Dixons Carphone’s FY20/21 results were in line with our expectations. The adjusted PBT came in at £156m, led by a strong show in the UK&I electrical business. The turnaround of the mobile business remains on track. The current trading has been positive in both UK&I and international segments. We believe DC will be able to achieve the guidance of 4% EBIT margin in the forecast years. No change in the stock recommendation.
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Dixons Carphone has announced a strong closure to FY20/21 (lfl sales at +12% in 25 weeks ended 24 April). The full-year adjusted PBT is guided to be in line with market consensus despite the decision to repay the £73m furlough benefit to the UK government. The closure of Dixons Travel is not a surprise, despite the knee-jerk reaction by the market. We continue to believe in the strength of the business and maintain a positive stance on the stock’s valuation.
Dixons’ trading performance in the 10 weeks ended 9 January 2021 was a mixed bag. The strong lfl growth in the first six weeks is in contrast to the subsequent period. Management has expressed it is comfortable with the consensus of the current financial year and reaffirmed its mid-term guidance. Overall, the business remains in good shape despite the adverse impact of frequent lockdowns and the dilutive impact of the growth in e-com. We maintain a positive stance on the stock recommendation.
Dixons Carphone has announced a strong trading performance for the 17 weeks ended 29 August 2020. The momentum was led by the online format (+124% yoy) which accounted for c.40% of total electrical sales. We also note the company’s success in gaining market share in the operating geographies. We believe DC is well placed to maintain lfl growth in the remainder of the year. No change in the stock recommendation.
While Dixons Carphone has witnessed strong lfl growth in the recent weeks, the shutting down of stores in the UK&I and Greece is likely to dent its near-term profits. However, we continue to see the electrical business as well placed, especially considering DC’s strong presence in the e-com format. A profit warning has also been factored into our estimates but we maintain a positive stance on the back of the inexpensive valuation and lack of structural issues.
DC’s peak trading performance was in line with our estimates. Electricals business performed ahead of the market across all geographies. Customer satisfaction and NPS improved in double digits as management continued to offer best-in-class prices (despite taking a planned hit in gross margin). Reconfirmation of all financial targets is also comforting. No change to our financial estimates.
Dixons Carphone (DC) has reported LFL sales growth of +2% and -9% yoy in its main UK trading divisions, Electrical and Mobile Phones over the 10 weeks to 4 January 2020. It also appears to have held PBT guidance for the year to April 2020 at £210m although this is not specifically stated (“we are on track to deliver what we promised for this year..”) The sales out-turn appears to be around a 1% point beat of expectation but the announcement also highlights price investment in the UK electricals
Dixons Carphone (DC) has reported 1H results slightly above consensus at PBT £24m (consensus £8m 1H LY £60m) in the less significant first half (both numbers presented on a pre IFRS 16 basis). Pre -existing 2019/20 PBT guidance of PBT £210m has been re-iterated and guidance has been given on a flat dividend expectation. The overall shape of the Group’s strategic projects re credit, online, customer service and mobile are progressing in line with pervious guidance.
There were no major surprises in the Q1 trading update. The UK mobile business remains weak (and was worse than our expectations) and other segments continued to be in the black. Management’s confidence is reassuring – achieve the annual guidance and implement successfully the longer-term transformation plan. No significant changes in our estimates.
Actually we think DC shares are going down for now. This is because they are clearly exposed to UK discretionary spend and as a low margin model with correspondingly high operational gearing, this is likely to result in further forecast reductions for the near years in our view.
FY18/19 results were in line with our estimates (headline PBT at £298m) but management has issued yet another profit warning. This is attributable to the weaker than expected performance in the UK&I mobile business. DC anticipates this segment to break even in two years. While we will revise our estimates and target price downwards, we reiterate our positive stance on the stock – the valuation is still attractive on both a fundamental and relative basis.
There were no major surprises in the Q3 results. We expect the UK businesses to remain weak in the near term even if the company is succeeding in gaining market share. Any tangible progress towards implementation of the recently-announced turnaround plan would be the biggest upside trigger for the stock price. No change in our stock recommendation.
