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DSG International (DSGi) saw annual profit tumble 30 per cent today, after the struggling electrical retailer was forced to cut prices to shift stock amidst a tightening of consumer spending.
The firm, whose stores include Currys and PC World in the UK, Elkjop in Nordic countries and UniEuro in Italy, reported pre-tax profit and one-off items of £205.3m in the 53 weeks to 3 May 2008, compared to £295.1m for the previous year.
DSGi, which in the past six months has been forced to put out two profit warnings, made a loss before tax of £192.8m for its 2007/2008 fiscal year and added that it has £779m of available funding.
Total group revs at the firm rose eight per cent to £8.55bn, and were up one per cent on a like-for-like basis. However, same-store sales actually dropped six per cent in DSGi’s computing division and in Italy the figures were even bleaker: down some 11 per cent.
The company’s chief executive John Browett admitted that the year ahead was going to be “challenging”, but remained tight-lipped about current trading at DSGi.
Last month Browett announced that the firm would overhaul its PC World computer barns and slash its fleet of High Street shops as part of a turnaround plan. That decision was revealed the same day that DSGi admitted sales had gone into reverse at its computer retail business.
The company said that it will consolidate its losses by integrating the operations of PC City in Italy and Sweden into UniEuro and Elkjop respectively, and expects to complete plans in those regions in the first half of the current fiscal year, it said.
Despite the gloomy results that this morning pushed shares down 1.1 percent to 44.5 pence on the London Stock Exchange, Browett insisted that he was on track with his recovery plan for the company. Last month as part of those plans the CEO halved the firm’s final dividend, cut costs and invested in customer service and the internet.
He said three new format PC World stores were performing well, and that plans were afoot to open 13 more in the next three months. In addition, new trial stores for Currys, Currys.digital and a large format store in the UK will follow this autumn. ®
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