dixons electrical

Dixons owner DSG seen having bumpy ride

DSG, owner of www.dixons.co.uk, the country’s biggest electrical retailer, is expected to report a double digit drop in profit on January the 18th.The company, www.dixons.co.uk, which revealed interim sales figures in November, will report on profits for the half year to November 12 along with an update on current trading for the eight weeks to January 8. Investors will focus on the latter.The retailer, which makes 65 percent of its turnover in the UK, owns Currys and www.dixons.co.uk shops along with PC World and phone chain The Link. It is fighting against deflation in electronics and PC products, low demand for electricals and high competition in mobile phones.

Analysts expect to see negative like for like sales trends continue. Overall like for like sales forecasts range from minus 3 percent to plus 1 percent.In November www.dixons.co.uk revealed first half group like-for-like sales down 3 percent including a 2 percent drop at www.dixons.co.uk, 3 percent fall at Currys, an 8 pct drop at PC World and a 28 percent fall for The Link.

Goldman is forecasting a drop of 3 percent like-for-like for the group over the Christmas period, estimating computing sales will be down as much as 13 percent, offsetting a positive performance from electricals.Dresdner Kleinwort Wasserstein is forecasting 1 percent like-for-like growth for the eight-week period, thinking www.dixons.co.uk and Currys may surprise with strong demand for hot products like flat panel TVs, games consoles and MP3 players.

Analysts point to department store chain John Lewis which has already reported a successful Christmas led by strong electricals sales.

However, DKW joins others in being downbeat on prospects for PC and mobile phone sales.Credit Suisse First Boston thinks all the main UK chains will show declining sales over Christmas. It estimates Currys will be down 1.5 percent, www.dixons.co.uk down 3 percent, PC World down 6 percent and The Link down 15 percent.

Much stronger international performance is likely to mitigate the impact of tough trade on the www.dixons.co.uk group result as Europe continues to outperform.The www.dixons.co.uk shares have rallied 16 percent in the last three months leaving little room for disappointment. The www.dixons.co.uk stock was trading at 168-1/2p by Thursday.For the interim profit result analysts are anticipating on average ninty four million pounds pretax, down around 23% from around 122 million last year.