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(Alliance News) - Dixons Carphone said Thursday it no longer expects to achieve annual guidance due to Covid-19, but it has gotten a boost to online sales as customers prepare to work from home.
The electronics retailer has closed stores in the UK and Ireland, in line with government guidance, following on from store closures in Greece earlier in the month. However, almost all Nordic stores are still trading, the firm added.
Online trading, which is still in operation, has been "very strong" in all countries over the last two weeks as people prepare to work from home.
"Early signs are that this strong trading has continued since stores closed and will help to compensate for lost store sales," said Dixons.
In the 11 weeks to March 21, Electricals like-for-like sales were up 8%, with sales running 23% higher in the last three weeks amid good demand for home working equipment as well as TVs and gaming.
Group like-for-like sales in the 11 weeks were up 4%, with these up 13% in the last three weeks following a flat showing in the 8 weeks to February 29.
The firm said that while it will see some sales recovery through online channels, it does not expect to meet guidance of adjusted pretax profit of GBP210 million for the current financial year. Dixons said it has "sufficient" funding capacity available to meet its obligations over the foreseeable future.
It will mull whether it is "prudent" to pay a final dividend at its full-year results.
The stock was down 2.0% in early trade on Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 2.7% at 5,533.18
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Hang Seng: down 1.1% at 23,258.30
Nikkei 225: closed down 4.5% at 18,664.60
DJIA: closed up 495.64 points, 2.4%, at 21,200.55
S&P 500: closed up 1.2% at 2,475.56
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GBP: up at USD1.1881 (USD1.1764)
EUR: up at USD1.0909 (USD1.0834)
Gold: soft at USD1,604.33 per ounce (USD1,607.66)
Oil (Brent): down at USD26.50 a barrel (USD27.08)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
1200 GMT UK Bank of England interest rate decision
1200 GMT UK BoE meeting minutes
1000 CET EU monetary developments in euro area (M3)
0830 EDT US advance economic indicators report
0830 EDT US 3rd estimate GDP
0830 EDT US initial jobless claims
1030 EDT US EIA weekly natural gas storage report
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A financial package aimed at helping self-employed workers in the UK get through the coronavirus crisis will be announced by Chancellor Rishi Sunak with the government under growing pressure to throw the sector a lifeline. The move comes after UK Prime Minister Boris Johnson told Parliament he wanted to achieve "parity of support" so the self-employed could have similar levels of protection to waged workers. The chancellor will outline his measures on Thursday, on the day the number of people testing positive for Covid-19 is likely to pass 10,000. They include the Prince of Wales, who is self-isolating in Scotland after testing positive with what Clarence House described as "mild symptoms".
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UK retail sales disappointed in February, data from the Office for National Statistics showed, with some retailers reporting a knock from rain and others suggesting reduced orders shipped from China due to the Covid-19 pandemic, which started there and shuttered factories. Sales were flat year-on-year in February after a 0.9% rise in January, the latest reading missing expectations for growth of 0.8%, according to FXStreet. February's was the lowest annual growth rate since March 2013, the ONS said. Month-on-month, sales were down 0.3% after a 1.1% rise in January, again missing expectations for a 0.2% increase. The ONS said a range of retailers reported on the adverse effect of extreme rainfall on sales.
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House sales in the UK are set to plunge by as much as 60% over the next three months, as the market reacts to the impact of Covid-19, a report suggested. Research modelling by property website Zoopla indicates a fall in transaction volumes of up to 60% over the second quarter of 2020, compared with same period in 2019. Some individual months this spring may even see newly-agreed sales down by up to 80% on last year, given the shutdown of normal life and knock-on impact for the market, Zoopla suggested. Low sales volumes are also expected to continue into the third quarter.
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New York authorities moved to avert a public health disaster in the city on Wednesday as its emergence as America's biggest coronavirus hot spot sent warnings to the rest of the country. A makeshift morgue was set up outside Bellevue Hospital, and the city's police – their ranks dwindling as more fall ill – were told to patrol nearly empty streets to enforce social distancing. Public health officials sought beds and medical equipment and issued calls for more doctors and nurses for fear the number of sick will explode the next few weeks, overwhelming hospitals as has happened in Italy and Spain. New York University offered to let its medical students graduate early so they could join the battle. Late on Wednesday night in Washington, the US Senate passed a USD2.2 trillion economic rescue package in response to pandemic. The House of Representatives will vote on the package on Friday.
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BROKER RATING CHANGES
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BERENBERG RAISES COATS GROUP TO 'BUY' ('HOLD') - TARGET 55 (80) PENCE
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HSBC CUTS AUTO TRADER GROUP TO 'HOLD' ('BUY') - TARGET 410 (675) PENCE
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GOLDMAN RAISES RENTOKIL INITIAL TO 'BUY' ('NEUTRAL') - TARGET 500 PENCE
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COMPANIES - FTSE 250
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Weir withdrew its 2020 guidance as well as its recommendation to pay a 2019 final dividend. Trading in January and February was in line with expectations. Through March, however, with a significant reduction in oil prices and the escalation of the Covid-19 pandemic, the backdrop has changed "rapidly". In Minerals and ESCO, overall aftermarket demand in main mining markets has remained "robust so far", Weir said. March to date has seen a slowdown in original equipment orders, although the longer-term project pipeline remains active. Oil & Gas has seen North American order activity start to slow as a result of lower oil prices and widespread reductions in spending, the company said. "We expect to see continued sequential declines in activity through 2020 with E&P capex now expected to be down at least 30% year on year versus our prior expectation of 10%," said Weir.
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Engineering firm Senior also said it is no longer recommending the payment of a 2019 final dividend, believing conserving cash "is the most prudent way to manage through the crisis" until the full disruption from Covid-19 is known. Trading in the first two months of the year was in line with expectations but, while the firm expects "structural long-term drivers" of its end markets to remain in place, trading for the rest of 2020 will be hurt. The firm thus has suspended its guidance for the year.
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William Hill said its incoming chief financial officer will be staying at DS Smith "given the current unprecedented circumstances". Adrian Marsh, group finance director at DS Smith, had been due to join the bookmaker as CFO. He will now not be joining the group as he intends to stay at the packaging firm "given the current unprecedented circumstances", and Ruth Prior, who is currently serving out her notice period, will continue as William Hill's CFO.
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Capital & Counties Properties said it has temporarily suspended its GBP100 million share buyback programme, as part of its efforts to conserve cash amid the Covid-19 outbreak. The London and Johannesburg-listed property firm said the majority of retail and food & beverage outlets in its Covent Garden estate will be closed, which is expected to disrupt income over the course of 2020. In addition, Capco said it will propose several solutions for its customers, including a movement from quarterly rental payments in advance to alternative arrangements, or the deferral of rental payments for certain cases. The group said it was too early to determine the full impact of these proposals on rental income and property valuations.
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Outsourcing firm Capita has hit back at claims it is not following government guidelines to tackle coronavirus by having staff remain working its sites. Capita runs call centres across the country with its Glasgow and Leeds offices coming under fire with complaints to local MPs Alison Thewliss and Hilary Benn. A letter on social media indicated staff were being designated as key workers – making it necessary to continue working from the office. But this has been denied by the company who say "most staff" are working from home and those who cannot are "providing essential services as defined by the government". Among its contracts, Capita supports NHS call centres in parts of the country as well as telecommunications, which has been classed as an essential service.
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Thursday's Shareholder Meetings
Dev Clever
Independent Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
