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&rsquo;s new Windows 7, giving it confidence for Christmas.<br /><br />DSG, which runs the Dixons, Currys and PC World chain, said&nbsp; 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.<br /><br />Chief executive John Browett said: &ldquo;This trend was continued... which puts us in a good position.&rdquo;<br /><br />He expects strong sales of laptops and notebooks, large screen televisions and food mixers this Christmas.<br /><br />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. <br /><br />Analysts at the company&rsquo;s joint house broker Citi said pre-tax profit consensus for DSG&rsquo;s year to end-April 2010 was likely to rise about 20 per cent to &pound;65-70m, up from &pound;50.5m in the previous year.<br /><br />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.<br /><br />Sales fell one per cent to &pound;3.33bn in the first half, but the gross profit margin was up 0.4 per cent.<br /><br />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 &pound;177.7m from &pound;477.5m in April and anticipates net debt of &pound;250m by year end 2010.