Dixons narrows loss as UK leads improvement
LONDON (Reuters) - Dixons (DXNS.L), Europe's No.2 electricals retailer, narrowed its group loss for the first half of the year with strong demand for tablets and televisions pushing it to a first profit in the UK and Ireland for five years.
Dixons, home to the Currys and PC World chains in Britain, on Thursday reported an underlying pretax loss of 22.2 million pounds ($35.48 million) for the 24 weeks to October 13, ahead of expectations for a similar loss of 25.3 million made a year ago.
Shares in the group, which is expected to make a profit of around 87 million pounds for the year to end-April according to Reuters data, were down marginally at 0837 GMT.
Sales at stores open more than a year rose 3 percent in the period, driven by a strong first quarter as customers rushed to buy tablets and smart televisions before a summer of sporting events. Group sales were 3.29 billion pounds.
"I think the business is in a good position for the remainder of the year," Dixons Chief Executive Sebastian James said, adding that trading since the period had improved across the group, helped in particular by the launch of Windows 8.
In the UK and Ireland, where this month rival Comet collapsed into administration, it swung to a first-half profit of 5.6 million from a 6 million loss last year.
The demise of Comet, which had a six percent UK market share, will represent a long-term benefit to Dixons, it said, although closing down sales at Comet stores could disrupt the market in this year's key Christmas trading period.
Dixons said like-for-like sales in Northern Europe grew 11 percent led by market share gains for its Elkjop business in the Nordic countries.
Southern Europe, an austerity-hit region Dixons in June pledged to stay in, declined 9 percent with tough trading at UniEuro in Italy and Kotsovolos in Greece, as well as crowded competition in Turkey slowing growth.
The group said it had also launched an improvement plan at its loss-making PIXmania unit and wrote down the goodwill of the business with a charge of 45.2 million pounds.
European retailers have felt the effect of pressures on the consumer wallet brought on by rising prices, muted wage growth, and austerity stemming from the sovereign debt crisis, and are also battling intense competition from supermarkets and internet firms.
This month rival Darty (DRTY.L) announced plans to sell its loss-making Italian operations.
($1 = 0.6257 British pounds)
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