The forthcoming Initial Public Offering (IPO) of the group's Web access service Freeserve will free up cash further Net investments, according to a company spokesperson.
The high-street retailer's pre-tax profits for the year topped £237m, compared to £217.6m the previous year, exceeding analysts expectations and pleasing shareholders. The group's PC World business reaped £83m in sales, a year-on-year increase of 48 percent. Dixons also announced it is will create 3000 new jobs.
The runaway success of the group's Freeserve Web service, which Dixons claims stole the number one position after just 11 eleven weeks after launch, has boosted confidence in Net-related business. Dixon's chairman Stanley Kalms said: "The Group is particularly strongly placed to take advantage of the considerable opportunities available to all our retails and brands and Freeserve arising from new technology, the growth of the Internet and e-commerce."
An IPO of roughly one fifth of Freeserve, is planned on the London Stock Exchange and on Nasdaq in the U.S. at the end of July. A further 1.75 percent will be sold to telecoms company Energis. The IPO will free up valuable funds for developing the business. Analysts have valued Freeserve at anything between £1bn and £2 bn.
A company spokesperson confirmed that "some of the money from the flotation of Freeserve will go back into Freeserve to expand it and potentially some will be invested in related ventures," said a Dixons spokesperson.
Although details about Net expansion was sketchy, the May deal with online financial news provider GlobalNet Financial.com is a good example of the sort of deal to expect. The GlobalNet Financial.com tie-up provides financial content and will allow Freeserve dabble in electronic share trading.