DSGi, which operates Currys and PC World, has announced early today that it will scrap its dividend after revealing a pre-tax loss of nearly £30 million for the six-month period ending 18th of October and blamed weak "trading conditions" across its key markets.
The company's share have now lost more than 85 percent of their value since the beginning of the year in what looks to be a miserable 2008 for its shareholders. They currently stand at 13 pence, down 7.14 percent, and highlight how vulnerable DSGi situation has been.
The group's sales actually increased by 3 percent to £3.47 billion but gross profit margins suffered after seeing rising raw material and operating costs.
One of its main rivals, Carphone Warehouse, lost only 8 percent in the last 30 days while DSGi lost nearly 46 percent of its value over the same period. Last year, the company made profits of £52.4 million and has been implementing a number of restructuring and cost cutting steps.
Earlier this year, they did announce that they would be closing down 77 under-performing Currys.digital stores. And DSGi, which has nearly £150 million worth of debt, is not only facing tough and volatile trading environments but also fiercer competitors.
Supermarkets like Asda, Tesco or Sainsbury's have already been encroaching on DSGi's historical segment and have been selling discounted electronics and computers while Carphone Warehouse and its US partners, Best Buy, have already announced that they will be opening 100 new stores in the UK.