Phones and computers give Dixons a surge

One of Britain's leading retailers shrugged off the gloom in the high street yesterday with a positive set of Christmas figures and a favourable outlook for 1995. Dixons, which includes the Currys and PC World groups of stores, said mobile phones and multi-media computers costing £1,200 had been selling well. Sales of televisions, fridges and washing machines had also been encouraging.

"Consumers are being careful with their money but with the housing market stagnant I think people have got some cash to spend on some bigger ticket items," one industry observer said.

Dixons said sales for the Christmas period and first two weeks of the January sale were 5 per cent up on last year and profits were also well ahead.

Dixons' chairman, Stanley Kalms, said: "We thought the multi-media computers would do well this year and we got it right. We've sold thousands of them. As for the mobile phones, they were being snapped up almost as soon as the stores got them. They have become the thing to have."

Dixons announced pre-tax profits of £26.6m for the six months to 28 November, up from £17.3m last year. Currys superstores and PC World both had a good six months. Dixons now has 12 PC World stores and plans to open two more at the end of the financial year. It plans a chain of 40.

Less encouraging were sales of computer games consoles, which slumped by more than 50 per cent over the year. Camcorder sales also shrank by 22 per cent. Mr Kalms said he expected the computer games market to enjoy a boost next year when Sega and Sony launch new 32-bit machines but felt the market would not see a return to the frenzied growth of two years ago. "These machines will be quite expensive and I think the big PCs will take over as you can do more things on them," he said.

Mr Kalms heavily criticised the regional electricity companies, which he said were unfairly subsidising their retail operations. He described their promotional activities as "profligate and uncommercial". He said: "The expansion of their retail activities could not be sustained without the cash flow generated from electricity distribution. Their shareholders will in due course have to pay a price."

Adjusted earnings per share rose to 3.7p from 1.8p at the interim stage and the interim dividend was raised slightly to 1.8p. The shares fell 1p to 200p.