The shares of Dixons (LSE: DXNS) dropped 4% to 49p this morning as investors took profits following encouraging half-yearly results for the electronics retailer.
Dixons, which owns Currys and PC World, revealed its UK & Ireland like-for-like sales were 9% higher than last year at £1.8bn. Underlying profits for the region improved from £7m last year to £31m, helped largely by the collapse of rival Comet last year.
After disposing of unprofitable businesses in Turkey and Italy over the period, Dixons-owned Elkjøp Group enjoyed another year of record sales in northern Europe. While competitive pressure caused profits from the region to falter slightly, at £45m, this region remains the most lucrative for Dixons.
Chief executive Sebastian James however struck a cautionary tone with his outlook:
“We remain cautious about the outlook for consumers in our markets; very strong trading this time last year, together with the fact that we have now annualised Comet’s exit makes the second half more challenging. Nevertheless, we have had a great first half and our stores have never looked better – or had better offers for customers”
With a market cap of £1.8bn, Dixons is valued at 16 times its forward earnings, and offers no dividend.
Of course, whether there’s still value to be unlocked at Dixons is for you to judge for yourself.
