 Dixons Group has been expanding its European operations |
Electrical retailer Dixons Group has reported an 8% fall in annual profits, and said the outlook for the current year remains "challenging". The owner of Dixons, Currys and PC World in the UK said its full-year pre-tax profits were �336.8m ($612.6m).
The group said it is to close several distribution centres in the UK over the next two years as part of a �30m cost-cutting drive.
Dixons also announced it was changing its group name to DSG International.
The company said the move reflected that fact that its flagship Dixons chain now accounted for less than 10% of group sales.
It will reduce its UK distribution network from 17 centres to just two but it is not clear how many jobs will be affected by the closures.
Tougher trading
Chief executive John Clare said the UK group had experienced tougher trading conditions in the second half of the year as retail expenditure slowed.
"The outlook for the year ahead is uncertain, but we are anticipating a challenging trading environment, particularly in the UK and Italy," he said.
Dixons Group said sales at its Dixons chain fell 14% to �688m, from �798m in the previous year, following the previously-announced store closures at the beginning of the year.
Yet, like-for-like sales at the Dixons chain were up 4% for the year, and by 5% in the second half.
Reversing trend
Nick Wood, managing director of the Dixons chain, said he was confident the stores were now turning themselves around.
"In recent years the Dixons chain has faced tough competition, both from within the Dixons group, and the vast growth in external competition," he said.
"I feel very confident however that Dixons is now reversing this trend.
"Despite a tough trading environment on the High Street our sales are now growing."
Sales at the group's white goods and electrical chain Currys rose 6% to �1.8bn, from �1.7bn in the previous year.
Sales at computer retailer PC World rose 11%, while mobile phone High Street chain The Link saw sales rise 4%.
Dixons owns the PC City, Elkjop and UniEurope chains in continental Europe. Full-year international sales reached �2.16bn.
Shares in Dixons Group dropped almost 1% to 154 pence in early trade on the London Stock Exchange.
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The outlook for the year ahead is uncertain - we are anticipating a challenging trading environment
