Profits plunge for owner of Currys and PC World; In association with Chadwick Lawrence

Huddersfield Daily Examiner (Huddersfield, England), June 26, 2008

THE owner of retail chains Currys and PC World unveiled a 30% plunge in profits today - and said it remained "very cautious" about consumer confidence.

DSG International posted pre-tax profits of pounds 205.3m for the 53 weeks to May 3. The figure is down from pounds 295.1m the previous year, but in line with market forecasts.

Bosses at the group had already issued two profits warnings this year.

DSG, which has embarked on a three-year turnaround plan to improve its fortunes, said its UK computer stores were worst-hit with like-for-like sales down by 5% and underlying operating profits almost halved at pounds 63.2m.

The group said it would focus on cost control and cash flow after having to launch a raft of laptop promotions to shift stocks.

Overall like-for-like sales were up by 1% during the year, helped by a 27% rise in internet sales. Total UK computing sales fell by 1% to pounds 1.8bn.

The story was better for UK electricals, which comprises Currys and high street chain Currys.digital.

Like-for-like sales rose by 3%, with total sales 4% ahead at pounds 2.9bn thanks to sales of flat panel televisions and digital products.

The division made a strong start to the year, but the second half deteriorated as the consumer slowdown worsened and increased promotions hit margins.

DSG, which has some 700 stores in the UK and 500 outlets overseas, lifted total sales by 8% to pounds 8.5bn. Italy was the worst-hit international market with same-store sales down by 11%.