On 27 June 2013 the Group acquired the remaining 40% of Electro
World lç ve Dı Ticaret A. (Electroworld Turkey) for TL 2 (GBP1) in
cash, bringing its stake in EW Turkey to 100%. The Group
subsequently sold this business on 31 October 2013. On 7 August
2013 the Group acquired the remaining 0.8% of PIXmania S.A.S.
(PIXmania) for EUR0.6 million (GBP0.5 million) in cash, bringing
its stake in PIXmania to 100%. The Group subsequently also sold
PIXmania on 31 December 2013. Both disposals are described further
in note 8.
Notes to the Consolidated Financial Information
1 Basis of preparation
The financial information, which comprises the consolidated
income statement, consolidated statement of comprehensive income
and expense, consolidated balance sheet, consolidated cash flow
statement, consolidated statement of changes in equity and extracts
from the notes to the accounts for 30 April 2014 and 30 April 2013,
has been prepared in accordance with the accounting policies set
out in the full financial statements and on a going concern basis.
The directors have considered the Group's strategy and risks to
achieving objectives which are set out in this announcement,
together with its liquidity and funds position. Having concluded
that the Group has adequate resources to continue in operational
existence for the foreseeable future, the directors have continued
to adopt the going concern basis in preparing the financial
statements.
The financial information set out in this announcement does not
constitute statutory accounts within the meaning of Sections 434 to
436 of the Companies Act 2006 and is an abridged version of the
Group's financial statements for the year ended 30 April 2014 which
were approved by the directors on 26 June 2014. Statutory accounts
for the year ended 30 April 2013 have been delivered to the
Registrar of Companies, the auditor has reported on those accounts,
their report was unqualified and did not contain statements under
Section 498(2) or (3) of the Companies Act 2006. Statutory accounts
for the year ended 30 April 2014 will be delivered in due course.
The auditor has reported on those accounts, their report was
unqualified and did not contain statements under Section 498 of the
Companies Act 2006.
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU, IFRS issued by the International Accounting
Standards Board and those parts of the Companies Act 2006
applicable to those companies reporting under IFRS.
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiary undertakings for the
year ended 30 April 2014.
The directors consider that the 'underlying' performance
measures, together with the associated Income Statement
presentation, provide additional useful information for
shareholders on underlying performance of the business, and are
consistent with how business performance is measured internally.
Such measures exclude the trading results of businesses exited,
impact of amortisation of acquired intangibles, net restructuring
and business impairment charges and other one off, non-recurring
items, profit on sale of investments or businesses, net interest on
defined benefit pension schemes, fair value remeasurements of
financial instruments and, where applicable, discontinued
operations. These measures may not be directly comparable with
'adjusted' profit measures used by other companies.
2 Segmental analysis
The Group's operating segments have been determined based on the
information reported to the Board. This information is
predominantly based on geographical areas which are either managed
separately or have similar trading characteristics such that they
can be aggregated together into one segment. The Group evaluates
each operating segment based on underlying operating profits which
excludes those items described in note 1.
On 5 September 2013, 10 October 2013 and 27 September 2013, the
Group announced the sales of its Electroworld Turkey, Unieuro
S.p.A. (Unieuro) and PIXmania S.A.S. (PIXmania) operations which
subsequently completed on 31 October 2013, 29 November 2013 and 31
December 2013, respectively. All three businesses have been
classified as discontinued operations and hence are now excluded
from the reportable segments listed below. Electroworld Turkey and
Unieuro were previously reported within the Southern Europe segment
(which is now renamed 'Greece' to reflect its sole constituent).
Further information on these sale transactions is set out in note
8. In addition, on 16 May 2014, the Group signed an agreement to
sell its Electroworld operations in the Czech Republic and
Slovakia. Accordingly these businesses have been classified as
discontinued operations and excluded from the reportable segments
listed below with the balance sheets being treated as assets held
for sale as at 30 April 2014. As a result, the 'Northern Europe'
division has been renamed 'Nordics'.
All segments are involved in the multi-channel sale of high
technology consumer electronics, personal computers, domestic
appliances, photographic equipment, communication products and
related financial and after sales services. The principal
categories of customer are retail, business to business (B2B) and
online.
The Group's reportable segments have been identified as
follows:
-- UK & Ireland comprises electrical and computing retail
chains as well as in-store B2B activities. The division is engaged
predominantly in multi-channel retail sales, associated peripherals
and services and related financial and after sales services. The
division also includes operations in airports across Europe (the
majority of which are in the UK), all of which are managed from the
UK.
-- Nordics operates in Norway, Sweden, Finland, Denmark,
Iceland, Greenland and the Faroe Islands. The division engages in
multi-channel retail sales and provides related product support
services to its customers. It also engages in B2B sales of computer
hardware, software and services. Across the region, the division
operates a successful franchise business, typically in smaller
markets.
-- Greece comprises retail sales (including multi-channel sales)
and provides related product support services to its customers. In
addition, it engages in B2B sales of computer hardware, software
and services and also has franchise operations.
Businesses exited: in respect of PC City Spain because of
the closure rather than disposal of these operations, they do
not meet the definition of discontinued operations as stipulated
by
IFRS 5. Equanet was sold rather than closed, however, because it
did not form a major line of business under the definitions of IFRS
5, it also did not meet the definitions of discontinued
operations.
2 Segmental analysis (continued)
(a) Income statement
2013/14
----------- ----------- ----------- ----------- -----------
Underlying Inter- Total Underlying Total
external segmental underlying profit profit
revenue revenue revenue / (loss) / (loss)
GBPmillion GBPmillion GBPmillion GBPmillion GBPmillion
------------------------------------------------- ----------- ----------- ----------- ----------- -----------
UK & Ireland 4,148.6 66.9 4,215.5 141.0 133.9
Nordics 2,789.8 3.3 2,793.1 116.9 111.5
Greece 279.2 - 279.2 (10.5) (11.5)
Eliminations - (70.2) (70.2) - -
------------------------------------------------- ----------- ----------- ----------- ----------- -----------
Results before central costs and property losses 7,217.6 - 7,217.6 247.4 233.9
Central costs (19.2) (19.2)
Property losses (25.4) (25.4)
------------------------------------------------- ----------- ----------- ----------- ----------- -----------
Operating profit 202.8 189.3
Finance income 2.9 2.9
Finance costs (39.5) (59.3)
------------------------------------------------- ----------- ----------- ----------- ----------- -----------
Profit before tax for the year 166.2 132.9
------------------------------------------------- ----------- ----------- ----------- ----------- -----------
Total external revenue for the Group of GBP7,217.7 million
includes GBP0.1 million relating to businesses exited.
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