Sales soar in first quarter

DSGi group finance director Kevin O’Byrne has hinted that the electricals store group could extend its share buyback scheme.

The retailer revealed a£100 million programme in June and O’Byrne said that figure may be achieved before Christmas. Analysts would be keen for the retailer to purchase more to enhance earnings.

Panmure Gordon analyst Christian Koefoed-Nielsen said DSGi’s strong balance sheet and cash generation would enable it to borrow as much as£1 billion to repurchase shares.

O’Byrne did not dismiss the suggestion, but said no decision would be taken until after the arrival of new chief executive John Browett, who joins in December.

DSGi revealed that sales soared 11 per cent in the 16 weeks to August 18, spurred on by strong sales of flatscreen televisions and laptops.

Like-for-like growth was 6 per cent despite tough comparables after last year’s World Cup, and was above market expectations.

DSGi's group chief executive John Clare said: “We have started the year well with new technology products such as flat panel televisions continuing to drive growth.”

Gross margin was down 0.6 per cent at the electrical retail specialist, which DSGi attributed to a flurry of promotional activity to clear hardware stock levels.