7pc slump for Carphone on mobile upgrade fears
A DROP in the number of customers upgrading their mobile phones led a star broker to slap Dixons Carphone with a double downgrade yesterday.
Simon Bowler of Exane BNP Paribas cut Dixons to ‘underperform’ from ‘ outperform’ and reduced its target price to 230p from 355p, prompting the firm’s biggest one-day sell-off in a year.
The shares were already close to three-year lows due to concerns that UK consumers are spending less. But they were dealt a fresh blow after Bowler warned of a reduction in the number of customers upgrading their phones and an unbundling of handset and network contracts.
He said: ‘Not only are the networks and manufacturers looking to take a greater proportion of direct business, but new entrants such as BT and Sky are more easily able to participate, and are happy to be aggressive.’
His comments contrast strongly with the firm’s results for the year to the end of April which saw it report a 10pc rise in profits and a 4pc like-for-like jump in sales.
Yesterday, shares fell 7.2pc, or 19p, to 246.7p, wiping £220m off the company’s value.
The FTSE finished a terrible week at a three-month low as geopolitical tension between North Korea and the US continued to drive profit-taking by investors. It fell 1.08pc, or 79.98 points, to 7309.96.
It has dropped 3pc since US president Donald Trump threatened North Korea ‘with fire and fury like the world has never seen’ on Tuesday. The tension has prompted investors to rush into less risky assets, boosting the price of the Japanese yen, gold, and bonds while hitting financial, mining, and energy companies. Newspaper publisher Johnston
Press rocketed after Christen Ager-Hanssen, the Norwegian investor who bought more than 5pc of the firm on Wednesday, announced plans to buy more of the firm and cut its debt.
The investor, whose private equity firm Custos owns the Metro paper in Sweden, has buyers lined up to refinance the troubled publisher’s £220m bond debt. Shares rose 14.3pc, or 1.9p, to 15p. Support and construction group
Interserve has been widely shunned following a weak set of first-half results on Wednesday, but analysts at Liberum described the firm as ‘too cheap to ignore’.
The firm’s target price was cut by JP Morgan and Stifel after challenging market conditions led it to report a fall in profits and rising debt but Liberum said that although Interserve has a troublingly high exposure to Qatar and immense debt levels, pros- pects currently make it a greatvalue buy. Shares fell 2.4pc, or 4.75p, to 196.6p.
The large number of houses being built in the UK over the last year has offset weakness in the home improvement market at ventilation firm Volution Group.
The firm, which once supplied one of its products to Winston Churchill, said results for the year are expected to be in line with its board’s expectations, with global revenues jumping 20pc to £185m. Shares fell 1.1pc, or 2p, to 188p. Temporary power provider
Aggreko was forced to respond to reports that it has been awarded a contract in Bangladesh. The firm said it is in discussions with a client in the south Asian country but cannot comment further. Shares rose 0.3pc, or 2.5p, to 847p.
TT Electronics, which makes monitoring sensors to protect parts of machinery, saw earnings per share double to 4.6p, and profits rise 61pc to £9.5m on revenues of £180m, up 6pc. Shares fell 0.1pc, or 0.25p, to 215.5p.