Sales of tablet computers are booming, electricals retailer Dixons has said, underpinning profit growth and offsetting weak markets in debt-squeezed southern Europe.

Profits in Britain, Ireland and northern Europe rose 39% and 6% respectively, while in the southern Europe division - where losses narrowed - the firm was "hunkering down while the storm passes."

Underlying group sales increased 4% to £8.2 billion, though gross margin fell 0.7%, reflecting a higher proportion of sales with lower margins.

Dixons did, however, book restructuring and impairment charges of £168.8 million, relating mainly to its struggling PIXmania internet operation and the disposal of its Equanet business.

Taking these into account the firm slightly narrowed its pretax loss to £115.3 million. Dixons has said it wants to sell or close PIXmania.

The strong performance was boosted by triple-digit growth in tablet sales over the year in Britain and Chief Executive Sebastian James forecast "another big tablet Christmas."

"Less than a third of UK households now have a tablet and we also think these are personal devices so there's lots of road left in this particular product," James told reporters.

"And there's going to be some further product innovation as these tablets get thinner and lighter and more powerful," he said after Dixons beat guidance with a 15% rise in underlying profit for the year to 30 April.

The most popular lines are the Apple iPad, the Samsung Galaxy and the Google Nexus.

Across Europe many store groups are struggling as efforts to bring down national debt crush consumers' disposable incomes.

Electrical retailers have been particularly exposed because they sell discretionary goods under cut-price competition from supermarkets and internet retailers such as Amazon.

However, Dixons, which trades as Currys and PC World, has benefited from the demise of rivals and the partial exit of Jessops and HMV.

It has also been cutting costs, revamping stores and seeking to improve products, prices and service.

While Mr James cautioned against extrapolating fourth quarter like-for-like sales growth of 13% into the 2013-14 year, he said the firm had "got some momentum."

Shares in Dixons, which have more than trebled in the past year, were up 2% at 43.1p this morning, valuing the business at £1.57 billion.

The group ended the year with net cash of £42.1 million versus net debt of £104 million at the start of the year, an outcome Mr James said was "an important psychological milestone in our transition from survivor to winner."

However Finance Director Humphrey Singer said it was too soon to talk about resuming dividend payments.

"We need to focus on sorting out some of the strategic challenges we have first and once we've got clarity on that then we'll turn to the question of the balance sheet, which includes not just dividends but repaying outstanding bonds," he said.