Group plc interim results for the 28 weeks ended 15 November 2003

Dixons Group plc, Europe's leading specialist electrical retailer, today announces interim results.

INTERIM RESULTS

• Turnover increased by 21% to £3.1 billion (2002/03: £2.6 billion). • Group like for like sales up 1%; UK like for like sales were flat and International like for like up 3%. • Operating profit (including goodwill amortisation) increased by 15% to £102.4 million (2002/03: £89.4 million). • Profit before tax (excluding goodwill amortisation) increased by 9% to £105.7 million (2002/03: £97.1 million). • Profit before tax (including goodwill amortisation) increased by 9% to £103.4 million (2002/03: £94.8 million). • Basic earnings per share increased by 3% to 3.7 pence (2002/03: 3.6 pence). Interim dividend of 1.660 pence (2002/03: 1.510 pence), an increase of 10%. • On 24 November 2003, the Group successfully sold 48.4 million Wanadoo SA shares, raising ?310 million (£216 million) cash • On 8 December 2003, the Group disposed of its European property development business, Codic International SA for ?33 million (£23 million) cash.

CHRISTMAS TRADING

Group sales for the 8 weeks ended 10 January 2004 were up 12% in total and 5% on a like for like basis. In the UK, sales increased by 7% in total and 4% on a like for like basis. Sales in the International division increased by 28% in total and 7% on a like for like basis.

Sir John Collins, Chairman, commented as follows:

"The Group achieved solid results in the first half year, with good sales and profit growth in a challenging market. Performance in the UK has improved throughout the period and our International businesses have continued to make good progress.

The Competition Commission's 15-month long investigation into extended warranties has continued to absorb a significant amount of management time. We are encouraged that the final recommendations reflect many of the Group's longstanding policies and practices governing the sales of extended warranties, and that the Commission has concentrated on practical and proportionate measures to ensure the spread of best practice across the industry.

The successful disposal of Codic, on attractive terms, will allow the Group to focus on the development of our portfolio of strong retail brands.

Christmas sales in the UK have been in line with our expectations and our International businesses have continued to perform well. Despite continuing uncertainty over the economic environment in Europe, the Group is well placed for a year of further progress."

RESULTS AND DIVIDENDS

Shortly after the half year end, the Group disposed of its European property development business, Codic International SA. This business has accordingly been treated as a discontinued operation. For the 28 weeks ended 15 November 2003 the Group's total and underlying results, excluding these discontinued operations and goodwill amortisation, are as follows:

Total results Underlying results *

£ million % change £ million % change

Turnover 3,135 + 21% 3,101 + 21%

Operating Profit 102.4 + 15% 102.5 + 20%

Net interest receivable 1.0 - 81% 0.9 - 83%

Profit before tax 103.4 + 9% 103.4 + 14%

Basic EPS (pence) 3.7 p + 3 %

Adjusted diluted EPS (pence) 3.8 p + 9%

* excluding discontinued operations and goodwill amortisation

The Group's underlying turnover increased by 21% to £3,101 million (2002/03: £2,572 million) reflecting sales growth in all divisions and the full consolidation of UniEuro from the second half of last financial year. Excluding UniEuro, turnover increased by 9%. Group like for like sales were 1% higher.

The increase of 14% in underlying profit before tax to £103.4 million (2002/03: £90.8 million) includes £7.7 million of UK property profits (2002/03: £6.3 million).

Adjusted diluted earnings per share were 3.8 pence (2002/03: 3.5 pence), an increase of 9%. The lower rate of growth of earnings per share compared with pre-tax profit growth reflects an increase in the effective rate of taxation.

The directors have declared an interim dividend of 1.660 pence per share (2002/03: 1.510 pence), an increase of 10%, payable on 1 March 2004 to shareholders registered on 30 January 2004.

POST BALANCE SHEET EVENTS

On 24 November 2003, the Group sold a further 48.4 million Wanadoo SA shares. The shares were placed at a price of ?6.40 per share and raised ?310 million cash.

On 8 December 2003, the Group disposed of its European property development business, Codic International SA for ?3 million cash. The consideration was equal to the Group's share of the net asset value of Codic of ?37 million at 31 October 2003. As part of the transaction, the purchasers assumed ?42m of net debt

DIVISIONAL PERFORMANCE

UK RETAIL

The UK Retail division made an operating profit before goodwill amortisation of £81.6 million (2002/03: £77.9 million), an increase of 5%. Turnover in the period increased by 4% to £2,246 million (2002/03: £2,153 million), with flat like for like sales.

Gross margins increased by 0.1 percentage points. Improvements made in product margins were partially offset by a lower mix of Coverplan contract sales versus the same period in 2002/03 and lower margins. The division's cost to sales ratio was 0.1 percentage points worse. Strong progress was made in reducing payroll, service and central department cost ratios, which delivered 50 basis points of improvement. However, these benefits were offset by increased rental inflation and a higher level of advertising investment during the period.

