(Alliance News) - Dixons Carphone said Tuesday it will close all of its UK standalone Carphone Warehouse stores - 531 shops representing 8% of its total UK selling space.
Dixons Carphone shares jumped 13% at the London open Tuesday in response.
The company said mobile phones are to be sold through Carphone Warehouse sections in electrical goods retailer Currys.
It expects 2,900 redundancies as the businesses are combined. It said the 70 Carphone Warehouse stores in the Republic of Ireland aren't affect, nor are international operations.
Dixons Carphone added that it has not yet seen a "material impact" from Covid-19 but is preparing for one. It said it still expects adjusted pretax profit of GBP210 million in its current financial year.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 2.4% at 5,274.25
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Hang Seng: up 1.1% at 23,326.99
Nikkei 225: closed up 0.1% at 17,011.53
DJIA: closed down 2,997.10 points, 13%, at 20,188.52
S&P 500: closed down 12% at 2,386.13
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GBP: down at USD1.2221 (USD1.2271)
EUR: down at USD1.1131 (USD1.1149)
Gold: down at USD1,484.30 per ounce (USD1,508.34)
Oil (Brent): up at USD30.93 a barrel (USD29.99)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
US Federal Open Market Committee two-day meeting begins.
0930 GMT UK labour market statistics
1100 CET EU labour cost index
1100 CET EU construction output
1100 CET Germany ZEW indicator of economic sentiment
0830 EDT US advance monthly sales for retail & food Services
0915 EDT US industrial production
1000 EDT US manufacturing & trade: inventories & sales
1630 EDT US API weekly statistical bulletin
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Around 250,000 people will die in Britain as a result of the coronavirus outbreak unless more draconian measures are adopted to protect the population, scientists have warned. The Imperial College Covid-19 response team – which has been advising ministers – said that even with the "social distancing" plans set out by the UK government, the health system will be "overwhelmed many times over". In its latest report, it said the only "viable strategy" was a Chinese-style policy of "suppression" involving the social distancing of the entire population. It said such measures would need to be maintained potentially for 18 months or more until an effective vaccine became available. The stark warning came after UK Prime Minister Boris Johnson on Monday unveiled unprecedented peacetime measures to try to control the spread of Covid-19. They were announced as the death toll of people with coronavirus in the UK reached 55. In the first of his daily No 10 press conferences, the prime minister called on people to stay away from pubs, clubs and theatres and to avoid all non-essential contacts and travel.
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The Irish government has recommended all citizens should avoid non-essential overseas travel until March 29 in a bid to prevent the spread of the coronavirus. Deputy Premier Simon Coveney told a press briefing in Dublin that the government's advice against all non-essential movement out of the Republic includes the UK but not Northern Ireland. "Distinguishing between countries is increasingly difficult because of the rapid pace of the spread of the virus," the Tanaiste said. "We don't want Irish people stranded in different parts of the world and Europe unable to get home."
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Japan's January industrial production data painted a mixed picture, with numbers showing a month-on-month rise, but an annual decline. The figures reported by the country's Ministry of Economy, Trade & Industry, beat consensus however. Data showed a 1.0% production rise from December, above consensus compiled by Trading Economics which forecast just a 0.8% increase. In December, industrial output was 1.2% higher month-on-month. Annually, January industrial production in Japan was 2.3% lower, though faring better than consensus which tipped output to slump 2.5%.
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Joe Biden has been declared the winner of last week's US Democratic presidential primary in Washington state, giving him victories in five out of six states that voted last Tuesday. After nearly a week of counting votes, the former vice president on Monday morning held a small lead over Vermont senator Bernie Sanders, which later in the day became insurmountable. Three states — Arizona, Illinois and Florida — are scheduled to hold primaries on Tuesday, while Ohio is set to cancel its primary owing to the coronavirus.
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BROKER RATING CHANGES
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HSBC RAISES STANDARD CHARTERED TO 'HOLD' ('REDUCE') - TARGET 480 (590) PENCE
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JPMORGAN RAISES UNILEVER TO 'NEUTRAL' (UNDERWEIGHT) - PRICE TARGET 3850 (4210) PENCE
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JEFFERIES RAISES JUST EAT TAKEAWAY.COM TO 'BUY' (HOLD) - PRICE TARGET 8000 PENCE
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COMPANIES - FTSE 100
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Compass Group reported organic revenue growth for the five months ending February 29 came in at 6% as it said government measures to contain the virus in its Asia Pacific region "did not materially impact our business". However, Compass said the acceleration of containment measures from world governments and clients in Continental Europe and North America have put a dent in its financial expectations for the half year. Compass said the vast majority of Sports & Leisure and Education business in these regions have been closed, as such the company's business and industry volumes are being hurt severely. Compass's current expectations are that interim 2020 organic revenue growth should be between zero and 2%. The company is implementing "significant mitigation plans" to manage costs, and at this stage expects the drop-through impact of lost revenue to be between 25% to 30% across the business. As a result, Compass's interim operating profit for financial 2020 will be in a range between GBP125 million to GBP225 million - lower than expected. In financial 2019, interim operating profit was GBP951 million.
