers choose.
“The year ahead offers many fantastic opportunities for us and we have plans which touch every part of our business to make things better, easier and faster. I believe that many of our stores are now among the very best in the world, but I recognise that we need to make sure that the experience in our stores is completely consistent – from Truro to Tromsø; every day we must find new ways to surprise, delight and improve the lives of our customers.”
