DSGi?

[andy-xr]

Yesterday MFI and Pick N Mix, today I'm hearing DSG isnt looking too hot either.

I'm presuming PCWB and other associated resellers off the High St (or should that be retail park) are doing well, it's just the consumer stuff

Anyone hearing anything positive about them rather than doom n gloom?

[ehyouwhat]

They have hundreds of millions of pounds securely held, so I think they'll be fine. They also intend to sell Nordic and European business interests over the next twenty-four months in order to match their ongoing business model. In addition, a change to WNR (Winning New Revenue) store formats is proving very profit-rich, as is the new FIVEs selling model.

Not that I have a vested interest, or anything.

[AndyWoodall]

I suspect they'll survive, but they have to ditch the European bits which just don't help matters.

I have an intense dislike for Pukwerld, but you must admit that on the 'high st' they have little competition for most shoppers should you want to browse different makes and models. You can get stuff cheaper at tesco and online, but should you want 'advice' and to have a play on them before you buy they are the only game in town really.

[ehyouwhat]

I should add though that I expect the press to really hammer DSGi tomorrow, with some of the tabloids claiming Currys/PC World or even DSGi as a whole entity will be the "next to go". They will ignore the fact that DSGi is the market leader and the most developed player in the sector.

DSGi staff actually received a statement today which, to shorten and paraphrase, said "chin up!"

All fun and games.

[Plotloss]

ehyouwhat said:

They have hundreds of millions of pounds securely held, so I think they'll be fine. They also intend to sell Nordic and European business interests over the next twenty-four months in order to match their ongoing business model. In addition, a change to WNR (Winning New Revenue) store formats is proving very profit-rich, as is the new FIVEs selling model.

Not that I have a vested interest, or anything.

If they have hundreds of millions in the bank why is their market cap just over £220m total? If they had anything worth taking, they would have already been corporate raided.

They've posted a massive loss and will rightly take a hammering.

They've also come up against similar issues to Woolies with their suppliers.

I expect them to take an absolute panning and if they go under it will be no great loss, they've essentially systematically fked the AV market through years of employing ignorant children with no experience to sell high ticket items to the easily led.

Edited by Plotloss on Thursday 27th November 19:35

[ehyouwhat]

Plotloss said:

If they have hundreds of millions in the bank why is their market cap just over £220m total? If they had anything worth taking, they would have already been corporate raided.

They've posted a massive loss and will rightly take a hammering.

They've also come up against similar issues to Woolies with their suppliers.

I expect them to take an absolute panning and if they go under it will be no great loss, they've essentially systematically fked the AV market through years of employing ignorant children with no experience to sell high ticket items to the easily led.

Edited by Plotloss on Thursday 27th November 19:35

So far the group has dipped £100million into a secured £400million credit facility, with trading at converted stores showing progressive profit. Given the costs involved in converting stores to Peak Traders or WNR models, I'm suprised the losses aren't higher. Every store will be converted in the next three years, and stores that do not fit in with this model will be closed (I would estimate around a quarter of stores will simply be closed). Add this to revenue from pending European and Nordic sales in the New Year and I have absolutely no worries for the immediate future of the company in general.

That said, I'm sure the company will be heavily panned by many over the next few days, especially by those with no real sense of the particulars of the new business model. The proof will be, as they say, in the pudding!

I do agree however that product training for the business has been somewhat lacking, and that this has been the case for many years. That is changing slowly but surely.

[Plotloss]

News said:

For the six-month period, the company's statutory loss after tax and restructuring charges was GBP 41.0 million, compared with a profit of GBP 37.3 million last year. Statutory loss per share reached 2.3 pence, in comparison with a profit per share of 2.0 pence in the prior year.

Pre-tax loss for the period was GBP 61 million, compared with a pre-tax profit of GBP 51.4 million last year.

The company also reported underlying pre-tax loss for the 24-week period of GBP 29.8 million, compared with underlying pre-tax profit of GBP 52.4 million a year ago. Underlying loss per share totaled 1.0 pence for the period, whereas, it was profit per share of 2.0 pence in the prior-year period.

The underlying results exclude amortization of acquired intangibles of GBP 2.0 million, net restructuring charges of GBP 27.8 million and non-underlying finance charges of GBP 1.4 million relating to the net fair value remeasurement gains on revaluation of financial instruments as required by IAS 39, the company noted.

DSG's six-month sales rose 3% to GBP 3.47 billion from last year's GBP 3.38 billion. Group's like for like sales were down 7%. Excluding the effects of significant movements in exchange rates, total group sales were down 4% in constant currency.

They are now also faced with the effects of a falling pound against the yen meaning that prices will rise sharply next year and a complete review of their credit facilities by all suppliers trade credit insurance, some of which will be cut severely I suspect.

They might not disappear altogether but they're ripe for takeover and I strongly suspect that they will ditch both PC World and Currys if they wish to continue trading.

They've pissed 50% of their market cap as it stands today away in 12 months.

ETA: They've also just announced that they wont be paying a dividend for the next 3 years.

Edited by Plotloss on Thursday 27th November 20:04

[ehyouwhat]

Plotloss said:

News said:

For the six-month period, the company's statutory loss after tax and restructuring charges was GBP 41.0 million, compared with a profit of GBP 37.3 million last year. Statutory loss per share reached 2.3 pence, in comparison with a profit per share of 2.0 pence in the prior year.

Pre-tax loss for the period was GBP 61 million, compared with a pre-tax profit of GBP 51.4 million last year.

The company also reported underlying pre-tax loss for the 24-week period of GBP 29.8 million, compared with underlying pre-tax profit of GBP 52.4 million a year ago. Underlying loss per share totaled 1.0 pence for the period, whereas, it was profit per share of 2.0 pence in the prior-year period.

The underlying results exclude amortization of acquired intangibles of GBP 2.0 million, net restructuring charges of GBP 27.8 million and non-underlying finance charges of GBP 1.4 million relating to the net fair value remeasurement gains on revaluation of financial instruments as required by IAS 39, the company noted.

DSG's six-month sales rose 3% to GBP 3.47 billion from last year's GBP 3.38 billion. Group's like for like sales were down 7%. Excluding the effects of significant movements in exchange rates, total group sales were down 4% in constant currency.

They are now also faced with the effects of a falling pound against the yen meaning that prices will rise sharply next year and a complete review of their credit facilities by all suppliers trade credit insurance, some of which will be cut severely I suspect.

They might not disappear altogether but they're ripe for takeover and I strongly suspect that they will ditch both PC World and Currys if they wish to continue trading.

They've pissed 50% of their market cap as it stands today away in 12 months.

ETA: They've also just announced that they wont be paying a dividend for the next 3 years.

Edited by Plotloss on Thursday 27th November 20:04

I think a number of Currys stores may well close, although I don't think DSG will cleanse itself of the company altogether. As for PC World, I'd be extremely suprised if DSG ditched them as they are very much a part of the future plans.

I think the big test for DSGi and indeed Kesa will be the introduction of Best Buy to the marketplace next year - they are looking at premises in and around the London area as we speak.