Mindful Money’s weekly shares watch: Carpetright, Dixons Carphone & Keller

14th December 2015


Helped by a strong flow of positive market updates Carpetright’s shares have surged over the past year and investors will be eager to hear more good news when it reports its half-year results on Tuesday.

In its October trading update the FTSE All-Share listed business, which has witnessed its stock soar by 54% over the last 12 months, reported a 4% increase in like-for-like sales

Keith Bowman equity analyst at Hargreaves Lansdown Stockbrokers said full-year adjusted pre-tax profit is currently forecast to grow by more than 20% to just over £17m.

Looking ahead to this week’s report, he added: “An update regarding strategic initiatives including a trial of new retail store concepts and continued store portfolio management in order to reduce costs is expected.

“Ahead of the news and with management actions combined with the tailwind of a still buoyant UK property market, analyst consensus opinion currently points towards a ‘buy’.”

Wednesday sees Dixons Carphone, up 8% over 12 months, publish its own set of half-year numbers. Graham Spooner, investment research analyst at The Share Centre, who has the firm down as a ‘buy’ highlighted that the electronics retailer has beaten market expectations since its merger last year and analysts have been steadily raising their forecasts in recent months.

He said: “In September the company reported like-for-like sales rising in the UK by 10% in the first quarter, boosted by sales of the latest iPhones and TVs.

“With its strong focus on its online sales some analysts believe the group was one of the best performers on Black Friday and Cyber Monday. These interim results will give us a strong indication of whether that was the case.”

Bowman noted that despite tough comparatives, such as last year’s launch of the iPhone 6, UK and Irish second quarter trading is likely to have remained robust where first quarter like-for-like sales rose 10%.

He said: “An update on Carphone’s joint store venture with Sprint Corporation in the US and a possible rollout of store could be forthcoming, whilst comment regarding further UK store closures and merger cost savings potentially made.

“Prior to the results and with market share gains recently achieved and the company seen as a likely beneficiary of the expected growth in the so called ‘internet of things’, analyst consensus opinion currently signifies a ‘strong buy’.”

FTSE 250 listed engineering specialist Keller Group delivers its fourth quarter pre-close market update on Thursday.

“Keller are not likely to say too much different from their last trading update published in November: trading should remain in-line with expectations,” said Spooner, who echoing the general market consensus is calling the firm a ‘buy’.

He added: “It is likely to say that trading in the US remains good as a result of the strong construction markets while Canada remains challenging. European and Australian businesses are likely to have remained stable. The order book should be about 20% ahead of the same period last year and investors will be keen to hear on the progress of integrating its acquired businesses.”

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