DSGi Business sales down by a third

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DSGi Business sales down by a third

Paul Kunert

DSGi Business has seen its sales dive by almost a third in the first half of fiscal 2010, as the parent reported a dip in revenues and flat losses.

The UK giant DSG International turned over £3.33bn in the 24 weeks ended 17 October, down 4% on a like-for-like basis compared to the same period last year while underlying losses before tax were £17.6m compared to £17.7m.

However the reseller unit - PC World Business, Equanet and retailers Macwarehouse and Microwarehouse - was set aside for special mention, as the sales fall dragged down the UK Computing division, which also includes PC World.

"PC World's sales have been impacted by very weak B2B sales in DSGi Business both direct and in-store," the firm said in an interim statement this morning.

"DSGi Business sales were down 32% at £103.2m, as the recessionary economic environment has resulted in business customers delaying purchases of IT," it added.

This was almost twice the rate of the 17% revenue decline in the UK Computing division to £581m. PC World retail store sales fell 12% to £477m as customers delayed PC spending in anticipation of Windows 7, which did lift sales post launch.

The UK and Ireland Electricals division saw a 9% fall in sales to £1bn as the Transformation and Renewal programme - reformatting stores - continues.

Pixmania and Dixons.co.uk went up to £324.4m from £275.6m a year earlier.

Total revenues in the UK and Ireland fell 11% to £1.6bn, while like-for-like sales in the Nordics were up 16% to £798m while the International operation - Italy, Greece, Spain, Turkey, Czech Republic and Slovakia declined 11% to £586m.

The firm said it remains on track to cut costs by £50m this year, as part of a four year programme that aims to hack off a total of £200m. It is also seeking to reduce its inventory levels by £80m to £130m through a range of measures.

The closure of non-core operations on the continent has now been completed with the Polish business downing its shutters.

In the last year DSG Business has been hit by cuts to credit insurance but working capital improved to £107m, compared to £62m in fiscal 09 primarily due to stock terms and the negative impact of the first credit insurance changes made a year ago.

Group net debt was £178m, compared to £149.5m a year ago.

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