Profit warning for DSG

03-01-2008

Profit warning for DSG
The parent company of electrical retailers PC World and Currys has issued a profit warning after announcing poor sales.

DSG International says that a bad Christmas in terms of laptop purchases has helped bring about poor trading in the 11 weeks before December 29th.

In its interim trading statement today, the firm says it now expects full-year profits to be between £40 and £50 million less than initially forecast.

Like-for-like gross margin across the group was down 0.3 per cent, a fall the firm puts down to "promotional activity in weaker consumer environments".

"Total group sales were up five per cent, however like for like sales were down one per cent reflecting generally weaker consumer environments across many of our markets," DSG chairman Sir John Collins said.

"Overall trading for this important period, in which over half our annual profits are usually generated, has been disappointing, particularly in the UK, Italy and Spain.

"This weaker trading, together with a more cautious outlook for the balance of the year, means that we now expect full year profits before tax to be some £40-£50 million lower than current expectations."

Sir John added that, despite stronger demand in the post-Christmas sale period, UK computing sales were "very disappointing" with lower demand for laptops and accessories before Christmas.

Following the disappointing announcement, DSG shares were down by 22 per cent at lunchtime on the London Stock Exchange.

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