Euro 2004 has boosted sales of LCD and plasma screens

Pre-tax profits were up by 33% to �366.2m ($670m), helped by rising sales at Currys and PC World.

But sales at its Dixons-branded stores fell and the firm warned UK trade could be hit by higher interest rates.

Shareholders are to get �200m through a share buyback, but there was also a surprise for investors with the news that Dixons' finance chief is leaving.

Pre-tax profits excluding exceptional items rose 11% to �331.6m from a restated �298.4m last year, in line with analysts forecasts of between �323m-�334m.

Dixons stores suffer

While most of its businesses put in a strong performance, its Dixons stores suffered a "disappointing year" with like-for-like sales down 5% to �798m.

In April this year the firm announced it was shutting 106 of its smaller Dixons-branded stores because of poor sales.

The stores have been hit by competition from internet retailers and from supermarkets who are increasingly selling electrical good such as TVs and DVD players.

Dixons has been experimenting with a larger store format, called XL, and now has five of these stores in the UK.

The firm announced on Tuesday it would be creating 2,000 new jobs in its stores in the coming financial year, with 1,000 of the positions in the UK.

Euro 2004 boost

Dixons said sales growth across its European operations - which include Scandinavia's Elkjop and Italy's Unieuro - had risen 7%.

Dixons' larger stores are doing well

UK operations increased their market share by 2%. Turnover for the whole group jumped 13% to �6.49bn.

The retailer said its new financial year had started in line with its expectations with LCD and plasma TV sales boosted by the Euro 2004 football competition.

But it did sound a note of caution about UK growth prospects, citing rising interest rates and a potential slowdown in the housing market as possible triggers for a slowdown in spending.

Finance chief leaves

Shareholders had been calling for the retailer to hand back cash following a number of asset sales.

During the year Dixons had sold off property business Codic International and its share of internet firm Wanadoo.

The share buyback had been much anticipated, although some analysts thought the �200m value was on the low side.

There was more of a surprise for investors from the news that Dixon's finance director is to leave the firm.

Jeremy Darroch said he was leaving the retailer to join pay-TV broadcaster BSkyB.