Challenging year for DSG International but Irish branch prospers


26 Jun 2008

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DSG International suffered a pre-tax loss during the 12 months to May 2008 of £192.8m sterling, with the group describing the year as “challenging” and indicating cost-cutting measures are on the horizon. DSG Ireland is prospering, however, and plans to create 40 jobs in Ireland in the year ahead

DSG International suffered a pre-tax loss during the 12 months to May 2008 of £192.8m sterling, with the group describing the year as “challenging” and indicating cost-cutting measures are on the horizon. DSG Ireland is prospering, however, and plans to create 40 jobs in Ireland in the year ahead

DSG International increased group sales by 8pc to £8.54bn sterling for the year ended 3 May 2008.

The group posted an underlying pre-tax profit of £205.3m sterling, down from £295.1m sterling on the previous year, and an underlying retail profit of £201.6m sterling, down from £264.9m sterling on the previous year.

Underlying diluted earnings per share were 7.8 pence, down from 10.9 pence.

After net restructuring and business impairment charges of £389.2m sterling, total loss before tax was £192.8m sterling, down from a profit of £114.1m sterling for 2006/2007. Basic loss per share was 14.5 pence, compared with a basic earnings per share 1.8 pence for 2006/07.

As at 3 May 2008, DSG International had £779m sterling of available funding headroom and the group is proposing a final dividend of 3.43 pence for the year, down from 6.85 pence on the previous year, making total dividends for the year of 5.45 pence per share compared with a 2006/07 total dividend of 8.87 pence per share.

“The group is operating in a challenging environment,” said John Browett, chief Executive, DSG International. “We have lots of opportunities to improve performance and build on the group’s many inherent strengths as a leading specialist electrical retailer.

“We are working very hard on executing our five-point plan that will renew and transform the business over the next three years. We are revamping ranges, retraining staff, trialling new store formats, selling new services, cutting costs and simplifying the business from top to bottom.”

The economic backdrop continues to be difficult and the group remains very cautious about consumer confidence in many of the markets in which it operates. In this environment, the group’s clear priorities are focused on reducing costs further and managing cash flow, while continuing to improve customer focus.

DSG Ireland, which operates as Currys, Dixons and PC World, increased sales by 5pc during the period.

“Our 2007/08 performance reflects the current dynamics of the market and is in line with our expectations. Having built a market-leading position, we believe the Irish market continues to offer us opportunities for growth,” said Declan Ronayne, managing director, DSG Ireland.

“In 2007/08, we opened two new Currys stores in Letterkenny and Santry and currently trade from a total of 30 stores as Currys, Dixons and PC World. We plan to open a minimum of two Currys superstores in the current year, creating 40 full- and part-time positions and are evaluating other opportunities for both Currys and PC World.”

By Niall Byrne