Future looks brighter for revitalised DSG

It has launched new-format stores, such as Currys Megastores and combined Currys and PC World 2-in-1 shops as it tries to attract customers with wider ranges and improved standards of service.

Like-for-like sales in the UK and Ireland electricals business rose 6 per cent over the period. This was down on the 8 per cent improvement seen over Christmas, but analysts said this was still a decent performance given the impact of snow and the weak electricals market.

The PC World computing business posted a sales drop of 5 per cent, against a fall of 3 per cent seen in January.

DSG is facing up to increased competition from the US electronics firm Best Buy. It plans to refurbish about 100 stores in UK and Ireland in the 2010-11 financial year, with the majority ready for Christmas. The programme includes the opening of 25 megastores, taking the UK total to 33, as well as 60 combined stores and 12 Currys and PC World standalone superstores.

DSG chief executive John Browett forecast a major sales boost from the World Cup, which kicks off in South Africa on 11 June.

"Basically, in a World Cup, we sell the same amount of televisions we sell at peak trading (Christmas]," he said.

Investec Securities described the update as "very reassuring" and said it continued to expect profits of between 80 million and 90m in the year to 30 April, against 56.1m a year earlier.

Analyst David Jeary said: "DSG's recovery plan remains in its early stages, but it is as much about self-help as it is cyclical recovery. As such, DSG should successfully drive market share gains, despite potentially weakening consumer demand."

The firm has a new 360m credit facility with its lenders, giving it appropriate financing for its working capital needs.