Dixons recovery on track

However, once you strip out over £200m of restructuring charges and trading results from businesses that have or will be exited, adjusted group pre-tax profit increased 15 per cent to £94.5m on underlying sales up 4 per cent to £8.2bn. The gross margin fell 70 basis points because of product mix and competitive pricing, but the cash profit margin did improve. The group moved to a net cash position of £42m one year ahead of schedule and, after making £45m of cost savings in the period, Dixons is targeting a further £45m reduction this year.

In the UK and Ireland, same-stores sales grew 7 per cent, while underlying profit jumped 39 per cent to £113m. Trading was strong in northern Europe, too, where sales rose by 12 per cent and profits grew 6 per cent to £121m. Much of this growth, though, was achieved as competitors closed shop, allowing the group to steal market share, notably that of Comet. That said, customer service helped attract customers, too. The 'KnowHow' support and repair services operation in Britain is being rolled out to Northern Europe, having grown 54 per cent in the UK.

In southern Europe, same-store sales slumped 8 per cent as economic conditions in Greece and Italy deteriorated, but tight cost control helped the underlying loss improve by £6.9m to £24.4m. The business in Turkey faced stiff competition and growth in retail space outstripped underlying market growth, hitting like-for-like sales at the 32 stores in the country.

Asked about the future of pan-European electrical e-tailer Pixmania, chief executive Sebastian James answered vaguely, saying: "Nothing we can talk about has changed". Like-for-like sales in the business tumbled 24 per cent and the loss nearly doubled to £31.3m. A total of 19 stores were closed and staff numbers in France halved to 649. In April, Pixmania sold Swedish business Webhallen for £14m, followed by PLS, a provider of photo-printing services at newsagents.

Barclays expects adjusted EPS of 2p in 2014, rising to 2.8p in 2015.