Dixons group losses widen despite improved UK performance

Singer analyst Matthew McEachran said the group loss figure was £5m “better than feared”.

Underlying group gross margins edged down 0.6%, while in UK & Ireland they grew 0.2%.

Group like for likes fell 5% while total underlying group sales were up 1% to £3.29bn.

UK & Ireland underlying operating losses were reduced from £10.7m to £3.9m in the half. Like-for-likes slumped 8% but fell 5% in the second quarter, “showing an improving trend through the half”.

Domestic total sales were down 5% to £1.5bn.

The Currys and PC World owner said it grew share “across most markets, particularly in the UK and Nordics”.

It said its £60m cost reductions programme is “on track for the current year” as part of the three year £150m cost reduction programme.

Dixons chief executive John Browett said: “Our focus on building a service-led business model is differentiating our offer for customers and suppliers. 

“In what remains a challenging environment, the pace and impact of improvements in our operating model is driving outperformance versus our competitors and market share gains.

“While we remain cautious about the economic outlook for the second half of the year, we are well positioned and remain focused on delivering world-class Value, Choice and Service for customers.  

“We will continue to build our KNOWHOW service to further differentiate our offering. We are confident that customers will benefit from fantastic festive deals across an exciting range of technologies from our knowledgeable store colleagues this Christmas.”

McEachran said: “Management remain cautious about H2 prospects, and we highlight an increased threat from Tesco in particular, but it is clear the transformation plan is winning share back.”

The electricals market has had a tumultuous few weeks, with Best Buy revealing it is to pull out of the UK and Comet being acquired by OpCapita.