Currys owner goes into the red again

DSG International recorded a deficit of £140m last year, after losing £184m the previous year. Overall revenues were £8.4bn, with same store sales slumping by 11 per cent in the UK and Ireland. The weak sales figures led to an 80 per cent collapse in group profits to £50.5m, with an exceptional cost of £190.9m taking the group into loss. The charge was for closing 22 outlets worldwide as the group attempts to restructure its operations.

Chief executive John Browett is spearheading the company's restructuring strategy, most successful of which is the move to 'hybrid' stores, combining its PC World and Currys formats into one. It is also putting other measures into operation to make its existing operations more attractive shopping locations. Others, however, are being closed, with 60 Currys.digital shops to be shuttered when their leases come to an end, as the group cuts its High Street store presence.

The chain's woes echo those of Comet owner Kesa which itself announced an £81m loss the day before and talked of poor trading conditions continuing. As a result of its problems DSG will not pay a dividend this year or next year as it puts its cash into refurbishing its stores and struggles with a growing debt pile and a surging pension fund deficit.

WHAT THEY ARE SAYINGRichard Hunter, head of UK equities at Hargreaves Lansdown, in the Guardian: The recent rights issue will underpin DSG's capital position and the revamping of its stores seems to be having a positive impact on margins. On the other hand, the management outlook is cautious and any prolonged deterioration in the wider economy will continue to stress the business model.

John Stevenson, analyst at broker KBC Peel Hunt, in the Daily Mail: DSG has announced profit ahead of our expectations. The uplift in gross profit from refurbished stores remains in keeping with previous data. DSG has the potential to deliver a material improvement in profitability. ·