DIXONS RETAIL posted a deeper underlying first-half loss yesterday as its exposure to weak southern European economies made comparisons with last year’s World Cup-fuelled sales even tougher.
However, the £25 million underlying pretax loss it reported for the six months to October 15th was not as bad as the £30 million deficit analysts had been expecting.
Shares in the electrical goods retailer rose 11 per cent to 10.42p in early trading, recouping the losses suffered on Wednesday. As well as weak consumer confidence, Dixons said it had had to contend with strong trading figures from a year ago, when sales were buoyed by the launch of the iPad computer and football’s Fifa World Cup, which spurred TV purchases.
Sales in its UK and Ireland heartland improved in the second quarter, showing what it believed to be a market-beating like-for-like decline of 5 per cent. This partial stabilisation helped its UK and Ireland arm produce a smaller first-half loss.
The economic gloom in Greece and Italy hit Dixons’ trading in both countries, widening the loss posted by its “other international” division. The Nordic division was the only profitable arm of the group.
On a statutory basis, the company posted a pretax profit of £2.4 million thanks to a £37 million profit booked on the sale of a Swedish warehouse, although this gain was offset by £4 million of stock write-offs and repair costs linked to this summer’s riots in England.
The statutory pre-tax profit compared with an £11.4 million first-half loss a year earlier. – (Copyright The Financial Times Limited 2011)
