ELECTRICAL retail group Dixons has reported flat trading after being hit by declines in the mobile phone and personal computer markets.

But it has predicted it will create 1,400 jobs through expansion during the next year.

The majority of the new posts will be created at existing stores and at the group's national customer contact centre, in Sheffield.

Like-for-like sales in the 28 weeks to November 10 were 0.8 per cent lower, while the figure for the Christmas and New Year trading period was down 0.6 per cent.

Stripping out the phone and personal computer markets, Dixons said its festive performance would have been almost six per cent higher, as customers snapped up products such as wide-screen TVs.

The company said Christmas trading had been in line with expectations.

Chairman Sir Stanley Kalms said: "The group produced another solid set of results, despite the significant decline in both the mobile phone and PC markets.

"Whilst there remains short-term uncertainty, new technology is expected to be one of the strongest areas of consumer expenditure."

Dixons, which owns Currys, PC World and The Link, saw underlying pre-tax profits for the six-month period slip to £87.4m, from £90.8m a year earlier.

The decline was blamed on the company's recent investment in new businesses in continental Europe.

But operating profits before exceptional items at the UK retail division rose three per cent to £72.9m, with gross margins up by 0.4 per cent following supply chain improvements and the introduction of new store layouts.