DSG profits remain flat in six-month trading statement

UK arm of the business is doing well, firm claims after blaming weak Italian market for flat results

DSG, the parent company of PC World Business (PCWB) and Currys, has laid the blame for its flat interim results at the door of Italy.

Although turnover for the Group for the six months ended 11 November 2006 increased 14 per cent to £3.7bn compared to £3.3bn the year before, underlying pre-tax profit remained the same at £96.9m for the period, which DSG attributed to a “weak performance in Italy”. Underlying profits increased by 30 per cent if Italy was taken out the picture, the firm claimed.

Despite the flat results, turnover in the UK and Ireland increased five per cent to £1.3bn, compared to £1.2bn in 2005. PCWB saw turnover grow 17 per cent to £209.9m, compared to £180m in 2005.

One of the highlights of the half-year, DSG claimed, was the launch of its ‘TechGuys’ support service in the UK (CRN 11 September), which it plans to invest around £50m in over the next five years to roll it out across Europe. DSG also expects to create 1,600 new jobs across Europe in 2007.

In a trading and outlook statement for the eight weeks ended 6 January - released at the same time as the interim results - John Clare, group chief executive revealed the retail giant had experienced a solid Christmas trading period.

In a statement he said: “Across Europe, high definition flat panel televisions and laptop computers sold very well with iPods and other digital technology products continuing to be popular Christmas gifts.

“In the UK, sales of televisions and laptops were strong throughout the period. PC World delivered a good sales performance across the period and is well positioned for the launch of Windows Vista at the end of this month. Total online sales now account for 10 per cent of group sales and the sales performance of Dixons.co.uk exceeded our expectations.”

Clare was also upbeat about the next quarter.

“There are still four months of trading ahead of us in the current financial year. While the impact of higher interest rates and taxes on our customers’ discretionary expenditure is uncertain, there is an exciting product pipeline, which will offer opportunities in all our markets and I am encouraged by the strong start to the winter sale period in all countries.”