Electrical retailer Dixons has posted a half-year loss of £79.5 million, compared with a £2.4m profit a year earlier, but blamed it on the £45.2m writedown it was forced to make on gadget subsidiary Pixmania.
Sebastian James, group chief executive, remained bullish about the results, suggesting good progress had been made on its three strategic priorities of driving a sustainable business in a multi-channel world, building on its market positions and sharing best practices across the group.
Sales at stores open more than a year rose 3% in the period, driven by a strong consumer demand for tablets and smart televisions before a summer of sporting events. Group sales were £3.29 billion.
"We have significantly reduced net debt, successfully undertaken a £150m bond issue and delivered good underlying profit growth in the UK and northern Europe," James said.
"We have also improved our performance in southern Europe and having now assumed full day to day control of Pixmania, we are taking actions to improve its poor performance."
August and September were, as expected, a quiet sales period, but Dixons remains "cautiously optimistic" about the outlook, not least because one of its biggest rivals - Comet - is in financial meltdown.
Dixons, which is also home to the Currys and PC World chains, bought 77% of Pixmania in 2006 but had to write down the value it 2011 after poor performance.
Pixmania's like-for-like sales were down 7% to £198m in the first half, compared with £234m for the same period last year.
The retailer now plans to cut costs and reduce the company's complexity.
Dixons also closed its retail website dixons.co.uk in October, as customers were happily using PC World and Currys' sites instead.
PC World and Currys offer new responsive websites which recognise how users are interacting with their sites, designed to work across all browsers and devices, automatically resizing to fit the space provided.
The hope is this will help to future-proof Dixons Retail's online proposition as any changes or improvements will only need to be performed on one site.
Bricks and mortar operations of Dixons were rebranded to Currys Digital in 2006, but currently the retailer plans to retain the brand in travel shops in airports.
Nick Hood, insolvency specialist at Company Watch, told Huff Post UK the demise of Comet was already delivering an upside for Dixons as the UK/Irish business was returning to profit for the first time in five years.
“But the group is still losing money overall at the operating and pre-tax profit level, so the turnaround has a way to go yet and the balance sheet needs bolstering," he added.
"Dixons has negative working capital and is heavily reliant on ordinary trade finance, which as JJB Sports and Comet have discovered to their cost can be an uncomfortable place to be. It is also carrying a heavy burden of intangible assets, equal to almost twice its total net worth.
“We calculate health scores based on published accounts, comparing companies' actual results with seven key financial ratios on profitability, assets and funding to rate their financial strength. Dixons is sitting close to the bottom of our warning area with a H-Score of only 4 out of a possible 100 and has been there ever since 2008."Suggest a correction