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15:30 - 15-May-2008
Chief executive John Browett, the former head of tesco.com who took over at DSG in December, cut the annual dividend in half as he outlined his vision for the firm. He also wrote off £395m of assets sending shares down 6¼p to 63p.
DSG, owner of Currys and PC World, has been rocked by falling sales and lowered its profits forecast twice this year. It today forecast profits for the year just ended of £200m to £210m - well below the £295m it made the previous year.
Browett, who at 44 is one of the youngest chief executives in the FTSE, unveiled his plans for 'renewal and transformation' of the business to reestablish its dominance in Britain's electricals market.
He said he will close as many as 77 of the 177 Currys.digital stores as leases expire and paved the way for job cuts at the head office in Hemel Hempstead, where analysts reckon around a quarter of the 1600 staff face the chop. DSG hopes to remove £50m of costs this year.
Browett pledged to focus the business on serving the customer better rather than just selling cheap laptops and televisions. He said: 'We have got to put this business through a major transformation. We are going to focus it absolutely on the customer. We are going to make it unrecognisable over the next three years. We will move from being about product and price to value, choice and service.'
However, he conceded the plan faced a difficult start because of the slowing economy. 'The economic backdrop makes it difficult to forecast business performance and we remain very cautious about consumer confidence in many of our markets,' he said. 'We are hoping for 2009/10 we will start to see some of the benefits feed through.'
DSG reported a 1% rise in like-for-like sales for the year to 3 May although sales in the second half were down 1%.
Browett warned that trading 'remains challenging'. He insisted he did not regret taking the job, which he was given in July despite not taking over till December. 'I like situations like this. There is a huge opportunity for the business. The fundamentals are still right. I'm absolutely enjoying this and really looking forward to making a major difference.'
The plans were given added urgency last week after American electricals giant Best Buy entered the UK market by buying a 50% stake in Carphone Warehouse for £1.1bn.
Browett said: 'When you have a quality company like Best Buy starting in the market it does cause you to move faster. That is the way I will use it, to do the things we need to do much quicker.'
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