Dixons sales up but tumbles into the red

Electrical retailer Dixons' first half figures reflected the European economic divide as sales grew in the North, but took a hit in Southern countries.

Electrical retailer Dixons' first half figures reflected the European economic divide as sales grew in the North, but took a hit in Southern countries.

A rise in takings was helped by the UK and Ireland division, which saw first half profits for the first time since 2007.

The group posted total sales of of £3.29bn over the period, up 4% on a constant currency basis.

But the company still fell into the red, reporting pre-tax losses of £22.2m and a basic loss per share of 2.5p.

This was due to faltering sales in Southern Europe, a big hit from its struggling e-commerce firm PIXmania, as well as losses on property.

Sebastian James, the group's Chief Executive, said he was cautiously optimistic abut the outlook.

"It is increasingly clear in each of our markets that our service-based, multi-channel business model is what customers want," he said.

"We are outpacing our competitors, and have seen Comet enter administration in the UK and Expert exiting the market in Sweden."

The firm's UK & Ireland division returned to first half profitability for the first time in five years.

Total sales there were up slightly to £1.59bn, with like-for-like sales up 3% in the half.

Underlying operating profit for the first half improved by £11.6m to £5.6m.

Dixons said here might be some disruption while Comet, which recently fell in administration, completed the 'fire-sale' of its stock in the short term.

However, it added that Currys and PC World would benefit from the consolidation.

Computing continued to be driven by tablets, the firm said, while televisions showed modest growth especially in large screen TVs.

Like-for-like sales in Northern Europe were up 11% to £1.1bn, contrasting with Southern countries, where sales were down 9% to £394.8m.

PIXmania saw life-for-like sales drop 7% to £198.3m and the firm said it had taken day-to-day control from the management and was imposing 'decisive actions' to improve its performance.

"Given the longer term outlook for PIXmania and the markets in which it operates, it is considered prudent to take a more conservative stance regarding the prospects for this business by fully impairing the PIXmania acquisition goodwill by £45.2m," the firm said.

Recommended

Share tips of the week - 12 August
Share tips

Share tips of the week - 12 August

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
12 Aug 2022
Britain’s ten most-hated shares – w/e 9 August
Stocks and shares

Britain’s ten most-hated shares – w/e 9 August

Rupert Hargreaves looks at Britain's ten most-hated shares, and what short-sellers are looking at now.
10 Aug 2022
Aviva: One for income investors to tuck away
Share tips

Aviva: One for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. R…
10 Aug 2022
Director dealings w/e 5 August: what company insiders are buying and selling
Stocks and shares

Director dealings w/e 5 August: what company insiders are buying and selling

Directors’ share dealings can often give investors an insight into the sentiment of company insiders. Here are some of the biggest deals by company di…
9 Aug 2022

Most Popular