Dixons warns on profit as UK trade worsens

City A.M. Reporter
The UK's No.1 electricals retailer Dixons has issued a profit warning, becoming the latest store group to report worsening trade as shoppers are hit by rising prices and government spending cuts.

Dixons, which runs the Currys and PC World chains, said profit before tax and one-off items for the year ending April 30 was likely to be around £85m.

Analysts had been expecting a figure closer to £105m, according to Thomson Reuters I/B/E/S Estimates.

"Consumer confidence across a number of our markets has deteriorated, particularly in the UK & Ireland," Dixons said.

"We expect it to continue to be (fragile) through much of 2011."

Dixons said it was considering exiting a tough Spanish market and would reduce capital spending to no more than £160m next financial year.

It will also look at making additional cost savings.