DSG sees profit fall

Retail giant sees sales up but profit down

Dixons Stores Group (DSG) has reported profit before tax down nine per cent year on year, although sales were up six per cent for the full year, ended 29 April.

The firm reported profit before tax of £302.9m, compared to £332.8m for last year. Turnover for 2006 was £7.4bn, compared to £6.9bn including operations to be discontinued.

John Clare, DSG chief executive, said: “The Group delivered a satisfactory trading performance over the year, despite difficult retail environments in some of our major markets. I was particularly pleased with our trading performance in the second half, when good progress was made across all our operations.”

DSG also admitted today that it is in negotiations to sell its stake in The Link Stores to O2, for about £30m.

Clare said: “I am pleased to announce that we have reached commercial agreement in principle to sell our 60 per cent stake in The Link Stores Limited to O2 (UK) Limited, subject to the agreement of legally binding documentation and other terms and conditions, for a cash sum of approximately £30m. The competitive landscape for mobile phones, initially a retail market, has changed significantly and has become a market in which the profit opportunities can best be leveraged by the networks and telecom services providers. The sale of The Link will enable us to focus on our core multi-channel electrical and computing formats as we pursue our leadership ambitions across Europe.”