Dixon shares slump due to poor results

Retail Lower than expected Christmas sales affect stores group.

Dixons Stores Group saw its share price slump last week after posting interim results and a profit warning, caused by lower than expected Christmas sales.

The retail organisation announced a reduced profit of #65.8 million and turnover of #1,284 million, blaming the fall on low PC sales and customers delaying purchases until the January sales. Its share price slumped to 504.5p from 582p last week.

In a statement, Dixons chairman Sir Stanley Kalms said retail sales from 16 November 1997 to 10 January were down four per cent like-for-like.

Kalms claimed the figures were the result of 'a new Christmas trading pattern', which saw big purchases postponed until January. Computer products made up 29 per cent of total sales for the group and increased 35 per cent, fuelled by software and peripherals.

He also blamed the poor performance on building society windfalls bringing forward purchases. Gross margins were slightly lower due to PC World Business Direct, the off-the-page arm launched in November 1997. Sales of PCs grew, but the average selling price fell.

PC World's turnover was #267 million, up from #183 million in the same period last year - an 11 per cent rise. Dixons' turnover was #322 million, up four per cent like-for-like. Subsidiary Currys announced turnover of #626 million from #524 million last year, an 11 per cent increase.

The group expects to open 12 stores this year.

Robert Shrager, corporate finance director at Dixons, is to leave the group at the end of the current financial year. He will be replaced by Ian Livingstone, group finance and systems director.

Meanwhile, Kingfisher announced sales figures for the nine weeks to 3 January 1998 showing a like-for-like increase of only 1.3 per cent.

This was far weaker than the rest of the retail group. Comet's sales for the 48 weeks ended 3 January were #753.8 million a like-for-like increase of 6.7 per cent.