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Dixons Retail trims losses on UK and Nordic growth

By BFN News | 07:22 AM | Thursday 25 November, 2010

Dixons Retail reported total and underlying group sales flat at £3.35bn for the 24 weeks to 16th October, with group like for like sales up 1%. Underlying Group gross margins were up 0.3%. Underlying EBIT increased to £8.2m (2009/10 £5.6m). Dixons said there was good progress in UK & Ireland, up £5.3m, and in the Nordics, up £5.9m, with continued improvements in Italy and growing market share in Greece, despite a challenging environment. Underlying pre-tax loss was reduced to £7.9m (2009/10 loss of £17.6m). Total loss before tax after deducting non-underlying charges of £3.5m was £11.4m (2009/10 loss of £23.1m). Underlying diluted loss per share was 0.1p. Basic loss per share for continuing operations was 0.1p. Net debt was in line with that of 2009/10 full year at £215.1m, despite increased capital expenditure. Dixons said the Renewal & Transformation plan continues to improve the offer for customers and it has seen growing market shares across most markets, particularly in the UK and Nordics. The store transformation programme was on track, with 62 Megastores now operating across the Group and 250 stores transformed in the UK, including 25 Megastores. 51 stores were transformed in the Nordics, with 19 Megastores now open. New formats continue to deliver average gross profit uplifts of 20% versus the unreformatted stores; Second year trading of reformatted stores has delivered further gross profit uplifts of c.6% versus the unreformatted stores. The Group's end-to-end services for customers will be relaunched as 'KNOWHOW' in Spring 2011. Total Internet sales represent 16% of total Group sales, with multi-channel internet sales growing by 28%. £50m cost reduction plans are on track as part of the three year £150m cost reduction programme. The group said it is on track for medium term target of a 3%-4% EBIT return on sales. John Browett, CEO, commented: 'Our complete focus on our customers and on consistently delivering Value, Choice and Service continues. We remain cautious on the economic outlook across many of our markets, as consumer confidence remains low. However, we have maintained our momentum in transforming the Group and are performing ahead of the market. We have a proven store format that is delivering consistent gross profit uplifts across all our markets. We remain excited by the technology pipeline and the superb ranges and deals we will offer customers this Christmas.' Story provided by