Electrical goods company DSG, which trades in Ireland as Currys and PC World, swung to a first-half loss and suspended its dividend as it grapples with the deepening consumer downturn.
"Given the current economic conditions, the outlook is uncertain for peak trading and 2009. The group has set the business conservatively to preserve cash and earnings," it said.
DSG said the economic backdrop in Ireland remains "very tough" although its operations here have performed "well relative to their competitors". The group added that its Dixons stores have been rebranded Currys in order to reduce costs.
DSG, whose store chains include Currys and PC World in Britain, Elkjop in the Nordic region and UniEuro in Italy, posted an underlying loss before tax of £29.8 million for the 24 weeks to October 18th.
This compares to analysts' forecasts of a loss of £25 million to £35 million and a year-earlier profit before tax of £52.4 million. Group sales increased 3 per cent to £3.47 billion.
Sales at stores open at least a year fell 7 per cent in the first-half, while gross profit margins were down 70 basis points.
DSG said trading conditions got worse as the second half progressed and cut its investment plans with capital expenditure for the current year cut by £30 million to £160 million.
"To preserve liquidity and to ensure the delivery of the renewal and transformation plan a dividend will not be paid in the current financial year," it said. DSG ended the first-half with net debt of £149.5 million.
"The group is compliant with the financial covenants of its banking facilities at the half-year, with 300 million pounds undrawn and available at that date," it said.
Chief Executive John Browett said the group was prioritising cash generation as well as tightly managing stock, margins and costs.
Shares in DSG, which operates 1,200 shops and online stores in 28 countries, have slumped 88 per cent over the past year, hit by the sharp fall in demand for big ticket items, worries over US rival Best Buy's entry into Europe next year and concerns over the withdrawal of credit insurance for suppliers.