DSG International, owner of PC World and Currys, today admitted that its interim profit has slumped by more than 25 per cent after being swamped by a backlog of laptops loaded with Vista, Microsoft's most recent operating system.

The shares opened around overnight levels of 112p.

The company, whose new chief executive John Browett starts next Thursday, reported underlying pre-tax profit down from £70.3 million last year to £52.4 million in the six months to October 13. Profits in its computing division plummeted 75 per cent to £5.9 million on sales up just 1 per cent.

During the six months, group sales rose by 8 per cent to £3.3 billion with like-for-like turnover up 5 per cent.

The group is also cautious about sales of white goods, in particular fridges, after the wet weather in summer dampened trading while turnover in the past two months declined by “single digits”.

Kevin O'Byrne, the finance director of DSG, said that the coming January sales period was "very important" for white goods and hopes customers will take advantage of the sale period to boost turnover.

DSG's assessment of the white goods market tallies with that of rival Comet, owned by Kesa Electricals, which last week said that less demand for fridges, freezers and washing machines contributed to a 0.2 per cent fall in third quarter like-for-like sales.

Mr Browett, the former chief executive at Tesco.com, is joining DSG as it enters its crucial Christmas and January sale period, when it hopes to make up for the huge fall in profits during the first half of the year.

DSG said that it is cautiously optimistic about the immediate outlook but conceded that it is difficult to give a forecast on 2008 due to a number of factors including higher interest rates, a slow down in the housing market and the continuing repercussions of the global credit crunch.

Sir John Collins, the chairman of DSG, said today: "Whilst most parts of the group performed well, overall profits was disappointing, primarily due PC World and UniEuro."

On PC World, Sir John said: "PC World performed well against a strong prior year comparative in the important back to school period, however profitability was significantly impacted in the first half as a result of the overstock of laptops and increasing hardware in the mix.

"Laptop stock levels are now back to normal."

At UniEuro, DSG's Italian business, like-for-like sales, which strips out gains from new stores opened during the six month period, fell by 8 per cent due to growing competition from rivals and fewer customers.

DSG is searching for a new managing director for its Italian business after the former incumbent, Mark Rollman, left for "personal reasons".

Mr O'Byrne said the group is confident that the Italian market, where it has 127 stores, is a "long-term prospect" for the company although he was unable to comment on whether new chief Mr Browett will decide to sell UniEuro. He said: "Anything is possible with a new chief executive."

DSG said sales in "brown goods", such as flat screen TVs continued to be strong.

Mr Byrne said there was still growth ahead in this area as only 30 per cent of UK households owned a flat screen TV and people were upgrading from between 26 and 32 inch television to 40 inches and above. Mr O’Byrne said that he did not expect sales of flat screen TVs to be impacted by England’s recent failure to qualify for the European Championship next year.

The company will maintain its interim dividend at 2.02p per share.

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