Dixons year profit to be at bottom end

City A.M. Reporter
Dixons Retail, Europe's No. 2 electricals retailer, forecast full-year profit around the bottom end of market expectations after Christmas sales in the UK were hit by December's poor weather.

The company, which runs the Currys and PC World chains in Britain, UniEuro in Italy, Elkjop in Nordic countries and Kotsovolos in Greece, said it expected underlying profit before tax in the range of £100m to £110m in 2011.

Dixons said sales at stores open over a year fell two per cent in the 12 weeks to 8 January, its fiscal third quarter.

Gross margins across the group were down 0.2 per cent.

"We remain cautious about the economic outlook across our markets," said the firm.

Dixons, which makes all its profit in the second half, is two and a half years into a turnaround plan that has focussed on selling underperforming businesses, cutting costs, revamping stores, opening larger stores and improving product ranges and service.

The programme has generally been well received by analysts, but Dixons' share price has fallen by 40 per cent over the last year.

Investors are concerned about consumers tightening their belts, competition from supermarkets and the arrival in Britain of US electricals giant Best Buy.