DSG's profits lose spark with 30% fall

DSG International, the owner of Currys and PC World, announced a 30 per cent drop in annual profits this morning, after what it admitted had been "a challenging year".

The electrical goods retailer, which also owns UniEuro in Italy and Elkjop in Nordic countries, said profit before tax and one-off items was £205.3 million in the 53 weeks to May 3.

That was down from £295.1 million for the previous year, but in line with market guidance.

The firm said in May that underlying profits were likely to come in between £200m and £210m, following two profit warnings earlier in the year.

Figures showed that its UK computing division was worst hit, with like-for-like sales down 5 per cent and underlying operating profits nearly halving to £63.2 million, following a large number of heavily discounted laptop deals designed to shift stocks.

Total UK computing sales, including PC World and The TechGuys support venture, were down 1 per cent at £1.8 billion.

Italy was its worst hit international operation, where like-for-like sales were down 11 per cent. The group is closing 43 stores in the country.

In their statement, DSG said: "The economic backdrop continues to be difficult and the group remains very cautious about consumer confidence in many of the markets in which it operates."

DSG has already begun a three year turnaround plan to change its fortunes, announcing in May that it would close 200 stores across the UK.

The transformation will also include store refits at Currys, PC World and Currys.digital, and cost savings at its head office.

The group operates more than 700 stores in the UK – more than 80 per cent of which are Currys and Currys.digital – as well as more than 500 across Europe.

DSG's new chief executive John Browett, who was brought in from Tesco at the end of last year, said:

"The Group is operating in a challenging environment.

"We have lots of opportunities to improve performance and build on the Group's many inherent strengths as a leading specialist electrical retailer.

"We are working very hard on executing our five point plan that will renew and transform the business over the next three years."