Dixons to create 2,200 jobs

Good results

Dixons, the electronics and appliances retailer, plans to create 2,200 new jobs across the group this year following better than expected annual results.

Analysts had expected Dixons to post pre-tax profits of between £285 million and £300 million, but in its results posted on Wednesday, the company reported a pre-tax profit of £301.2 million. Previously Dixons had hoped to see pre-tax profits of around £330 million, but in January it warned that this target would not be met, following a disappointing Christmas season.

Its worth noting however that the full-year ending 3 May was recorded by Dixon's as a 53-week year, compared to a 52-week year last year.

The company runs retail chains including PC World, Currys and The Link and operates 14 shops in Ireland, where it opened a new PC World superstore and a new Currys during the year. The company said it expects to open around 16 new PC World shops in the current financial year but the location of these new shops isn't known.

Dixons' Irish operations were among its weakest performers in the group. Although sales in Ireland grew 9 percent to £61 million during the year, like-for-like sales fell 5 per cent, a decline the company attributed to the slowdown in the Irish economy.

Despite the fall in Ireland, Dixons saw like-for-like sales rise 1 percent across the group, with turnover up 18 percent to £5.76 billion. The growth is an important achievement for the group, whose performance the previous year was boosted by the World Cup.

The company pursued its expansion plans during the year, paying €366 million to gain a majority share of Italian electrical good retailer UniEuro, and it said it would continue to grow during the year. Dixons said it expects to create 2,200 jobs this financial year, including 1,000 in the UK.

Those new jobs follow a number of cutbacks, however: Dixons restructured its head office and service functions during the year, eliminating more than 300 jobs at its head office and reducing its head office space, a plan that cost the company more than STG13 million in restructuring charges.

In a statement released with the results on Wednesday, company Chairman Sir John Collins said that in addition to the poor Christmas sales, the company has seen its management energies sapped by the UK Competition Commission's inquiry into extended warranties. "We hope that the Commission's report will dispel many of the myths that surround this market and confirm the value and peace of mind which customers place on our unparalleled customer service support package," Collins said.

Looking ahead, Collins said that Dixons will continue its expansion plans, despite the fact that there remains "uncertainty over economic growth over the next year or two."

Following the results announcement Dixons shares rose in early trading, climbing more than 12 per cent in London to £1.253.


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