PRODUCT MARKETS

The division's product markets grew in value terms by 3% overall. The brown goods market grew by 4% with strong growth in new technology products including plasma & LCD TVs, DVD players and digital photography. These growth categories were partially offset by lower sales of games consoles, VCRs and analogue photography. The white goods market grew by 4% with strong growth in small appliances and refrigeration. The overall computing market grew by 1%. The desktop and laptop market fell by 5%, but was more than offset by continued strong growth in both the PC peripheral and PC accessory markets.

The mobile phone market grew strongly with total connections up by an estimated 10% as a result of strong sales of entry level prepay connections. New contract connections declined slightly year on year.

CURRYS sales were £823 million (2002/03: £806 million), an increase of 2%. Like for like sales were flat. Good sales growth was achieved in digital photography, plasma and LCD TVs, personal computers and refrigeration. Sales declined in games, mobile phones and hi-fi products.

Currys' performance steadily improved throughout the first half as significant changes to ranging, merchandising, advertising and in-store operations were introduced. Currys continued to re-locate to larger out of town sites, opening or re-siting seven new stores during the period, taking the total number of stores to 380. New store openings included two large stores featuring an enhancement to the standard 'marketplace' design. Four further new stores are expected to open or resite during the second half of this financial year.

PC WORLD

Total PC World sales grew by 7% to £729 million (2002/03: £683 million) with flat like for like sales. There was strong growth in laptop PCs, TFT monitors and digital photography, although desktop PC sales were held back by a weak market. During the period, PC World implemented a number of important initiatives. These included an increased focus on ultra-thin laptops and wi-fi networking products, and an extended component centre offering. Nine new PC World stores were opened or re-sited during the half year, taking the total to 133. Five new stores are expected to open during the second half.

PC World Business sales grew by 5% to £99 million (2002/03: £94 million) with sales to small businesses through PC World stores particularly strong. The total number of actively traded accounts with PC World Business increased by 9% to 86,000 with continued strong growth in the Public sector.

DIXONS

Dixons sales at £392 million (2002/03: £393 million) were unchanged, with like for like sales down 2%. Strong sales of digital cameras, PCs and accessories were offset by declines in audio products, games and mobile phones. Focus continued on improving gross margins through higher sales of add-ons and packages. Four stores were opened or re- sited during the period, including three large format xL stores in Birmingham, Swansea and Hull. In addition, as part of the ongoing store-restructuring programme, twelve smaller stores were closed. The number of Dixons stores at the half year was 318.

THE LINK

Sales in The Link were £201 million (2002/03: £186 million), an increase of 8% in total and 6% on a like for like basis. The Link opened a new concept store during the period. Initial results have been encouraging, with an increased mix of contract sales. Two new stores were opened during the half year, and five stores are expected to open or resite during the second half of this financial year. At the half year, The Link traded from 288 stores.

Genesis Communications, the business to business mobile phone service provider acquired 18 months ago, grew strongly during the period, achieving a 21% increase in its customer base and a 26% increase in sales. Just after the half year, Genesis relocated its operations to the PC World Business head office at Bury.

EXTENDED WARRANTIES

In December, the Government announced that it had accepted the recommendations contained in the Competition Commission's Report on extended warranties following its 15-month investigation. Although the Group does not agree with the Commission's findings that the extended warranties market is unfair to consumers, it was encouraged that the recommendations reflect many of the Group's policies and practices governing the sales of extended warranties, and that the Commission has concentrated on practical and proportionate measures to ensure the spread of best practice across the industry. The Group hopes to see these features properly reflected in the implementing regulations that are expected to take effect during 2004.

INTERNATIONAL RETAIL

Sales in the International Retail division were £855 million (2002/03: £419 million), an increase of 104% in total and 3% on a like for like basis. The division's performance reflects strong profit growth in Elkjøp and Ireland together with the full consolidation of UniEuro offsetting planned start-up losses in developing markets. Excluding UniEuro, total sales growth was 32%.

Operating profit (before goodwill amortisation) grew by 171% to £20.9 million (2002/03: £7.7 million). The effect of the strengthening of both the Swedish and Danish Kroner and the Euro during the half year was to increase sales growth. At constant exchange rates, total sales would have been £60 million lower. Profit growth is unchanged, with the positive impact of stronger currencies on profitable markets offset by an equal translation effect on loss-making investment businesses. INTERNATIONAL RETAIL - ESTABLISHED BUSINESSES

Sales in the established international businesses (Elkjøp, UniEuro and Ireland) increased by 98% to £756 million (2002/03: £381 million). Operating profits for the established international businesses grew by 88% to £41.0 million (2002/03: £21.8 million).

ELKJØP

Sales increased by 22% to £430 million (2002/03: £352 million) with like for like sales 4% higher. Elkjøp continued its strong performance of last financial year during the first half. The Group estimates that the product markets in the Nordic region grew by around 2% during the period, with Elkjøp achieving good share gains in each country.

Elkjøp implemented a number of important initiatives during the period. In Norway, the Elkjøp store upgrade programme, which commenced last year, continued. In addition, greater emphasis has been put on the development of Lefdal, which opened a store in Stavanger in September. In Sweden, a further large El Giganten superstore was opened in Gothenburg. In August, Elkjøp acquired four large out of town superstores from Mega Pitkänen in Finland, which were subsequently rebranded under Elkjøp's Gigantti fascia. A new contact centre was also opened in Jyväskylä in Finland in October.

