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Shares in Dixons Retail plunged as much as 20% after the electricals retailer said annual profits would be at the bottom of market expectations.

The company, which owns Currys and PC World, said profits for the year to the end of April would be about £85m, compared with forecasts of £85m-£109m.

It added that like-for-like sales were down 7% in the past 11 weeks.

The group said it would focus on cutting costs further and look at exiting the Spanish market.

"Consumer confidence across some of our markets is fragile and we expect it to continue to be so through much of 2011," said Dixons' chief executive John Browett.

The group set out a four-step plan to respond to its current difficulties: A review of its Spanish operations, targeting expenditure on its highest return projects, focusing on cash generation and cutting costs.

However, Mr Browett said the group's longer-term plans to transform the business were working.

The Italian business was improving and the Nordic parts of the business continued to "perform strongly", he said.

Despite the fall in sales, Dixons also said it believed its market share was improving.

Dixons Retail changed its name from DSG International at the end of last year.