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Ferguson said it saw strong operational delivery in the first half of its financial year. For the half year ended January 31, revenue rose 1.1% to USD10.97 from USD10.85 billion a year before, while pretax profit fell 5.7% to USD640 million from USD679 million. Ongoing revenue rose 4.3% to USD9.89 billion from USD9.49 billion, while trading profit rose 9.5% to USD782 million from USD714 million. The company attributed the performance to continued market share gains in the US. In the US, Ferguson posted revenue growth of 5.0% and underlying trading profit growth of 5.7%. Ferguson raised its interim dividend by 7% to 67.5 US cents from 63.1 cents. The company makes a bulk of its revenue in the US and said the demerger process for its Wolseley UK business is on track and expects to complete the transaction within the current calendar year. The company named DS Smith Chair Gareth Davis to chair Wolseley once the process has completed.
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Antofagasta chopped its full-year dividend, although it posted an earnings rise on Tuesday, with the Chilean miner adding it is in "good shape" despite copper prices falling due to the Covid-19 crisis. In 2019, Antofagasta's revenue climbed 4.9% to USD4.97 billion from USD4.73 billion. Pretax profit rose 7.7% to USD1.35 billion from USD1.25 billion. Earnings before interest, tax, depreciation and amortisation rose 9.5% to USD2.44 billion from USD2.23 billion. Boosting earnings was a 7.6% rise in copper sales volumes to 772,200 tonnes from 717,600 tonnes. Average realised copper price fell 2.1% to USD2.75 per pound from USD2.81. Antofagasta's 2019 payout was chopped by 21% to 34.1 cents per share from 43.8 cents.
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COMPANIES - FTSE 250
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Foreign exchange services provider Finablr said it has appointed an unnamed accounting firm to undertake "rapid contingency planning" for a potential insolvency appointment to maximise value.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Stobart Group said discussions regarding a potential minority investment in its London Southend Airport have been put on hold due to the new coronavirus outbreak. The aviation and energy group said Covid-19 has hit traffic at the airport. It is taking measures to conserve cash and cut costs, but additional liquidity is likely to be required.
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Old Mutual said it has promoted Independent Non-Executive Director Peter de Beyer to the role of lead independent director with immediate effect. The pan-African investment, savings, insurance and banking firm noted de Beyer's "leading role" in the listing of demerged Old Mutual Ltd on the Johannesburg Stock Exchange back in June 2018. At present, de Beyer is also a non-executive director at Oceana Group Ltd and Real People Investment Holdings Prop. He is a former Old Mutual employee, working there from 1978 to 2008 before his retiring his then role as managing director of customer solutions for Old Mutual South Africa.
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COMPANIES - INTERNATIONAL
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Credit ratings agency S&P downgraded its rating for aircraft manufacturer Boeing due to the grounding of the 737 MAX and the Covid-19 pandemic. "Boeing's cash flows for the next two years are going to be much weaker than we had expected, due to the 737 MAX grounding, resulting in worse credit ratios than we had forecast," S&P said in a statement. "In addition, the significant reduction in global air travel due to the coronavirus will likely result in an increase in aircraft order deferrals, further pressuring cash flows." It lowered its rating for the company to BBB from A-.
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Australian flagship carrier Qantas Airways and its budget airline Jetstar will cut their international flights by 90% until at least the end of May due to a drop in demand for travel amid the global coronavirus crisis. The reduction "largely reflects the demand impact of severe quarantine requirements on people's ability to travel overseas," Qantas said in a statement on Tuesday. Some 60% of domestic flights will also be slashed. The move will see around 150 aircraft grounded, Qantas said. The Australian government announced a mandatory 14-day self-isolation regime for all arrivals into the country on Sunday.
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Tuesday's Shareholder Meetings
CareTech Holdings
BlackRock Energy & Resources Income Trust
Blue Prism
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By Tom Waite; thomaslwaite@alliancenews.com
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