The Channel logo

News

By | John Oates 30th March 2011 07:59

Dixons whacked by profit warning

Blames the miserable British consumer

Dixons shares took a tumble this morning after the UK's favourite electrical retailer warned markets it was unlikely to hit profit targets for the year.

The company said sales were down 11 per cent in the UK and Ireland and had fallen 7 per cent across the group. It expects profits for the full year of around £85m.

Market reaction pushed Dixons shares down almost 11 per cent to 14.95p in early trading.

The retailer has laid out a four-point response plan to turn trading around.

It will review business in Spain and even consider leaving the country.

Dixons will cut capital expenditure to £160m or less in 2011/2012 and cut another £10m from this figure the year after. It will concentrate spending on shops likely to provide the greatest return. This means 55 to 60 shops in the UK will get tarted up, along with about 10 megastores in the Nordics.

The retailer said it would focus on cash generation and make extra cost-cutting measures.

It said consumer confidence, especially in the UK, was even weaker than expected since its last trading update.

Dixons ecommerce operations – including Dixons.co.uk and Pixmania – continue to grow strongly.

Dixons Retail, which trades as PC World, Currys and the Tech Guys is in the middle of revamping its shops and improving staff training. It said today the Renewal & Transformation Plan was working and it would stick to it. ®

comment icon Read 56 comments on this article alert Send corrections

Opinion

Privacy image

Frank Jennings

Two working parties, ministers galore... but data transfer law remains in limbo
EMC_Unity_bezel

Chris Evans

It does simplify the hardware setup, whatever it is
A microscopic view of the biometric shark skin. Pic: James Weaver

Chris Mellor

Do something and stop faffing about in the bush league

Kat Hall

International system in general needs greater transparency

Features

Nerd fail photo via Shutterstock
Shouting match
Single market vs. rest of the world
hacker
Mostly it's financial crime. Here's what all the cool kids' terms mean in English
Apple logo. Pic: Blake Patterson
Plenty of bumps in the 40-year road for Mac makers