Yearly figures next week a mixed bag
Analysts have forecast that Dixons Group's year-end results next week will show a weakness in UK trading offset by growth in European sales. They are predicting a profit before tax for the group of£340 million. However the group's UK businesses will see gains from Dixons offset by shrinking markets at The Link and PC World.

Investec analyst Mark Charnock expects a fall in UK profits before tax of 31 per cent over the year, mainly caused by weak UK trading in the second half of the year.

Charnock said: 'Dixons Group's overall longer-term prospects have probably been improved by the recent Russian deal, but ever-contracting net margins in the UK mean further potential downgrades could be significant in the short term. Given that the UK threats are more about the competition and fundamental market changes, even an end to weak retail markets may not mean an end to [Dixons'] UK retail profits contraction.'

Evolution analyst Nick Bubb also noted how gains in parts of the UK business are likely to be cancelled out by losses in others. He said: 'Dixons in the UK is usually looked at on a top-down basis, but it's the sum of four parts, albeit rarely all moving together. The group is fortunate that its weakest business The Link is also the smallest and that they only own 60 per cent of it. Dixons itself is doing a bit better on the back of new marketing and under new management, and Currys has good momentum, although severe PC price deflation is making it hard for PC World to make headway.'

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