DC reported broadly in-line with expectations but news on contract negotiations with the UK mobile operators was restricted to the analyst conference Q&A suggesting no material benefit to DC from the renegotiations. The uncertainty surrounding this part of its business is highlighted by the minus 7% LFL in UK & Eire Mobile LFLs (worse than the - 5% consensus expectation) albeit this is against a similar magnitude increase last year giving a two-year flat LFL (in turn highlighting the scale of de
Despite decent lfl growth in Q2, the underlying profitability was below our estimates. Although the new turnaround plan looks rational, it is below our expectations. The key pain-points are lack of granular details, the tough outlook for consumer demand in the UK and high risk of implementation (spread across the next three years). Investors would need at least a few quarters of convincing progress (on-time implementation of the restructuring proposal) to restore faith in the UK’s number one ele
Dixons Carphone reported disappointing Q2 FY18/19 results. While group lfl sales growth improved across all geographies (UK&I electricals: +3.0%, UK&I mobile: +1.0%, Nordics: +7.0% and Greece: +12.0%), the company incurred various non-recurring expenses during the quarter (including a goodwill impairment on UK mobile business, property rationalisation expenses, and regulatory and data incident costs). As a result, H1 FY18/19 net loss came in at £472m (vs £38m profit in H1 FY17/18). While managem
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Draftkings has made a £16.4bn ($22.4bn) bid to acquire Entain in a cash (630p) and stock offer, valuing the target at 2800p/share. While the bid is promising, MGM (BetMGM’s JV partner) can throw a spanner in the works (counter-bid or a veto).
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Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
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SCS Group’s full year trading update for the 53 weeks to 31st July shows that the strong demand that has been a hallmark of post lockdown periods over the past 15 months has continued, with LFL orders through the Group’s weeks 47 to 53 up by 23.7% on pre-Covid levels. Lower costs underpin a 16% upgrade to FY21 CPTP expectations, whilst the strong order book drives a 17% upgrade to our FY22 CPTP forecast. We look for EPS of 32.2p and 30.8p for FY21 and FY22 respectively. Year end net cash of £87.
Companies: ScS Group plc
Last week Lookers announced a record set of H1 results for the six months to 30 June 2021. Underlying PBT was £50.3m, versus an underlying loss of £36.5m in H1 2020. This stronger trading, coupled with cost control and working capital initiatives, has led to substantial cash generation. Lookers has gone from net debt of £40.7m (excl. leases) at the FY20 year end to net cash of £33.0m at 30 June 2021. With legacy issues now behind them, good evidence of trading outperformance and a strong balance
Companies: Lookers plc
Kingfisher reported better-than-expected figures at its H1 FY21/22 results, with lfl sales and adjusted PBT coming in ahead of market expectations and management’s guidance. Lfl sales outlook for H2 has been raised, the share buy-back programme re-introduced and the interim dividend increased. However, the share price was down c.5% today, as investors worried about inflationary cost pressures and supply chain constraints which are expected to continue into 2022. We will update our estimates and
Companies: Kingfisher Plc
Pendragon have published a revised strategy update reaffirming the investment in its used car business and software platform to be funded through strategic disposals and lower capital commitments to the new car market. This includes the potential sale of the group’s US Motor Group. We have modelled the implications of successful implementation of this strategy which would result in a £200m swing from a net debt position to a cashrich group over coming years. Whilst the US disposal would be earni
Companies: Pendragon PLC
Pendragon has communicated a clear strategy focused on investment in its used car business and software platform to be funded through ongoing cash flow, strategic disposals and lower capital commitments to the new car market. This includes the disposal of the group’s US Motor Group. We have modelled the implications of successful implementation of this strategy which would result in a £200m swing from a net debt position to a cash-rich group over coming years. Whilst the US disposal would be ear
FY20 results – All Focus on Resuming Operations
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Dart Group has released an AGM statement this morning indicating satisfaction with load factors and financial performance achieved year-to-date in the context of the challenging operating environment. In addition, the Group has applied to change its name to Jet2 Plc in recognition of the recent sale of the Fowler Welch distribution business and the sole focus on leisure travel. We keep our forecasts withdrawn at this time.
The final results revealed adjusted PBT up 99% year-on-year, which was 10% better than forecast despite four upgrades during the financial year. This strong performance reflects the financial benefits that have accrued following the shift in the business model to online only, as well as management’s strategic decision to significantly increase marketing spend. A second special dividend for the 2020 financial year has also been announced, reflecting the strong cash flow characteristics of the bus
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Unprecedented times over the past 12 months have seen ScS Group deliver an exceptional set of H1 2021 results, dominated by the surge in orders post Lockdown 1.0. Group revenue grew 14.4%, with an incremental gross margin, tight cost control and UK government support (£6.6m) underpinning EBITDA* of £19.5m (£3.8m in H1 2020). We believe the average net cash through the period was c£97m (c£60m excluding customer balances). H2 2021 visibility remains low, with post Lockdown 3.0 demand uncertain, th
Compass again delivered an encouraging margin improvement in Q3 and anticipated a further “normalisation” in terms of business volume and margin for Q4.
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