Bottom Line: Dixons curries favour
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.BY CONTRAST with GEC, an 8 per cent rise in Dixons' share price to 184p yesterday was a pretty charitable reaction to figures that confirmed the persistently tough conditions on the high street.
The market took heart from an 11 per cent sales rise since the April year-end, but gross margins are still lower than a year ago and unlikely to improve much with interest-free giveaways a continuing reminder of consumers' reluctance to spend.
On the bright side, moving Curry's from the high street to the edge of town seems to be paying off with like-for-like sales usefully ahead. The disposal of Silo, too, while it wrecked these figures, was a deft retreat from a hopeless battle.
But flat sales are making heavy weather of the core UK operation and the collapse of demand for computer games before Christmas provided last year's banana skin.
Analysts worry that this year's howler could be an adverse call by the Office of Fair Trading which is looking into the sale of extended warranties, arguably the source of most of Dixons' profits. A demand from the OFT that Dixons sells other insurers' warranties, or discloses its commissions, or issues facts and figures on the (very high) reliability of many of its products could wreak havoc with profits.
On that basis a prospective p/e of 15, from BZW's reduced pounds 85m forecast, puts the shares on a more- than-generous 15 per cent premium to the rest of the market.
(Graph omitted)
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments