DSG has seen sales pick up

Across DSG's electrical division, demand for iPods and MP3 players helped to increase like-for-like sales by 7% during the six months to 29 April.

DSG said digital goods sales would be strong in the run-up to the World Cup.

As a result, it raised its annual profit forecast to �312m-�318m, up from analysts' expectations of �300m-�310m.

Tough trading

Sales at Currys were up 9% in the second half of DSG's financial year, while Dixons sales rose 8%.

Overall like-for-like sales - which strip out the impact of new store openings - across the DSG group were up by 4% in the six-month period.

I was particularly pleased with our trading performance in the second half John Clare, DSG chief executive See DSG's share price

The group's performance was held back by its mobile phone chain The Link, which recorded a 21% drop in sales.

For the year to 29 April, like-for-like sales for DSG as a whole were flat.

The results were satisfactory "given a difficult retail environment in the UK", said DSG chief executive John Clare.

"I was particularly pleased with our trading performance in the second half," he added.

Mr Clare said the company remained "cautious" about the prospects of any long-term recovery and "much will depend on wider economic factors".

DSG's shares closed 13.5 pence, or 6.95% higher at 208.75p on the London market.

"With a strong balance sheet, good yield and growing confidence in prospects, the shares could progress further," said Investec analyst Mark Charnock.