£297m Dixons scores with TV sales

THE combination of strong sales of upmarket televisions for the World Cup and comparisons with a weak period in May of 2001, when mobile phone subsidies were slashed, helped electrical retailing giant Dixons to boost pre-tax profits by 7% last year.

Chairman Sir Stanley Kalms said continued good growth in sales of DVDs, TVs, white goods, games consoles and personal computers gave him confidence for current and future trading.

Turnover rose by 5% to £4.9bn in the year to 27 April but like-for-like sales were unchanged. Adjusted earnings rose by 13% to 11.6p a share and the total dividend is up 10% to 6.05p a share. Pre-tax profits rose to £297.2m from £277.8m before one-offs and excluding Freeserve, in line with City forecasts.

Chief executive John Clare said the market for mobile phones was showing an improvement year-on-year. Sales at The Link plunged by 23% on a like-for-like basis or 18% on actual turnover of £331m. Clare said some new phones, including ones incorporating cameras, would be in the stores by Christmas but added: 'Don't get over-excited by new technology yet. It will be one or two years before these new phones really make an impact.'

He said that, while the personal computers market remained 'fairly depressed in both the business-to-business and home markets', PC World had benefited from the demise of several competitors.

Gateway and Tempo have pulled out of PC retailing in Britain and Tiny and Time have merged their operations over the past year. PC World increased its sales by 8% to £1.3bn in an overall market down 21%. The Dixons chain's sales were down by 2% but Currys increased its turnover by 8% with good sales of widescreen TVs and large domestic appliances.

The fall in sales at Dixons reflected the temporary closure of almost 100 stores during the first half for refurbishment. Airport stores were hit after the 11 September terrorist attacks. About 35% of Dixons chain sales are PCs and mobile phones.

Two PC City stores were opened in France and two in Spain, and Clare said they had done well. He plans to open six such stores in France and a similar number in Spain. He said the initial costs of opening these European ventures were justified by the potential to create substantial shareholder value.

Dixons shares fell 2 1/2p to 199 1/4p.