Nine new stores were opened or resited during the period bringing the total to 166 and four further new stores are expected to open or resite during the second half of this financial year.

UNIEURO

Sales during the half year were £292 million. Like-for-like sales grew by 3%. Sales growth was particularly strong in large white goods and vision products with a weaker performance in audio. During the period, UniEuro's competitive position was further strengthened. A new consumer credit offering was introduced and exclusive and own-brand product ranges were launched. UniEuro opened two stores during the period and since the half year end two further stores have been opened, taking the total number of stores to 97.

IRELAND

Sales in Ireland grew by 31% to £33 million (2002/03: £26 million), with like for like sales increasing by 4%. During the period, the Currys store in Liffey Valley was refitted and Currys in Waterford was converted into a PC World superstore. At the half year, the Group had 14 stores in Ireland. Two stores are expected to open in the second half of this financial year.

INTERNATIONAL RETAIL - INVESTMENT BUSINESSES

Sales in the investment international businesses (PC City and ) increased by 158% to £99 million (2002/03: £39 million). Investment costs for these businesses for the half year were £20.1 million (2002/03: £14.1 million).

PC CITY GROUP

PC City sales increased by 145% to £66 million (2002/03: £27 million). The Group continues to make good progress with its PC City brand, which now trades from 25 stores in four countries. Six new stores were opened during the period - four in Spain, one in Italy and the first Nordic PC City store in Stockholm. Since the half year, a further store has opened in Spain.

Spain is the most mature PC City market where the Group now trades from 15 stores. The business is now delivering consistent sales growth with all stores making a positive contribution to central costs. The Group is now satisfied that the PC City business in Spain is robust and will accelerate further store openings in this market. In France, sales were more challenging in a difficult market. However, gross margins have improved significantly towards target levels. The other new trial stores in Italy and Sweden have performed in line with expectations. In September, the UK's PC Service model was extended to mainland Europe, with the opening of a new contact centre in Madrid to service the Group's southern European markets.

ELECTRO WORLD

Electro World sales increased from £12 million to £33 million. Market conditions continue to be very competitive and, against this backdrop, Electro World has performed well, gaining market share in both Hungary and the Czech Republic. During the half year, one store was opened in the Czech Republic and since the half year end, a further store has been opened, also in the Czech Republic. Electro World now trades from eight stores, three in Hungary and five in the Czech Republic.

DISCONTINUED OPERATIONS - EUROPEAN PROPERTY

Operating profit in the European Property division for the first half was £2.2 million (2002/03: £6.1 million) on sales of £34 million (2002/03: £28 million). Shortly after the half year end, the Group disposed of its 90% holding in Codic International SA. Excluded from the sale is Codic's sister company which comprises the German property development business. The Group is already well advanced with plans to exit the German market and will do so during this and the next financial year.

FINANCIAL POSITION

The Group's financial position remains strong, and was further improved by the post balance sheet sales of Wanadoo shares and Codic International. The end of the first half marks a seasonal peak for working capital. Net borrowings were £246 million (excluding funds held under trust to fund future extended warranty and service contract claims) compared with £216 million in the previous year.

Total net interest receivable was £1.0 million (2002/03: £5.4 million). This reflects increased net borrowings and lower average interest rates.

The Group tax rate on underlying profit was 26.5% (2002/03: 23.1%). This comprises 28% charge relating to the current year and a credit of 1.5% on prior year items. The increase in the current year tax rate reflects changes to the taxation of Controlled Foreign Companies, which brings certain profits from the sale of extended warranties and service contracts within the scope of UK taxation.

CHRISTMAS TRADING

In the eight weeks ended 10 January 2004, Group sales increased by 12% in total and by 5% on a like for like basis. In the UK, sales increased by 7% in total and 4% on a like for like basis. Sales in the International division increased by 28% in total and 7% on a like for like basis.

In the UK, there were strong sales of new technology products including digital cameras, flat screen televisions and laptop PCs, as well as major white appliances. Key gift lines, which were disappointing last year, also sold well. Gross margins and cost ratios in the UK have been in line with last year's level. The Group's international businesses continued to perform strongly. The division's performance was broadly based, with all international businesses performing well over peak season.

The Group expects a satisfactory outcome for the year.

- ENDS -

Maylands Avenue Sir John Collins Hemel Hempstead Chairman Hertfordshire HP2 7TG 14 January 2004

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The Interim Statement will be mailed to shareholders on 21 January 2004.

Copies will be available from the Company Secretary at the above address and on the Group's website at http://www.dixons-group-plc.co.uk

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For further information:

John Clare Group Chief Executive 020 7499 3494 Jeremy Darroch Group Finance Director 020 7499 3494

Hamish Thompson Head of Press & PR 01727 203195

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Information on Dixons Group plc is available at http://www.dixons-group-plc.co.uk