Dixons sees year profit at top end of forecasts

Dixons Retail, Europe's second-biggest electrical goods retailer, said year profit would be at the top end of market expectations, with the firm benefiting from the demise of competitors and strong demand for tablet computers.

Dixons, home to the Currys and PC World chains in Britain, Elkjop in Nordic countries, UniEuro in Italy and Kotsovolos in Greece, nudged its outlook higher today after reporting sales at stores open over a year up 7 per cent in the fourth quarter to April 30th.

Like-for-like sales rose 13 per cent in the UK and Ireland, where the firm particularly benefited from the demise of rival Comet, and were up 14 per cent in northern Europe.

Those contributions were partially offset by a 5 per cent decline in the southern Europe division, made up of Italy, Greece and Turkey, where market conditions remained "extremely difficult".

Across Europe many retailers are struggling as disposable incomes are squeezed by rising prices, muted wages growth, and government austerity measures.

However, Dixons said underlying profit before tax for the 2012-13 year was expected to be at the top end of analysts' forecast range of £75-85 million.

It pointed out that non-cash defined benefit pension financing costs of £7.4 million will be reclassified as "non-underlying" meaning that the consensus range of expectations will rise to £83-93 million.

"This strong year puts Dixons in the best position it has been in for many years," said chief executive Sebastian James, highlighting the firm's year-end net cash position for the first time in a number of years and progress in the restructuring of the troubled PIXmania business. "We are enjoying the feeling of a little wind in our sails."

Reuters