Dixons Retail Returns to Growth


LONDON -- Shares in Dixons Retail have jumped more than 3% in early trade this morning following the release of its preliminary audited results for the year ended April 30, 2013.

Underlying pre-tax profit rose 15% to £94.5 million from fiscal year 2012's figure of £82.1 million, with profit up 39% in the U.K. and Ireland and 6% in Northern Europe.

Group underlying total sales and like-for-like sales increased 4% for the full year to £8.2 billion versus £7.9 billion in FY 2012, up 13% in the U.K. and Ireland and 14% in Northern Europe in the final quarter.

Elsewhere, Southern Europe showed "robust performance" despite challenging markets, but the company's e-commerce business PIXmania continues to be loss-making. Management confirmed restructuring plans to put the business "on a firmer strategic footing."

Chief executive Sebastian James commented:

We have returned to growth for the Group as a whole, and also to a net cash position, marking an important milestone in our transition from survivor to winner. Our success has not been the result of short term changes, but rather a fundamental shift in our trading philosophy over the last few years so that we are increasingly standing shoulder-to-shoulder with our customers in this difficult and uncertain world. This has enabled us to take full advantage of the opportunity arising from some consolidation in our markets, but we can allow for no complacency. The economic backdrop remains tough; we will have to strive hard to keep up our momentum and will flourish only if we continue to offer ever higher levels of service, and the sharpest possible prices, no matter which channel our customers choose.

Overall, Dixons said significant progress was made against its three strategic priorities, while group costs were reduced by £45 million, in line with expectations as part of the company's two-year, £90 million cost-cutting initiative. Cash generation was also particularly strong this year: The group ended the year with net cash of £42.1 million compared with net debt of £104 million at the start of the year.

It's been a choppy few years for the Dixons share price, but today's news has helped it to a new five-year high.

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