* Underlying pretax profit 94.5 mln stg vs guidance 93 mln
* Firm helped by demise of Comet in UK
* Ends year with net cash of 42.1 mln stg
* Books restructuring charges of 168.8 mln stg
* Shares up 2 pct
By James Davey
LONDON, June 20 British sales of tablet
computers are booming, Europe's second-biggest electricals
retailer Dixons said, underpinning profit growth and
offsetting weak markets in debt-squeezed southern Europe.
The firm, which trails Metro's Media-Saturn by
annual sales, achieved triple-digit growth in tablet sales over
the year in the UK and Chief Executive Sebastian James forecast
"another big tablet Christmas."
"Less than a third of UK households now have a tablet and we
also think these are personal devices so there's lots of road
left in this particular product," James told reporters on
"And there's going to be some further product innovation as
these tablets get thinner and lighter and more powerful," he
said after Dixons beat guidance with a 15 percent rise in
underlying profit for the year to April 30.
The most popular lines are the Apple iPad, the
Samsung Galaxy and the Google Nexus.
Across Europe many store groups are struggling as government
efforts to bring down national debt crush consumers' disposable
incomes. Electrical retailers have been particularly exposed
because they sell discretionary goods under cut-price
competition from supermarkets and internet retailers such as
Amazon. On Wednesday No. 3 player Darty
reported a 66 percent fall in annual profit.
But in Britain, Dixons, which trades as Currys and PC World,
has benefited from the demise of rival Comet and the partial
exit of Jessops and HMV. It has also been cutting costs,
revamping stores and seeking to improve products, prices and
While James cautioned against extrapolating fourth quarter
UK like-for-like sales growth of 13 percent into the 2013-14
year, he said the firm had "got some momentum."
Separately on Thursday official data showed British retail
sales rebounded much more than expected in May.
Shares in Dixons, which have more than trebled in the past
year, were up 2 percent at 43.1 pence at 0926 GMT, valuing the
business at 1.57 billion pounds ($2.5 billion).
"The shares continue to have upside as the P&L benefits from
both the demise of Comet and loss elimination," said Panmure
Gordon analyst Philip Dorgan.
The firm, also home to Elkjop in Nordic countries, UniEuro
in Italy and Kotsovolos in Greece, made an underlying pretax
profit of 94.5 million pounds, ahead of company guidance of 93
million pounds and 82.1 million pounds made in the 2011-12 year.
In the UK, Ireland and northern Europe profits rose 39
percent and 6 percent respectively, while in the southern Europe
division where losses narrowed the firm was "hunkering down
while the storm passes."
Underlying group sales increased 4 percent to 8.2 billion
pounds, though gross margin fell 0.7 percentage points,
reflecting a higher proportion of sales with lower margins.
Dixons did, however, book restructuring and impairment
charges of 168.8 million pounds, relating mainly to its
struggling PIXmania internet operation and the disposal of its
Taking these into account the firm slightly narrowed its
pretax loss to 115.3 million pounds. Dixons has said it wants to
sell or close PIXmania.
The group ended the year with net cash of 42.1 million
pounds versus net debt of 104 million at the start of the year,
an outcome James said was "an important psychological milestone
in our transition from survivor to winner."
But Finance Director Humphrey Singer said it was too soon to
talk about resuming dividend payments. "We need to focus on
sorting out some of the strategic challenges we have first and
once we've got clarity on that then we'll turn to the question
of the balance sheet, which includes not just dividends but
repaying outstanding bonds," he said.