Dixons tops profit forecasts on strong UK sales

Tuesday 17 December 2013 12.09
Dixons made an underlying pretax profit of £30.2m sterling in the six months to October
Dixons made an underlying pretax profit of £30.2m sterling in the six months to October

Electric food mixers and big screen televisions will vie with laptop computers to be the stand-out sellers this Christmas, Dixons Retail, Europe's second biggest electricals retailer, said today.
              
"Everyone suddenly wants to become a chef, particularly baking," Dixons' chief executive Seb James said.

He noting the huge popularity of various cookery television shows in driving home-baking and demand for food mixers.
              
"Whilst three years ago it would have been inconceivable to buy one of these as a Christmas present they've now become one of the most popular things to give," he said.
              
James, speaking after Dixons beat forecasts with a more than doubling in first half profit, said the firm expected to sell a million tablet computers this Christmas and was also seeing robust demand for headphones and small speakers.
              
UK retailers are expected to enjoy their best growth in Christmas sales this season since the financial crisis, according to market research specialist Verdict, which forecast consumers would spend at least £2 billion more than in 2012.

But across Europe many store groups are still struggling as government efforts to bring down national debts reduce consumers' disposable incomes. Electrical retailers have been particularly exposed because they sell discretionary goods and face intense competition from supermarkets and internet players like Amazon and eBay.
              
In Britain, Dixons' biggest market, the retailer has benefited from a tablets boom, as well as the demise of major rival Comet in 2012 and problems at Jessops and HMV. It has also been cutting costs, revamping stores and seeking to improve products, prices and customer service.
              
Shares in Dixons, which trails Metro's Media-Saturn by annual sales, have increased 81% so far this year as it has increasingly focused on markets where it has a leading "multi-channel" position with a combined stores and internet business.
              
Over the last six months the firm has offloaded the loss-making e-commerce business PIXmania and operations in Turkey and partially exited Italy.
              
Dixons, home to the Currys and PC World chains in Ireland and the UK, Elkjop in Nordic countries and Kotsovolos in Greece, made an underlying pretax profit of £30.2m in the six months to the end of October. That was well ahead of analyst forecasts of £20-26m and £14m made the previous year.
              
Total underlying group sales were £3.43 billion, up 5%, while sales at stores open over a year rose 6%.
              
Like-for-like sales in the UK & Ireland increased 9% and were up 3% in northern Europe. But they fell 14% in Greece - a market James has committed to stay in.