£30m loss for PC World owner

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The Independent Online

The owner of Currys and PC World today continued a grim week for the high street's biggest names after plunging almost £30 million into the red.

DSG International posted underlying losses of £29.8 million in the 24 weeks to 18 October - compared with a £52.4 million profit the previous year.

The firm warned of a "tough and volatile" retail climate as like-for-like sales across the group fell 7 per cent over the period.

The firm's losses come in a week which has seen fellow retailers Woolworths and MFI fall into administration as a looming recession squeezes shoppers.

DSG said it was "prepared for a recessionary environment" but the firm, which makes the bulk of its profits over Christmas, added that the outlook was uncertain for its peak trading period and the whole of 2009.

Currys and Currys.digital saw lower customer footfall during the first half with hard-pressed consumers shunning spending on big-ticket items as economic gloom mounted and property prices tumbled.

"The white goods market has been impacted by slowing housing transactions," the group said.

Despite price-cutting to match internet competition and to clear its older stock, like-for-like sales fell 7 per cent as the division posted a £22.3 million operating loss.

Its UK computing division - including PC World - saw sales fall further still with an 11 per cent like-for-like decline, although the group said this was set against strong comparative trading last year.

There was some cheer as DSG's programme of store revamps under new chief executive John Browett's plans to put the firm on a stronger footing bore early fruit.

Stores opened under the new format for more than a month were trading up to 25 per cent ahead of the rest of the group, DSG said.

But the company is cutting back costs - including shareholder payouts and £30 million in capital spending - as it focuses on cash generation.

DSG also reassured over its financial position and remains well within banking covenants, with £300 million available at the end of the period.