Dixons Carphone, GVC and Connect Group

“The FTSE 100 nudged 4 points higher to 7,735, propelled by gains in banking and utility stocks,” says AJ Bell investment director Russ Mould.

“Dixons Carphone’s trading update is a big relief to the market even though the CEO is leaving and the upper end of its full year pre-tax profit guidance has been trimmed from £400m to £385m. Investors clearly like the fact that Christmas trading at 6% like-for-like sales growth isn’t in the disaster territory experienced by many other retailers. The new CEO, Alex Baldock, also looks like a good fit with considerable experience in digital. His online expertise is likely to fuel speculation that Dixons will reduce its physical store estate. It suggests that Dixons is going to join the New Year fitness craze and attempt to be slimmer in order to be stronger.

“A media report that the Government’s new culture secretary Matthew Hancock favours a £2 maximum stake on fixed odd betting terminals (FOBT) has triggered a share price sell-off in the gambling sector. Although bad news for some companies, GVC could come out of this quite well as it would have to pay less to buy Ladbrokes Coral, as part of the takeover deal was dependent on the outcome of the FOBT review. It’s worth bearing in mind that the consultation period doesn’t end until tomorrow, so the £2 level is not set in stone.

“The trading update from parcel delivery-to-magazine distributor Connect Group is a real mess, triggering a profit warning. Contract delays, weaker margins, uncertain market conditions in part of its freight business and slower than anticipated cost cutting have sunk the share price. The sale of its books division has also tripped up. The company reassures on the dividend, but the yield for 2018 now stands at 13% based on dividend forecasts prior to today’s news. Analysts had already begun to question the logic of paying high dividend payments and that concern is likely to intensify after today’s earnings setback.”

These articles are for information purposes only and are not a personal recommendation or advice.