Currys owner DSG warns of tough year for electronics

Published on Thursday 25 June 2009 21:54

CURRYS and PC World retailer DSG International has racked up a second year of annual losses as it warned yesterday that electronics markets were likely to remain tough in the year ahead.

DSG, best known for Dixons before the brand was discontinued in the high street, lost 140.4 million in the year to 2 May.

That loss was driven by 191m of one-off charges, including restructuring costs, but was down on the 184m loss in the previous 12 months.

John Browett, DSG International's chief executive, warned yesterday that the group did not expect its markets to recover until the second half of next year. That echoed comments from rival Kesa Electricals a day earlier.

He said: "The recession continues. There's been no significant downward shift or upward shift.

"We're seeing the pattern of a normal recession. That recession is widespread, and impacts on all the markets we're operating in."

DSG runs Currys and PC World stores in Britain, Elkjop in the Nordic region and UniEuro in Italy.

Browett added: "Our internal plans assume that there's no upturn in the (UK] economy until the second half of calendar 2010. I hope that's a very cautious view. There are people out there who've got more optimistic views, including the Chancellor. I hope he's right."

Stripping out one-off items, DSG made a pre-tax profit of 50.5m in the year to 2 May – compared with 225.6m in the previous year.

Total sales fell 1 per cent at 8.36 billion, although online profits doubled to 15m. DSG ended the period with net debt of 477.5m, and had already said it would not pay a dividend.

In April DSG raised 311m in the stock market and renegotiated its 475m banking facilities, which beefed up its balance sheet and allowed it to accelerate store refurbishments.

DSG cut costs by 95m in the year, and is targeting 200m of further savings over the next four years. Initiatives are also under way to reduce working capital by 80m to 130m.