The deepening economic crisis in Greece and Italy meant Dixons' underlying profits slipped 17 per cent to £70.8m last year, excluding hefty goodwill writedowns which led to the substantial reported losses in our table. But widening losses in southern Europe disguised strong performances in the UK and northern Europe, while the sale and leaseback of its Swedish warehouse meant a sharp reduction in net debt.
That deal raised £58.1m and more than offset the £27.5m Dixons spent on restructuring. The £103m reduction in net borrowings to £104m was also partly due to lower spending on its UK store transformation programme. However, that doesn't seem to have affected UK trading: sales in the fourth quarter climbed an impressive 8 per cent, boosted by buoyant demand for large TVs and a robust computing market, a trend that has continued into the current year. That narrowly trailed another strong performance in its Nordic business, Elkjop, which grew sales 10 per cent in the quarter, helping the northern European business increase profits by 12 per cent to £114m. Elkjop's centralised operating model is being adopted elsewhere in the group as part of Dixons' cost reduction plan, which delivered £60m of savings last year and is targeting a further £90m over the next two years.
Broker Investec expects underlying pre-tax profits of £87m and EPS of 1.6p in the year to April 2013 (from 1.1p last year).
DIXONS RETAIL (DXNS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 17.2p | MARKET VALUE: | £621m | |
| TOUCH: | 17.16-17.23p | 12-MONTH HIGH: | 20p | LOW: 9p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 11p* | NET DEBT: | 26% | |
| Year to 28 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 8.49 | -184 | -11.5 | 4.02 |
| 2009 | 8.32 | -124 | -8.4 | nil |
| 2010 | 8.53 | 113 | 1.7 | nil |
| 2011 | 8.34 | -224 | -6.6 | nil |
| 2012 | 8.19 | -119 | -4.3 | nil |
| % change | -2 | - | - | - |
*Includes intangible assets of £839m or 23p a share | ||||
