Original URL: http://www.theregister.co.uk/2012/06/21/dixons_retail_2012/

Dixons Retail: A mirror held up to Europe

Southern pain, northern gain, Pixmania ruining it for everyone

By Paul Kunert

Posted in Financial News, 21st June 2012 09:44 GMT

Dixons Retail's top and bottom lines slipped in fiscal 2012 ended 28 April, according to preliminary results.

Group pre-tax profits fell to £70.8m, down from £85.3m in the previous financial year and sales dipped three per cent to £8.05bn, compared to £8.3bn in fiscal 2011.

The total loss before tax narrowed to £118.8m from £224.1m last year, after non-underlying items of £189.6m, which Dixons said are predominantly non-cash and relate to the write-off of goodwill on Unieuro, Kotsovolos and PIXmania.

The High Street is no easy place for retail outlets to ply their wares as consumers' disposable income has been hit by rising household bills, amid high unemployment and government austerity measures.

And of course bricks and mortar retailers are under constant threat from lower cost Internet rivals that undercut them on price.

Dixons said it had made "good progress" in the UK and Ireland and the Nordics with profits up 15 per cent and 12 per cent respectively but this was "offset" by "weaker" output in Southern Europe and Pixmania.

However, the group, which owns Currys and PC World, said things are looking up after a five per cent sales spike in Q4.

CEO Sebastian James, who succeeded John Browett some months ago, said he was "pleased that by focusing our efforts on delighting customers, we have outperformed [offline] competitors".

That said the company is still forging ahead with cost cutting plans, with £60m reduced in fiscal 2012 and another £90m targeted over the next two years.

Net debt fell to £104m on the £206.8m it was burdened with a year ago.

"The new financial year has got off to a good start with the trends seen in the final quarter of last year broadly continuing. However, we continue to plan cautiously and manage costs aggressively," said James. ®