11th May 2005 07:02
Dixons Group PLC11 May 2005 PR 30/057.00am, Wednesday 11 May 2005 DIXONS GROUP PLC - TRADING STATEMENT Dixons Group is today updating analysts on trading for the 52 weeks ended 30April 2005. All figures are based on local currency performance. The like for like salesfigures for the Group's UK businesses no longer include sales of serviceagreements. Like for like sales for prior periods are restated in the appendixto take account of this change. 24 Weeks ended 30 April 2005 52 Weeks ended 30 April 2005 ---------- --------- ---------- ---------Sales Total Like for Total Like for growth like growth like ---------- growth ---------- growth --------- --------- Currys (UK) 2% 2% 6% 6%Dixons (UK) (16)% 5% (14)% 4%Ireland 10% 1% 12% 3%Elkjop(Nordic) 18% 6% 16% 4%UniEuro(Italy) 5% (5)% 4% (4)%Electro World(Hungary &CzechRepublic) 2% N/A 13% N/A PC World (UK) 5% (8)% 11% (2)%PC City(Spain,France, Italy,Sweden) 44% N/A 46% N/AThe Link (UK) (7)% (9)% 4% 2%------------------- ---------- --------- ---------- ---------Total UKbusinesses (2)% (2)% 3% 2%------------------- ---------- --------- ---------- ---------TotalInternationalbusinesses 29% 1% 24% 1%------------------- ---------- --------- ---------- ---------Total Group 7% (1)% 8% 2%------------------- ---------- --------- ---------- --------- NOTES: 1. Total sales of PC World include PC World Business. Like for like sales are for PC World stores only 2. The store base for like for like sales in both ElectroWorld & PC City is not significant 3. Total group sales include a first time contribution from Kotsovolos 4. Total sales of The Link include Genesis. Like for like sales are for The Link stores only. Total Group sales for the 52 weeks ended 30 April 2005 were up 8% with Grouplike for like sales up 2%. This performance includes strong sales growth of 24%from the Group's international operations, which now span 12 countries outsidethe UK. Total UK sales were up 3% reflecting a weaker consumer environment inthe second half of the financial year. Gross margins were down 0.6% versus last year as a result of lower creditcommissions, higher business to business sales and changes in product mix. Grossmargins in the second half were down 0.5%, an improvement on the first half whenmargins were down 0.7%. John Clare, Chief Executive, commented: "When we updated the market in November and January we cautioned that we wereseeing a slowdown in consumer expenditure. We have managed our businessesaccordingly and have focused on margins, costs and service. We have been equallyunwavering in our continued focus on our customers. Against this challengingbackdrop, I am pleased that the Group has been able to deliver another year ofprogress. We expect that our full year results will be in line with currentexpectations. Sales performance across our retail brands was mixed, with Elkjop, Currys,Dixons and our investment businesses, PC City and Electro World, performingwell. PC World sales were adversely affected by price deflation, which impactedthe computing market, although we made encouraging market share gains. In thesecond half, with sales up 29%, our international operations reached animportant milestone, contributing one third of Group sales for the first time.We are cautious about the prospects for our markets over the next twelve months.Price deflation continues to be a factor, which, combined with cost inflationand a cautious UK consumer, means that the environment will be very challenging.Whilst we will always trade competitively in our markets our priorities remain afocus on gross margins and reducing our costs. We will continue with investmentsin new markets in line with our longer term strategic goals."UK trading Total UK sales grew 3% for the full year and 2% on a like for like basis. The UKwas impacted by the weakening consumer environment over the second half, andparticularly in the final quarter of the financial year. The Group continued togain market share in the UK. Currys grew like for like sales 6% year on year. Following a strong first halfperformance, like for like sales growth slowed in the second half to 2%.Dixons like for like sales were up 4% in the year and up 5% in the second halfalthough total sales declined 14% in the year, following the closure of over 100stores in the first quarter of the financial year. PC World total sales were up 11% including a significant contribution from PCWorld Business which benefited from the acquisition of Microwarehouse in June2004. Unit sales of laptop and desktop PCs were up, although growth was slowerin the second half and PC World gained market share. However sales value wasaffected by price deflation with like for like sales down 2% for the full yearand down 8% in the second half of the year. Total sales for The Link were up 4%, with like for like sales up 2%, but down 9%in the second half with lower levels of contract sales and price reductions onprepay. The Group's UK business saw strong sales of internet audio, flat paneltelevisions and laptops. International Trading Operating in 12 countries outside the UK, International operations contributedone third of total Group sales in the second half. Total International salesgrew 24% for the full year and by 1% on a like for like basis. Elkjop increased total sales by 16%, with like for like sales up 4%. New storeopenings and an expansion of the franchise network operation beyond Norwaycontributed to Elkjop gaining market share in all its markets during the period.UniEuro had a disappointing year. Total sales were up 4% but like for like saleswere down 4%. Good progress is being made restructuring the business.New store openings combined with a good like for like performance of 3% acrossthe year in Ireland resulted in year on year total sales growth of 12%.The PC City and Electro World operations continued to grow sales in line withexpectations. The Group recently announced plans to accelerate the store openingprogramme for PC City in France and new market entries for PC City in Portugaland Electro World in Poland. In September 2004 the Group acquired Kotsovolos which is performing in line withexpectations. International Financial Reporting Standards ("IFRS") The Group is adopting IFRS accounting standards for the financial yearcommencing 1 May 2005. An announcement detailing the impact of IFRS on DixonsGroup's existing accounting policies and 2004/05 results will be released on 22June 2005. Dixons Group's full year results for the 52 weeks ended 30 April 2005 will beannounced on 22 June 2005. - Ends - Maylands Avenue John Clare Hemel Hempstead Group Chief Executive Hertfordshire HP2 7TG 11 May 2005 For further information Dixons Group Kevin O'Byrne, Group Finance Director, 01727 203201David Lloyd-Seed, Director of Investor Relations01727 205065 / 07779 574 780Hamish Thompson, Head of Media Relations01727 203 195 / 07702 684290 A conference call for analysts will be held at 8.30am. Information on the Dixons Group plc is available at http://dixons-group-plc.co.uk Appendix During the second half of the year the Group launched new service agreements inthe UK. This gave customers the alternative option of paying for their serviceagreements on a monthly basis in addition to the existing up front lump sumbasis in Currys, PC World and The Link. In prior years like for like sales inthe UK have included the full value of service agreements sold during therelevant reporting period. Like for like sales inclusive of service agreementspaid for on a monthly basis are not comparable with those reported in prioryears. Consequently the Group now reports like for like sales excluding serviceagreements in the UK. In order to present comparable year on year figures for like for like sales inthe UK, these are now shown excluding sales of service agreements. Below for illustrative purposes only are like for like sales excluding sales ofservice agreements in the UK for the 52 weeks ended 1 May 2004 and the 28 weeksended 13 November 2004 All figures are based on local currency performance 52 Weeks ended 28 Weeks ended 1 May 2004 13 November 2004----------------- --------- ---------- ---------- -----------Like for Like Including Excluding Including Excludingsales Service Service Service Service----------------- Agreements Agreements Agreements Agreements --------- ---------- ---------- ----------- Total UKBusinesses 2% 3% 6% 7%TotalInternationalBusinesses 4% - 1% ------------------ --------- ---------- ---------- -----------Total Group 3% 3% 5% 5% This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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