First Profit In Six Years For Dixons Retail PLC

The shares of Dixons (LSE: DXNS) dropped 4% to 49p this morning as investors took profits following encouraging half-yearly results for the electronics retailer.

Dixons, which owns Currys and PC World, revealed its UK & Ireland like-for-like sales were 9% higher than last year at £1.8bn. Underlying profits for the region improved from £7m last year to £31m, helped largely by the collapse of rival Comet last year.

After disposing of unprofitable businesses in Turkey and Italy over the period, Dixons-owned Elkjøp Group enjoyed another year of record sales in northern Europe. While competitive pressure caused profits from the region to falter slightly, at £45m, this region remains the most lucrative for Dixons.

Chief executive Sebastian James however struck a cautionary tone with his outlook:

“We remain cautious about the outlook for consumers in our markets; very strong trading this time last year, together with the fact that we have now annualised Comet’s exit makes the second half more challenging.  Nevertheless, we have had a great first half and our stores have never looked better – or had better offers for customers”

With a market cap of £1.8bn, Dixons is valued at 16 times its forward earnings, and offers no dividend.

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> Mark owns no shares mentioned in this article.