Annual Report & Accounts 2001/02
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Service Te c h nol og y Value Annual Report & Accounts 2001/02 Contents 01 Financial highlights 02 Corporate profile 04 Chairman’s statement 06 54 years of excellence 08 Chief Executive’s review 10 Service 12 Technology 14 Value Operating review 16 Dixons 17 The Link 18 Currys 20 PC World 22 International 26 Corporate citizenship 28 Environment 30 Financial review 32 Board of directors 34 Senior management 35 Accounts Financial highlights £4.9 billion Turnover (excluding Freeserve) Underlying profit before taxation (£m) (excluding exceptional items and Freeserve) Group turnover (£m) 4,643.4 4,888.2 297.2 £297.2 million 263.7 277.8 3,871.9 238.6 Underlying profit before 217.6 3,153.6 taxation (excluding 2,791.9 exceptional items) 97/98 98/99 99/00 00/01 01/02 97/98 98/99 99/00 00/01 01/02 11.6 pence Adjusted diluted eps* Dividends per share Adjusted diluted earnings (pence) (pence) per share (eps) 11.6 6.050 10.3 5.500 9.4 10.0 6.05 pence 8.4 4.600 3.825 Dividends per share 3.175 97/98 98/99 99/00 00/01 01/02 97/98 98/99 99/00 00/01 01/02 2001/02 2000/01 Change £million £million Turnover (excluding Freeserve) 4,888.2 4,643.4 5.3% Underlying profit before taxation (excluding exceptional items and Freeserve) 297.2 277.8 7.0% pence pence Adjusted diluted earnings per share 11.6 10.3* 12.6% Dividends per share 6.05 5.50 10.0% *Prior years restated for Financial Reporting Standard 19 1 Dixons Group plc Annual Report & Accounts 2001/02 Dixons Group plc Retailing across Europe Europe’s leading UK specialist retailer of Ireland consumer electronics, Norway personal computers, Sweden domestic appliances, Denmark photographic equipment, Finland communications products Iceland and related financial and Spain after sales services. France Hungary Italy UK and international operations www.dixons.co.uk www.currys.co.uk www.pcworld.co.uk www.pcwb.com www.thelink.co.uk State of the art The first choice for Britain’s biggest The UK’s largest Direct sales to business The nationwide delivery and after new technology. The electrical chain – chain of computer customers. specialist retailer sales service. UK’s leading retailer of providing a superstores. of communication consumer electronics. comprehensive Sales products and services. Customer deliveries selection of domestic Sales £172 million 2.7 million Sales appliances, vision, £1,106 million Sales £816 million audio and Employees £331 million Coverplan communication Number of stores 500 agreements Number of stores products and PCs. 111 Number of stores in issue 331 285 12.5 million Sales Selling area Selling area £1,607 million (000’s sq ft) Selling area In-store service (000’s sq ft) 1,841 (000’s sq ft) centres 853 Number of stores 268 273 Superstores: 291 Average selling area Average selling area High Street: 93 per store (sq ft) Average selling area Regional repair per store (sq ft) 16,586 per store (sq ft) centres 2,577 Selling area 940 11 (000’s sq ft) Employees Employees Superstores: 3,791 5,050 Employees Employees 4,750 High Street: 158 2,050 4,650 Average selling area per store (sq ft) Superstores: 13,027 High Street: 1,699 Employees Superstores: 8,400 High Street: 800 All figures as at 27 April 2002 2 Dixons Group plc Annual Report & Accounts 2001/02 1,280 Stores Total selling space 9 million (sq ft) Employees 33,557 (average during the year) Ireland www.elkjop.no www.dixons.ie www.pccity.es www.electroworld.com www.codic.be www.elgiganten.dk www.currys.ie www.pccity.fr The Group’s newest High-quality retail and www.elgiganten.se www.pcworld.ie The PC superstore in brand, setting the pace office developments in www.gigantti.fi Ireland’s leading Spain and France. in Budapest. Belgium, Luxembourg, www.elko.is electrical retailer France and Germany. The leading electrical through Dixons, Sales Sales retailer across Norway, Currys and PC World. Spain: £23.6 million £4.2 million Sales Sweden, Denmark, France: £9.5 million £78 million Finland and Iceland. Sales Number of stores £56 million Number of stores 1 Employees Sales Spain: 6 34 £596 million Number of stores France: 2 Selling area 12 (000’s sq ft) Number of stores Selling area 43 148 Selling area (000’s sq ft) (000’s sq ft) Spain: 78 Average selling area Selling area 126 France: 34 per store (sq ft) (000’s sq ft) 43,000 1,802 Average selling area Average selling area per store (sq ft) per store (sq ft) Employees Average selling area 10,500 Spain: 13,000 100 per store (sq ft) France: 17,000 12,176 Employees 440 Employees Employees 550 2,950 3 Dixons Group plc Annual Report & Accounts 2001/02 4 Dixons Group plc Annual Report & Accounts 2001/02 