UK: Currys and PC World owner Dixons on track for increased profits following collapse of Comet

One of Dixons' combined Currys and PC World stores

One of Dixons' combined Currys and PC World stores - Credit: Archant

PC World and Currys owner Dixons said today it was in its best shape for years after cashing in on the demise of rival Comet.

Like-for-like sales in the UK and Ireland soared 13% in the three months to the end of April as the electrical retailer reaped the benefits of being the last specialist standing in the sector.

Dixons weathered the economic downturn that saw Comet go bust at the end of last year, armed with what it described as a “stronger offer for customers”, as well as by picking up business from failed rivals.

But the need to attract shoppers with lower prices took its toll on margins, expected to be down 0.7% for the full year, in the drive for even better value for customers.

However, in its fourth-quarter trading update Dixons said it expected full-year underlying pre-tax profit at the top end of expectations of £75million to £85m, up from £70.8m in 2011/12.

Overall group like-for-like sales were up 7% for the quarter and 4% for the 12-month period.

Chief executive Sebastian James said: “This strong year puts Dixons in the best position it has been for many years.”

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He said there has been “profound restructuring” with significant cost savings and “major changes in the competitive landscape”.

“Above all we are enjoying the feeling of a little wind in our sails and we want to make sure that, in spite of continued economic uncertainty, this carries on into next year and beyond.”

Dixons said sales figures for northern Europe were up for 14% but fell 5% in “extremely difficult market conditions” in southern countries including Greece and Italy.

Trading continued to be “very challenging” at European online operation PIXmania, where there had been “significant restructuring” including withdrawal from almost half the countries where it operated and the closure of all bricks-and-mortar stores.

Today’s update follows a previous positive quarter in the three months to January, with UK and Ireland sales up 8%, including the sale of more than a million tablet computers.

Panmure Gordon analyst Philip Dorgan welcomed the “strong” figures, adding: “There is significant future profit opportunity as Dixons continues to gain more than its share of the Comet business and eliminates losses overseas.”

Retail consultants Conlumino said Dixons had benefited from being “the last specialist standing in the UK electricals sector” though it had also been “proactive” in reorganising the business.