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The Group believes that software is a category in which on-line sales will capture a large share of the market. It is less clear how many customers will be willing to purchase other products without seeing them and obtaining appropriate advice and after sales back up. However, e-commerce will take a share of traditional retail sales within an expanding retail market. Customers will use the net to assist in making product decisions and for after sales service information. The Group aims to be a market leader both in ‘bricks and mortar’ retailing and e- commerce. It will exploit the opportunities to provide enhanced customer service and i n c rease market share through both mediums. The Group expects to invest in excess of £30 million over the next two years in developing its e-commerc e activities. The Group's expertise, marketleading brands and links with Freeserve give it a unique position to cre a t e additional profit streams from e- commerce. Elkjøp Shortly after the end of the half-year, the Group acquired, for £444 million, Elkjøp ASA, the leading consumer electronics retailer in the Nordic region. Elkjøp is a profitable and fast growing company with over 150 stores in 5 countries. We believe that this growth can be further enhanced as part of the Dixons Group. The acquisition represents a significant step in the Group's European expansion strategy. Freeserve Freeserve strengthened its position as the UK's leading internet company. By the end of the period it had 1.575 million active users, an increase of almost 400,000 since the beginning of the financial year. Total minutes on-line in the first half were 4.1 billion. In line with Fre e s e rv e ' s strategy of building on its position as the UK's largest ISP to become the UK's leading internet portal, page impressions increased to 110 million in November, an increase of 72 per cent from the beginning of the half year. Total revenue was £7.2 million, an increase of 184 per cent on the second half of last year. In line with expectations, advertising and e-commerce have now grown to 50 per cent of total revenue. On 26 July 1999, the Group made an Initial Public Offering of a minority interest in Freeserve. Approximately 20 per cent of the shares were made available in the offer, with Dixons retaining 80 per cent. Of the £242 million raised net of fees and stamp duty, £123 million went directly to F re e s e rve to fund its growth and investment plans. European Property The European Property division made an operating profit of £6.3 million (£4.0 million) on sales of £39 million (£29 million). The 58 per cent increase in profits on lower operating assets reflects the success of the re-focus of activity into Belgium, Luxembourg and France, where Codic has a strong record of successful projects. Financial position At the end of the period, net funds, excluding amounts held under trust to fund extended warranty liabilities and funds held by Fre e s e rve, were £403 million (£32 million). The increase on last year reflects the funds raised for Dixons Group plc from the flotation of Freeserve together with cash generated fro m operations. Working capital was tightly managed, with average stock weeks cover falling by 14 per cent, whilst stock availability improved. Net interest receivable increased to £16.1 million (£14.3 million), reflecting the higher cash balances, largely offset by lower year on year interest rates. On 13 December 1999, the Group paid a special interim dividend of 7.5 pence per Ordinary share. In order to qualify for this dividend, over 75 per cent of the holders of the Convertible Pre f e rence share s elected to convert their holdings into O rd i n a ry shares. The balance has subsequently been converted resulting in the total conversion of 177 million C o n v e rtible Pre f e rence shares into 47 million Ordinary shares. It was announced on 28 June 1999 that, following the flotation of Freeserve, Dixons was considering a corporate restructuring to give greater strategic and financial flexibility and a capital structure more appropriate to its needs. It has now been decided to proceed. As part of the restructuring, the Board intends to return 25 pence per Ord i n a ry share to shareholders, equivalent to £121 million in aggregate. There will also be a share split. Year 2000 The extensive programme, started in 1997, to ensure that the Group's systems and operations were Year 2000 compliant has cost approximately £10 million. No material problems or failures were identified over the New Year period. Christmas trading Over the Christmas period, the growth of digital technology and lower prices ensured sales remained strong, although there was a further reduction in gross margins. Retail sales for the first eight weeks of the second half to 8 January 2000 increased by 15 per cent in total and 5 per cent on a like for like basis. Maylands Avenue Sir Stanley Kalms Hemel Hempstead Chairman Hertfordshire HP2 7TG 12 January 2000 4 Dixons Group plc Dixons Group plc 5
Consolidated Profit and Loss Account Note Turnover 2 1,720.7 - 1,720.7 1,455.2 3,156.3 Operating profit from continuing operations 2 67.8 (4.9) 62.9 54.6 195.7 Exceptional profit on partial sales 3 - 220.4 220.4 - 7.5 Profit on ordinary activities before interest 67.8 215.5 283.3 54.6 203.2 Net interest 4 16.1 - 16.1 14.3 28.1 Profit on ordinary activities before taxation 83.9 215.5 299.4 68.9 231.3 Dixons Group (excluding Freeserve) 92.5 215.5 308.0 69.4 232.8 Freeserve (8.6) - (8.6) (0.5) (1.5) 83.9 215.5 299.4 68.9 231.3 Taxation on profit on ordinary activities 5 (19.6) 0.7 (18.9) (13.9) (42.1) Profit on ordinary activities after taxation 64.3 216.2 280.5 55.0 189.2 Equity minority interests (1.5) - (1.5) (0.3) (3.0) Profit for the period 62.8 216.2 279.0 54.7 186.2 Dividends - Preference 6 (2.2) (4.7) (8.9) - Ordinar y 6 (56.6) (15.1) (66.3) Retained profit for the period 220.2 34.9 111.0 Earnings per Ordinary share (pence) Before exceptional items £million Exceptional items £million 28 weeks ended 13 November 1999 Total £million Basic 7 62.9p 11.6p 41.1p Adjusted basic 7 13.8p 13.7p 41.7p Diluted 7 56.7p 11.3p 38.2p Adjusted diluted 7 12.8p 13.2p 38.7p Statement of Total Recognised Gains and Losses 28 weeks ended 14 November 1998 Total £million 52 weeks ended 1 May 1999 Total £million Consolidated Balance Sheet Fixed assets Intangible assets 3.4 - - Tangible assets 387.1 363.2 363.8 Investments 14.6 1.1 1.9 Current assets Note 405.1 364.3 365.7 Stocks 8 609.9 643.0 427.3 Debtors 292.0 291.9 288.0 Investments 864.9 573.9 746.3 Cash at bank and in hand 185.1 16.7 11.0 Creditors - due within one year 1,951.9 1,525.5 1,472.6 Borrowing (46.7) (57.8) (42.9) Other creditors (873.4) (731.7) (620.1) (920.1) (789.5) (663.0) Net current assets 1,031.8 736.0 809.6 Total assets less current liabilities 1,436.9 1,100.3 1,175.3 Creditors - due after more than one year 13 November 1999 £million 14 November 1998 £million 1 May 1999 £million Borrowing (199.3) (227.6) (202.5) Other creditors (182.4) (166.3) (173.7) (381.7) (393.9) (376.2) Provisions for liabilities and charges (34.7) (24.4) (34.4) 2 1,020.5 682.0 764.7 Shareholders’ funds 9 986.0 674.9 754.9 Equity minority interests 34.5 7.1 9.8 1,020.5 682.0 764.7 28 weeks ended 13 November 1999 £million 28 weeks ended 14 November 1998 £million 52 weeks ended 1 May 1999 £million Profit for the period 279.0 54.7 186.2 Translation adjustments (0.2) - 0.1 Prior period adjustment - 2.4 2.4 Total gains recognised in the period 278.8 57.1 188.7 6 Dixons Group plc Dixons Group plc 7
Page 1 and 2: THANK YOU FOR SHOPPING WITH US BR A
Page 3: Chairman’s Statement Results and
Page 7 and 8: Notes to the Interim Financial Repo
Page 9 and 10: Notes to the Interim Financial Repo

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