5th Sep 2013 07:41
LONDON (Alliance News) - Dixons Retail PLC Thursday said it has seen a slight pick up in underlying like-for-like sales in the first quarter, while announcing agreements to sell its unprofitable operations in Turkey and France.
The specialist electrical retailing and services company said that it is selling ElectroWorld operation to Turkish electrical specialist retailer, Bimeks, for approximately GBP2 million in cash over two years.
Dixons said that the Turkish assets being disposed of generated a retail operating loss of GBP9 million last year and a pretax loss of GBP13.8 million on turnover of GBP170.7 million. It has gross assets of GBP42.3 million from 32 stores, including 18 franchise stores.
Dixons also said that it has received an irrevocable offer from mutares AG, a German-listed industrial holding company, to buy Dixon's French-based pure-play e-tailer PIXmania S.A.S.
Dixons said that under the terms of the offer, it would provide a cash injection of approximately EUR69 million, which will be ring-fenced to support mutares' plan of building on PIXmania's e-commerce operations, and for the ongoing funding of the business. It provided no other financial details.
The company said, that in line with French labour law, it will enter into a consultation period with PIXmania's works councils.
In a separate statement, the company, owner of the Currys and PC World store chains, also said that underlying group like-for-like sales was up 2% in the first quarter, with underlying like-for-like sales in Northern Europe up 5%, and in the UK and Ireland up 6%. However, it said that underlying like-for-like sales in Southern Europe declined by 12%.
It said that growth in Northern Europe was driven by further market shares gains, while the fall in sales in Southern Europe was due to continued challenging market conditions and cooler summer weather affecting sales of air-conditioners.
Dixons said that across its multi-channel businesses, like for like sale were up 4% in the period.
The group also said that its gross margins were down by 0.4% in the first quarter, largely due to its continued drive for better value for its customers, particularly in the Nordic countries.
Dixons shares were up 8.2% or 3.64 pence after the market opening Thursday, trading at 47.90 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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