Dixons group announces huge losses

 

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By Matthew Sparkes

Posted on 27 Nov 2008 at 10:48

DSG has reported losses of £29.8 million over the last six months, forcing it to scrap dividend payments to prepare for a period of "tough and volatile" trading.

The parent company of PC World and Currys blamed poor trading conditions in Central Europe and the UK for the dip in profits.

Although overall sales across the group have risen by 3%, when adjusted for growth in the number of stores it operates, this figure shows a fall of 7%.

Dividend payments will be stopped this fiscal year in order to preserve liquidity. The company has existing debts of £149.5 million, despite cutting costs of £75 million in the past year.

Despite the poor financial results, DSG is one of the first retailers to pass on the recent 2.5% cut in VAT to consumers. The company told PC Pro earlier this week that it was already using the new rate.

"When you get through to the checkout, the discount will be applied," a Dixons spokesman told us.

Earlier this year the company announced that it had seen a 30% drop in profits over the previous six months' trading. At the time the company announced that it would halve its dividend payments and close almost half of its Currys stores to cut costs.