Dixons knocked into loss by overseas operations
By Ben Bold, marketingmagazine.co.uk, Thursday, 23 June 2011 11:55AM
Dixons Retail has reported a 3% fall in UK sales and a pre-tax loss of £224.1m after it was hit by exceptional charges in excess of £300m.
The Currys and PC World owner reported the pre-tax loss in the year ending 30 April, as it suffered from falling sales.
The group said the loss was accounted for by £309.4m in exceptional charges relating to its overseas businesses.
These included a significant goodwill writedown on its pan-European online shopping business, Pixmania.
Discounting the costs incurred, the group's underlying pre-tax profit was £85.3m, down from £90.9m last year. Sales fell from £8.5bn to £8.3bn. In the UK, sales fell 3% to £3.8bn.
The group also announced that finance director Nicholas Cadbury has stepped down to join electronic components supplier Premier Farnell.
John Browett, chief executive, said: "Maintaining sales, margin and profits is a good performance in such challenging conditions."
He said the group was outperforming its market and gaining share, thanks to its transformation plan.
He said: "The store refit programme is progressing well and our relentless focus on customers' needs is reinforced through our services brand Knowhow, which gives us a differentiated offer.
"Self-help has put our business on firm foundations and in a strong position for when we emerge from the current weak consumer environment."
Dixons incurred more than £70m in write-down costs because of the April closure of PC City in Spain, and incurred costs of £106.3m at its Pixmania business in France, well as costs of £53.2m at its Kotsovolos division in Greece.
Earlier this year, Marketing profiled Dixons' marketing director Niall O'Keeffe, who said that profits remained a tough challenge for the group.
This article was first published on marketingmagazine.co.uk
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