PC World-to-Currys owner Dixons Retail (DXNS) is among the market's leading lights, up 9% to 48.25p as investors welcome news of non-core disposals. Besides this well-received corporate housekeeping, confirmation of ongoing brisk business is fostering positive sentiment towards the stock.
Tablets-to-televisions seller Dixons Retail has received an offer for its struggling online subsidiary PIXmania from Mutares (MUX:GR), a German listed industrial group with a track record of turnarounds. If the deal, which will see Dixons provide the best part of €70 million cash to support Mutares' recovery plan and provide France-based PIXmania with ongoing funding, does proceed, Dixons will be getting shot of a loss-making operation whose like-for-like sales slumped 28% in the first quarter to 31 July.
'In order to succeed as a pureplay e-tailer,' says Dixons chief executive officer Sebastian James, 'PIXmania needs a different kind of entrepreneurial vigour. I am therefore delighted that we have found a potential solution that offers the prospect of a good future for PIXmania outside the Group.'
In a further bit of portfolio tidying, the £1.6 billion cap also announces the sale of its loss-making ElectroWorld business to Istanbul-listed Bimeks (BMEKS: TI), one of Turkey's major electrical retailers, for £2 million in cash.
Dixon Retail, a running Shares Play of the Week, smashed profit forecasts by growing taxable profits 15% to £94.5 million in the year to April, during which it returned to a net cash position. Today, James reports encouraging 6% growth in UK and Ireland like-for-like sales. This result was achieved despite 'an unusually-sunny July' and tough comparable figures following last year's summer of sport, with the exit of Comet and Best Buy from the UK market providing a tailwind alongside the success of its Knowhow technology expertise and repairs service.
Dixons Retail continues to mop up market share, although the electronics retailer still faces stiff competition from web-based rivals, notably Amazon (AMZN:NDQ). Away from home turf, Northern Europe (the Nordics and Central Europe) saw same-store sales rise 5% driven by further market share gains, although Southern Europe (Italy and Greece) remains a trouble spot, with like-for-like sales down 12% in the first quarter.