UK Computing – which includes PC World - and Southern Europe saw the biggest falls, both down 12% for the 16 weeks to 23 August. The Nordic region dipped 4%. The only division to report a positive result was the e-commerce division, incorporating www.dixons.co.uk and PIXmania, which climbed 6%.
The overall fall in sales was at the higher end of analysts’ expectations who had forecast falls of between 4% and 8%. Gross margins across the group were down 0.75% year on
year.
The group has made progress on its restructuring, announced by new chief executive John Browett, who took over last December. The group has delivered a £50m cost reduction programme and has a further £50m in savings targeted for this year. 5 PC World stores have been refitting and 25 more refits are under way. The restructuring of the Italian business is also underway. The struggling Italian and Spanish business were placed under review in May and could be sold.
Chairman John Collins is to retire from the board after the 2009 AGM.
The shares dipped 2.25p to 50.5p in early trading. They saw a brief period of recovery last month, but have since resumed their downward path. They are now a third of their value of a year ago. They still trade on around 11x earnings, which seems high given that most retailers are on single digit p/e ratios and DSG’s prospects look grimmer than many of its peer group. There is nothing to get excited about here.
This article originally appeared on Hemscott.com. Morningstar and Hemscott are now one company. You can see the original version of this article on the Hemscott Web site.
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