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No turnaround at DSGi Business in fiscal 2010

Microscope contributor

DSG International showed real progress in financial results filed this morning but the turnaround in its PC World and B2B reseller division has yet to materialise as sales continued to slide.

Underlying group grew sales were up 4% to £8.51bn or 2% on a like-for-like basis and profit before tax climbed a whopping 61% to £90.5m, clearly helped by a £50m reduction in costs already made, part of the plan to cut out £200m.

John Browett, chief executive at DSGi, which is changing its branding to Dixons Retail, said he was pleased with strides the company had made in the past year to "transform the group, despite the recessionary environment."

In the UK and Ireland heartland, total sales fell 5% to £4bn and like-for-like sales were down 3% as the economic environment "remained challenging".

However, it was the UK Computing unit, which comprises PC World, Tech Guys, DSGi Business - Equanet, PC World Business and its online brands- that let the side down, with sales falling 13% to £1.36bn.

Revenues at the UK and Ireland Electricals division, which includes Currys, Currys Digital and Dixons Travel were flat at £2.65bn.

"DSGi Business experienced an extremely challenging trading environment as smaller businesses reduced capital expenditure during the credit crunch," the group said in a statement.

"The new management team is focused on managing costs and cash. The B2B operations are well placed to benefit when small businesses restart investment as the economic environment improves," it added.

The Nordics operations grew sales 29% in constant currency to £2.1bn, but revenues at other international businesses - Italy, Greece, Spain, the Czech Republic, Slovakia and Turkey - fell 5% to £1.5bn.

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