BUSINESS UPDATE

DSG international plc, one of Europe’s leading electrical specialist retailers, is today updating the market on trading for the 25 week period to 5 April 2008. In addition, the company announces that the first phase of the Chief Executive’s business review will be presented on 15 May 2008.

• Total Group sales up 6%, like for like sales down 1% in the period.
• Trading environment remains challenging, particularly in the UK, Italy and Spain.
• Sales trends are in line with those previously reported on 3 January 2008.
• Increased promotional environment has resulted in Group like for like gross margins down approximately 0.8% for the period.
• Full year underlying profit before tax expected to be in the range of £200m - £210m.
• First phase of business review will be announced on 15 May 2008.

John Browett, Chief Executive, commented:- "The trading environment since we last reported has remained challenging across our markets, particularly in the UK, Italy and Spain. Whilst like for like sales patterns are broadly in line with those we reported over the Christmas period, it is clear that customers have become increasingly promotion and deal driven, impacting gross margins.

Going forward it is important that we increase our focus on delivering the value, choice and service that our customers demand, particularly in the prevailing difficult economic environment. I will present the first phase of the business review I have carried out since joining DSGi on 15 May 2008."

Divisional Commentary

The UK & Ireland Electricals business has seen good demand in response to promotions on flat panel televisions, laptops and large white goods, particularly over the Easter period. However demand outside of these promotions has been lower than expected, with a negative impact on margins.

Overall sales in UK Computing remain disappointing, despite reasonable demand for laptops and games consoles. Sales of stand alone non-hardware products were lower year on year, in line with the trends previously reported.

The Nordics, Greece and Central European businesses all delivered satisfactory performances over the second half of our financial year. Trading in Spain remains difficult.

The performance in Italy remains disappointing, not helped by the difficult economic environment.

Our e-commerce businesses continue to grow strongly.