Dixons gets £300m debt boost

The electronics retailer has managed to squeeze a bigger overdraft out of its banks, and sales are up. Is it back on an even keel?

by Michael Northcott
Last Updated: 19 Aug 2013

The consumer electronics retailer has won another chance with a syndicate of banks thanks to a new lending facility that will not mature until June 30 2015. Investors rallied to the retailer with shares rocketing more than 7% - they know that if the finance agreement had not been updated then the current deal was due to mature next year. 

But if you’re an investor, there is reason to get on board with Dixons, which has just announced some healthy financial results. After a big TV advertising campaign for its Currys/PCWorld chain, and having started to stock Apple’s iPad, the group’s annual like-for-like sales jumped 3%. Even better, its annual statutory growth in Northern Europe was 11%, which given the current economic circumstances, and the difficulties Dixons has faced with online competitors in recent years, is pretty impressive. 

The European figures do have an element of smoke and mirrors to them however, as gross margins in Northern Europe were actually down 0.5%, whilst UK margins remained flat. Nonetheless, growth is growth, and underlying full-year profits for the group were £70m.

It’s also good to know that chief executive Sebastian James is in good spirits. He signed off his comment on the financial results saying: ‘Overall, though, our business is in a strong position for the year ahead and we are looking forward to an exciting summer of sporting activities and celebrations.’ That Diamond Jubilee flotilla will doubtless be a beautiful sight, Seb.

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