DSG calls off Russian move

Retail giant posts financial results for the year ended 28 April 2007 and pulls out of investment in Russian retailer Eldorado

Retail titan DSG International has called off its planned move into Russia and will instead return up to £100m to its shareholders.

The PC World Business owner has opted not to proceed with its investment into Russian retail giant Eldorado after completing due diligence, but said it would continue to look for opportunities to enter the Russian market.

The Board now plans to return the capital it would have invested in the first tranche of Eldorado shares - equating to up to £100m - to shareholders.

The announcement came as DSG International unveiled muted results for the 52 weeks to 28 April 2007.

Although group turnover hiked 14 per cent to £7.93bn, underlying pre-tax profits fell from £311m to £295.1m on an annual comparison.

Outgoing chief executive John Clare said the last 12 months had seen DSG lay the foundations for future growth, but admitted the raw figures were “disappointing” due largely to a weak performance in Italy.

Clare said the preceding 12-month period had seen DSG focus on discontinuing businesses that did not present shareholder value, such as PC City in France, while investing heavily in its online capabilities.

“We acquired a majority interest in Pixmania, Europe’s leading electrical e-tailer,” he said.

“We reinvigorated the Dixons brand by taking it off the high street and giving it the freedom to grow on the internet and, with sales almost trebling in its first year, it has got off to an excellent start.

“We have also enhanced our multi-channel offerings with the introduction of reserve and collect options for our customers in Currys and PC World, and will be rolling them out to our other operations.”

Internet sales now represent 10 per cent of the group total, up from 3 per cent a year earlier.