UK electronics chain Dixons reports full fiscal year preliminary underlying pretax profit gain of 15% to £94.5M, total sales rise of 4% to £8.21B, like-for-like sales rise of 4%

Cindy Allen

HERTFORDSHIRE, England , June 20, 2013 (press release) – A year of significant progress

Dixons Retail plc, one of Europe’s leading specialist multi-channel electrical retail and services companies, today announces preliminary audited results for the financial year ended 30 April 2013.

Key highlights

• Significant progress made against our three strategic priorities
• Further improvements to the offer for customers and financial strength of the business for shareholders.
• Group underlying total sales and like for like sales up 4% in the full year^{(1), (2), (3).}
  
  • Like for like sales in the final quarter up 13% in the UK & Ireland and up 14% in Northern Europe reflecting strong share gains.

• Underlying pre-tax profit up 15% to £94.5 million (2011/12 profit of £82.1 million) ⁽¹⁾.
  
  • Good progress in UK & Ireland and Northern Europe with profits up 39% and 6% respectively.
  • Robust performance in Southern Europe in difficult markets.
  • Offset by poor performance in PIXmania.

• PIXmania restructured to reduce losses and enable process of putting the business on a firmer strategic footing.

• Customer satisfaction measures continue to show strong advocacy in the UK.

• Group costs reduced by £45 million as part of the two year £90 million cost reduction initiative.

• Very strong cash generation with the Group ending the year with net cash of £42.1 million versus net debt of £104.0 million at the start of the year.

Financial highlights

• Total underlying Group sales up 4% at £8.21 billion (2011/12 £7.91 billion).

• Total Group sales, including those from businesses exited/to be exited were £8.44 billion (2011/12 £8.19 billion)⁽²⁾.

• Group gross margins down 0.7% in the full year driven largely by product mix.

• Restructuring and impairment charges of £168.8 million, relating mainly to PIXmania and the main non-store UK B2B operations following the disposal of Equanet.

• Total loss before tax of £115.3 million (2011/12 loss of £118.8 million), after non-underlying items of £209.8 million, which predominantly comprise the restructuring and impairment charges⁽¹⁾.

• Underlying diluted earnings per share 1.5 pence (2011/12 earnings of 1.4 pence) (1).  Basic loss per share 4.4 pence (2011/12 loss per share of 4.3 pence).

Sebastian James, Group Chief Executive, commented:

“It has been a good year for Dixons Retail with underlying profits up by 15%, and a great year in the UK and Ireland with profits up by 39%.  We have returned to growth for the Group as a whole, and also to a net cash position, marking an important milestone in our transition from survivor to winner.  On all of our strategic priorities I am pleased with the progress we have made, even though I am, of course, impatient for us to achieve even more, even faster, particularly in focusing on markets where we are, or can be, a leader.

Our success has not been the result of short term changes, but rather a fundamental shift in our trading philosophy over the last few years so that we are increasingly standing shoulder-to-shoulder with our customers in this difficult and uncertain world.  This has enabled us to take full advantage of the opportunity arising from some consolidation in our markets, but we can allow for no complacency.  The economic backdrop remains tough; we will have to strive hard to keep up our momentum and will flourish only if we continue to offer ever higher levels of service, and the sharpest possible prices, no matter which channel our customers choose.

The year ahead offers many fantastic opportunities for us and we have plans which touch every part of our business to make things better, easier and faster.  I believe that many of our stores are now among the very best in the world, but I recognise that we need to make sure that the experience in our stores is completely consistent – from Truro to Tromsø; every day we must find new ways to surprise, delight and improve the lives of our customers.  I look forward to another good year, building on the momentum of this year, and one which proves rewarding for our customers, our teams and of course, our shareholders.  In the meantime, nothing has given me more pleasure than to celebrate with my colleagues, very briefly, all we have achieved and to thank them for their hard work before launching headlong into the coming year.”

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