Dixons upbeat after trumping forecasts

Dixons has predicted a year of progress after beating trimmed-down profits expectations.

Dixons has predicted a year of progress after beating trimmed-down profits expectations.

The retailer which earlier this year said it was axing 350 head office jobs after feeling the effects of tough trading conditions, predicts expansion plans will create 2,200 new jobs in the next year, including 1,000 in the UK.

Dixons, which also owns the Currys, PC World and The Link chains, made underlying profits of £301.3 million in the year to May 3rd after a strong performance overseas helped compensate for a tough year on the UK high street.

Sales at Dixon's 14 stores in the Republic rose by 9 per cent to £61m in the year up to May 3rd.

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The company opened a Currys and a PC World in Limerick during the period.

When the effect of the new stores was stripped out, sales were 5 per cent lower, with Dixons blaming the downturn in the economy.

Dixons initially made a strong start to the year but analysts cut back profits forecasts from between £320 million and £335 million to around £297 million after the group warned that it had seen a disappointing Christmas.

At the bottom line, pre-tax profits were down from £282.3 million to £278.6 million after the cost of restructuring the UK head office pushed up exceptional charges.

But the group said it has moved quickly to tackle problems highlighted over the Christmas period.

Although the sales boost from last year's football World Cup makes current comparisons difficult, Dixons said that the new financial year had begun in line with expectations.

Predicting a "year of progress" chairman Sir John Collins said: "We remain confident in our strategy and in the Group's future growth prospects albeit with uncertainty over economic growth over the next year or two."

He also said that the group continued to co-operate with a Competition Commission investigation into extended warranties on goods.

PA