Troubled UK electricals and mobile phone retailer Dixons Carphone (DC.) reported a 24% slump in annual profit on Thursday, as expected, and said it would take time to turnaround the group’s performance in a tough market.

Dixons Carphone, the victim of a cyber attack recently, posted pre-tax profit of £289m for the 12 months to 28 April 2018 versus £404m in the previous year. Like-for-like sales were up 4%.

The company said profit margins had been hit by ‘challenges in UK mobile’ and ‘contractual constraints,’ with chief executive Alex Baldock, who took over just two months ago, admitting that ‘we have plenty of work to do, and it will take time, but I'm even more confident than the day I took the job in our long-term prospects.’

Yet the shares rise around 2% in early trade on Thursday to 194.45p, with market watchers believing that the results look a little better than feared given the kitchen sink job done by Baldock three weeks ago.

Overall the markets open in positive mood in early Thursday trade with the FTSE 100 index rallying around 40 points, or about 0.45%, to 7,667.23. All of the UK’s main indices also start trading on the front foot.

SKY RALLY CONTINUES ON DISNEY OFFER

Pay-TV firm Sky (SKY) sees its share price nudge another 1% higher to £13.94, after rising more than 3% on Wednesday, when US entertainment giant Disney raised its bid for the UK broadcaster.

Defence contractor Chemring (CHG) reported a 5.2% rise in first half operating profit and said it sees more benefits from increased US defence spending.

But strip out the effects of the falling pound and operating profits growth came in at an impressive 14%, encouraging buyers into the market and sending the share price roughly 1.4% up to 220p, their highest in about two and a half years.

Shares in insurer-to-travel provider Saga (SAGA) nudge close to 1% higher to 128.3p after reassuring investors with an in-line trading update ahead of its annual general meeting.

The company has recently overhauled its travel business, which you can read about in more detail here.

TOGETHER WE’RE STRONGER

Investment trust Dunedin Smaller Companies (DNDL) has announced plans to merge with Standard Life UK Smaller Companies Trust (SLS) in an attempt to overcome scale problems that have put off many investors.

The trust says today that it hopes that the ‘significantly larger investment trust, with a strong investment track record, a stronger rating, a robust discount control mechanism and substantially greater secondary market liquidity.’

Investors whole-heartedly back the move, sparking a rally of more than 11% in the shares of Dunedin to a five year-plus high of 318p.

BEST OF THE REST

Shares in housebuilder Crest Nicholson (CRST) get a lift after analysts at broker Liberum slap a buy rating on the stock and set a 528p share price target. The stock rises 4% to 415p.

Gold prices posted a six-month low on Thursday, pressed down further by a firm dollar and as the US Federal Reserve Chair confirmed an outlook for higher interest rates in the United States.

Oil prices fell on Thursday as Iran signalled it could be won over to a small rise in OPEC crude output, potentially paving the way for the producer cartel to agree a supply increase during a meeting on Friday.

Compass (CPG), Experian (EXPN), Land Securities (LAND) and United Utilities (UU.) trade without entitlement to their next dividend pay-out on Thursday, trimming 2.6 points off the FTSE 100, according to Reuters’ calculations.

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Issue Date: 21 Jun 2018