PC World and Currys owner beats analysts' expectations with strong performance in UK and Ireland
Dixons Retail said it was on the road from "survivor to winner" as it benefited from the explosion of tablet sales and gained market share following the collapse of its rival Comet.
The owner of PC World and Currys said it was boosted by a strong performance in the UK and Ireland in the year to 30 April, with sales up 7% as televisions, white goods and tablets were popular purchases.
Pre-tax losses narrowed to £115.3m from £118.8m a year earlier, and the retailer said underlying pre-tax profit rose 15% to £94.5m once the impact of restructuring its troubled European online PIXmania business was stripped out.
Dixons ended the year with £42.1m of net cash, having started it with £104m of net debt. The return to a cash-positive position was a year earlier than expected, and "an important psychological milestone" according to the chief executive, Sebastian James.
Shares rose 2.6% in early trading after the results beat analysts' expectations.
James added: "We have returned to growth for the group as a whole, and also to a net cash position, marking an important milestone in our transition from survivor to winner.
"I am pleased with the progress we have made, even though I am, of course, impatient for us to achieve even more, even faster, particularly in focusing on markets where we are, or can be, a leader."
Group sales rose to £8.44bn in the full year from £8.19bn, and James said there were "glimmers" of hope for retailers although the economic backdrop remained tough.
He said less than a third of UK households owned a tablet device, leaving a lot of room for further sales and "another big tablet Christmas" in 2013.
The retailer has taken around a third of Comet's business since it went into administration in November, and James said he was confident those customers would be retained.
He considered a 4% drop in sales in southern Europe "pretty robust", particularly as the bulk of its sales are in Italy and Greece, which remain mired in financial crisis.
"Dixons continues to gain more than its share of the Comet business and eliminates losses overseas. There is also the added bonus of cash on the balance sheet a year earlier than expected," said Philip Dorgan, analyst at Panmure Gordon. "We retain our buy recommendation."
Group costs fell by £45m during the year, part of a two-year drive to reduce costs by £90m.
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