DSG International, Europe's second-largest electricals retailer, posted a slightly better than feared 78 per cent slump in full-year profit and said it expected trading to remain subdued.
The retailer, which operates in Ireland as Currys and PC World, said total sales at its Irish and UK operations fell 11 per cent to £4.23 billion during the 52 weeks to May 2nd.
It said the economic environment in Ireland remains “very tough”. The company rebranded its Dixons stores as Currys during the year.
"The difficult economic backdrop across Europe and subsequent impact on consumer spending ... has been well publicised. The group expects these conditions to continue through the coming year in many of its markets," said chief executive John Browett.
He said the group, which runs Currys and PC World stores in Britain, Elkjop in the Nordic region and UniEuro in Italy, was well prepared for this environment and would focus on managing costs, margins, stock turn and cashflow, alongside its store revamp plans.
DSG reduced costs by £95 million in the 2008/09 year and has identified £200 million of further cost savings over the next four years.
It said initiatives are also underway to reduce working capital by £80 million to £130 million.
DSG made a profit before tax and one-off items of £50.5 million in the year to May 2nd, compared with an average analyst forecast of £43.1 million, according to Reuters Estimates, and £225.6 million in the previous year.
After one-off charges of £190.9 million the group made a pretax loss of £140.4 million on sales down 1 per cent at £8.23 billion.
DSG ended the period with net debt of £477.5 million and had already said it would not pay a dividend.
Shares in the group have lost 34 per cent of their value over the last year, underperforming the DJ Stoxx European retail index by 23 per cent, but have risen over 50 per cent in the last three months on recovery hopes.
The stock closed yesterday at 22-1/2 pence, valuing the business at £812 million.
Last month DSG raised £311 million and renegotiated its £475 million banking facilities, strengthening its finances and enabling it to accelerate its store revamps.
Reuters