7.00am, Wednesday, 7 September 2011
Group trading in line with expectations
Dixons Retail plc, one of Europe (Chicago Options: ^REURTRUSD - news) 's leading specialist electrical retailing and services companies, is today updating the market on trading for the 12 weeks ended 23 July 2011.
· Total Group sales down 1% in sterling and like for like sales down 7%.
· UK operations performed in line with expectations:
· Customer satisfaction measures, including advocacy, continue to make very encouraging progress;
· KNOWHOW service proposition now fully operational in UK ∓ Ireland;
· Anniversary of strong World Cup sales and launch of the iPad.
· Nordic operations continue to perform well, gaining further market share.
· Operations in Italy and Greece continue to trade ahead of weak markets.
· 14% of Group sales online with growth into multichannel sales continuing.
· Gross margins across the Group were down 1% year on year largely as a result of actions to gain market shares in the Nordics and Other International businesses as well as clearance activity in our markets.
· Additional £10 million of cost savings identified delivering a total of £60 million in the current financial year.
· Capital expenditure will be approximately £100 million this year with the focus on transforming those stores that present the best opportunity for improving the offer for customers.
· 71 Megastores now open with 32 in the UK.
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12 Weeks ended 23 July 2011
Like for like growth
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Pure play e-commerce
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John Browett, Group Chief Executive, commented:
"This performance was in line with our expectations when compared with particularly strong trading last year as a result of the World Cup and launch of the iPad. While underlying market conditions have remained challenging this year we have continued to trade ahead of our markets as customers respond to our improving customer offer. I am particularly pleased with the significant and ongoing improvements we have seen in customer satisfaction measures in the UK which demonstrate the success of our Renewal ∓ Transformation plan, as well as our continued strong trading in the Nordics. We remain on track for full year expectations.
While we remain cautious about the economic outlook we will continue to deliver on our Renewal and Transformation plan and make the business better, easier and cheaper to run and deliver an unbeatable combination of Value, Choice and Service (Shenzhen: 399320.SZ - news) for customers."
- Ends -
For further information
David Lloyd-Seed Group Director of Communications, Dixons Retail 01727 205065
Mark Webb Head of Media Relations, Dixons Retail 01727 205019
Laura Cummings/Zoe Bird Brunswick 020 7404 5959
Information on Dixons Retail plc is available at http://www.dixonsretail.com
In previous years, the Group's like for like policy has excluded stores undergoing refits. In practice, stores now remain open for trading during most of the refit process, and the Group has been successful in mitigating disruption through this approach. The Group has therefore decided that it is more appropriate to only exclude stores when they are actually closed for trading during refits. Had this policy been applied in the prior year, it would not have affected full year like for likes, but would have reduced UK and Group like for like by 1% in the first quarter.
If the old policy were to continue to be applied this quarter, the new store formats would have been excluded from the like for like calculation during the anniversary period of their refit. This would result in a reported like for like performance in the current period that did not properly represent the improvements from the Renewal ∓ Transformation plan. Like for like sales this year would have been adversely impacted by 2% in the UK ∓ Ireland if the previous approach had continued to be applied.
1) Like for like sales are calculated based on stores that have been open for a full financial year both at the beginning and end of the financial period and are calculated using constant exchange rates. Customer support agreement sales are excluded from all UK like for like calculations. Operations that are subject to closure have sales excluded as of the announcement date. Stores closed for refurbishment are excluded during the period of closure.
2) UK ∓ Ireland comprises Currys, CurrysDigital, Dixons Travel, PC World, operations in Ireland, DSGi Business and KNOWHOWTM. Like for like sales exclude DSGi Business and KNOWHOWTM.
3) Nordics comprises the ElkjØp group and Dixons Travel Denmark.
4) Other International comprises Greece (Kotsovolos), Italy (UniEuro, PC City Italy store in store and Dixons Travel Italy), the Czech Republic (ElectroWorld), Slovakia (ElectroWorld) and Turkey (ElectroWorld).
5) e-commerce division comprises Dixons.co.uk and PIXmania.
6) Movements in the financial position, including levels of borrowings, of the Group since the last balance sheet date are reflective of the trading performance and statements outlined above. Other than this, there have been no significant changes in the financial position of the Group.
7) Certain statements made in this announcement are forward looking. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward looking statements. Unless otherwise required by applicable law, regulations or accounting standards, we do not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.