DSG enjoys a window of opportunity
DSG International, the electricals retailer yesterday reported a recent surge in sales helped by store upgrades and consumer demand for Microsoft’s new Windows 7, giving it confidence for Christmas.
DSG, which runs the Dixons, Currys and PC World chain, said sales at stores open at least a year fell four per cent in the 24 weeks to 17 October, but were up one per cent in the last eight weeks of the period.
Chief executive John Browett said: “This trend was continued… which puts us in a good position.”
He expects strong sales of laptops and notebooks, large screen televisions and food mixers this Christmas.
His comments chimed with the latest Confederation of British Industry data which said British retail sales rose at their fastest pace in two years in November.
Analysts at the company’s joint house broker Citi said pre-tax profit consensus for DSG’s year to end-April 2010 was likely to rise about 20 per cent to £65-70m, up from £50.5m in the previous year.
The group is one-and-a-half years into a dramatic turnaround plan that focuses on cutting costs and stocks, selling off underperforming businesses and revamping stores.
Sales fell one per cent to £3.33bn in the first half, but the gross profit margin was up 0.4 per cent.
The retailer said it had upgraded stores accounting for a third of sales volume in Britain in time for Christmas trading. DSG reduced its net debt to £177.7m from £477.5m in April and anticipates net debt of £250m by year end 2010.