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.
Downgrade: A drop in the number of customers upgrading their mobile phones led a star broker to slap Dixons Carphone with a double downgrade yesterday
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 10 per cent rise in profits and a 4 per cent like-for-like jump in sales.
Yesterday, shares fell 7.2 per cent, or 19p, to 246.7p, wiping £220million 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 1.08 per cent, 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.
STOCK WATCH – OXFORD BIOMEDICA
Oxford University spin-off Oxford Biomedica has entered a £2million project to improve gene and cell therapy.
The firm, which has surged 124 per cent this year due to its involvement with a leukaemia therapy, will lead the project, which is co-funded by government investor Innovate UK.
The therapy aims to cut the time it takes to get new treatments on to the shelves, enhancing the UK’s position as a research hub.
Shares fell by 1.3 per cent, or 0.12p, to 9.18p.
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 5 per cent 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 £220million bond debt. Shares rose 14.3 per cent, 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, prospects currently make it a great- value buy. Shares fell 2.4 per cent, 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 20 per cent to £185million. Shares fell 1.1 per cent, 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 0.3 per cent, 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 61 per cent to £9.5million on revenues of £180million, up 6 per cent. Shares fell 0.1 per cent, or 0.25p, to 215.5p.