World Cup fever brightens the picture at DSG

Click to follow
The Independent Online

Currys, the electrical retailing chain owned by DSG, is selling a flat-screen television every 15 seconds as the public prepares for the World Cup this summer.

The boom in television sales led DSG to tell the City yesterday to raise its profit forecasts for the group. Shares in Britain's biggest electrical retailer soared 7 per cent after it said an improved second half, in the main due to strong demand for the latest televisions but also thanks to strong sales of MP3 players and laptops, would help its annual results beat City expectations.

DSG, which makes two-thirds of its profits in the UK via chains such as Dixons and Currys, said second-half flat-screen television sales were up by more than 100 per cent.

John Clare, DSG's chief executive, said: "Currys is selling one flat-screen TV every 15 seconds. I expect this rate to rise as we get closer to the World Cup."

Further into the future, he predicted that the boom in the UK television market would be supported by the switch-off of the analogue signal, which starts in 2008. But Mr Clare suggested a slowdown in the growth rate is inevitable after the World Cup, which starts on 9 June.

Total sales in DSG's electricals division were up 11 per cent in the second half and up 9 per cent for the year as a whole. Overall, the group reported a 4 per cent rise in second-half like-for-like sales and told the City to expect underlying profits of between £312m and £318m for the year ending 29 April 2006. DSG shares closed at the top of the FTSE 100 leaderboard yesterday, up 13.5p at 207.75p. This is the highest close for the stock since the summer of 2002, when the last World Cup was held. Despite upbeat comments about solid demand for the latest gadgets, Mr Clare warned that the British consumer remains in a "fragile" state. He said: "My feeling is that the UK is still fairly fragile. There's still some nervousness about tax increases, council tax especially, and unemployment."

DSG, which launched a major drive into internet retailing last month, said it had enjoyed a significant jump in online sales with existing e-commerce operations growing at about 50 per cent per annum.

The Link, the group's chain of mobile phone shops, continued to underperform as growing direct sales by network operators and cheap competition from supermarkets took their toll. Second-half like-for-like sales dropped 21 per cent.