Dixon’s improvement has continued with sales flat but life-for-like growth of 3%. The UK & Ireland division grew by 2% and posted a profitable first half for the first time in five years today. The news was welcomed by the City.
“We said yesterday that ahead of today’s interims from Dixons the City was split, with the bulls hoping for a big cut in the H1 loss from £25m and with the bears fearing little improvement in the H1 loss. Well, the bears were right, with a loss still as high as £22m, despite the UK swinging back into profit. The culprit, of course, was Southern Europe(Italy and Greece) and the wretched Pixmania and this will be big focus at the meeting at 9am, along with the outlook for a Comet-less UK.” – Nick Bubb, independent
“In the UK & Ireland Dixons has given a great example of how to get back to basics and has been left with a leaner, more competitive business as a result. A simplification of brands, jettisoning the currys.digital and dixons.co.uk fascias and combining Currys and PC World, has created a more compelling offer for consumers. Moreover, improvements to service and instore experience meant Dixons was able to compete against the rise of non-specialist rivals in a way that Comet was unable to.
“Dixons faces a number of challenges ahead, with further store closures required and minimal growth in its core sectors. Moreover, it can’t afford to lose focus with the likes of John Lewis, Amazon and the supermarkets all still looking to take share.
“That said, the collapse of Comet will provide some much needed relief and Dixons can look forwards to pockets of opportunities in areas such as tablets, Smart TVs and small kitchen appliances.” - Matt Piner, Conlumino
“The fact that Dixons’ domestic business is back in profit in first half for the first time in five years is excellent news. Management now needs to resolve the hole in profits that is Southern Europe and PIXmania. There are encouraging signs at the former, with good cost control driving loss reduction, while the writedown at the latter signals management’s intentions to seek a positive solution. We like the new management incentive schemes, which align interests with shareholders. We also believe that the demise of Comet might add £30m to EBIT next year.” - Philip Dorgan, Panmure Gordon