Chairman’s statement Many factors underpin our success, which so many of our staff devote to most recently the Group’s expansion raising funds for numerous charities. into large-scale mixed electrical retailing I am pleased to report and PC superstores across a number of This year has seen some changes to on another year of European markets. the Board.We welcomed a new finance director, Jeremy Darroch, as well as considerable progress Our success in launching new brands a new non-executive director, Count and achievement for the and in maintaining the vigour of our Emmanuel d’André, who complements Group.We again recorded established names reflects the Group’s our team with his wide and valuable unfailing focus on its markets, on keeping international retail experience. Our double-digit growth in close to its customers, on anticipating former finance director, Ian Livingston, earnings per share, despite their needs and desires and moving left to join BT where we wish him intense pressure in the swiftly to meet them.That focus is as continued success. vital in our newest stores from Ayr, to mobile phone and PC Budapest and Zaragoza as it was in our Optimism, a measure of skill and markets. The Board has first Dixons in Edgware. responsible opinions are among recommended payment the many requisites of a company We maintain that focus despite the chairman. Obstacles and ill-considered of a final dividend of distraction of mounting external Government policies are problems to 4.675 pence per share, interference. I remain deeply concerned overcome. My optimism in the Group’s at the tide of superfluous and impractical prospects has been constant since making total dividends for regulation which increasingly impacts I joined my father’s photography shop the period of 6.05 pence on every business.The notorious “fridge in Edgware in 1948.Although not given per share (5.5 pence), an mountain” is a prime example of the to self-satisfaction, I am reasonably consequences of ill-considered regulation. content with the outcome. increase of 10 per cent. The so-called Enterprise Bill will vest enforcers with draconian powers, just Today, 40 years since Dixons became a two years after competition law was public company, I sign my final Chairman’s dramatically overhauled. It is in effect statement. Sir John Collins, my successor, an anti-enterprise measure. and I share many of the same values and the transfer of authority has been seamless. Both examples indicate that business has insufficiently impressed on Whitehall John Clare, the Group Chief Executive, and Brussels how debilitating to our and I have worked in harmony for entrepreneurial base is the relentless 17 years.We have agreed the Group’s urge to interfere with the value strategies and plans and taken pleasure creation process. in their successes. I have worked as closely with the senior management of Yet, where political action is patently the Group over the years.We have won necessary, its impact is less visible. a reputation for developing first-class The rising level of crime is now among managers and I am pleased to pass the our most serious problems. Losses baton to a talented team, each member rise inexorably with little discernible of which shares a determination to reaction from the authorities.We have continue to grow the Company in no alternative but to invest substantially the interests of our customers, our in prevention.The issue is now little short employees and our shareholders. of a crisis and demands a commensurate focus from Government. The Dixons Group trades in a key industry. Once the products we sold And there is a further political threat were considered luxuries.Today most to our national success.That is the are core necessities for the twenty-first extraordinary proposal to substitute century consumer. Our manufacturers, the euro for the pound. Despite any many of the world’s leading industrial short-term convenience for holidaymakers, companies, invest massively in their I am confident that a majority of products.The professionalism with citizens believe such a change would be which we bring them to the customer economically and politically disastrous. is our hallmark. It is a robust formula, Fortunately the choice will be ours when sustained by every member of our a referendum is announced. worldwide staff. Business has an integral responsibility The foundations of this business – to the communities around it. I am integrity and value – are ingrained as pleased that the active role we play is strongly as ever in the Group. I leave delivering several satisfying outcomes. the arena of battle full of confidence Our funding of King’s College Human in its future.