Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Dixons Carphone
Dixons Carphone [LON:DC] have published a trading update, again showing itself to be one of the beneficiaries – at least in the short term – of having many of its consumers stuck at home. Stores have been closed in response to the COVID-19 outbreak, but online operations continue apace. For the three weeks to March 21st, group sales were up 13% from the same period last year, with the sweet spot being the online channel. UK & Ireland web sales rose an incredible 72%, but such a response will inevitably be short lived. To this extent, the company has advised that previous profit and debt guidance will not be met for the full year.
Topps Tiles
An interesting update from Topps Tiles LON:TPT this morning who have similarly shut their stores but don’t have the online channel to fall back on. The company welcomes the various government support packages but critically outlines the consequences of stores being closed for 12 weeks, then having trading materially impacted for another quarter. At this scenario, it believes liquidity can be maintained for the remainder of the year and bankers who have seen the modelling remain supportive. It’s the speed of that rebound that arguably poses the biggest threat.
Reach
News publisher Reach LON:RCH also provides a trading update, which seems slightly lacking in detail. The company ought to be well placed to engage more with its audiences, many of whom now have more time on their hands. However, with advertisers reigning in expenditure, newspaper sales being squeezed and physical events hugely disrupted, this is likely to be a difficult equation to balance. More details are expected in the 7th May AGM trading update, but this note has arguably answered few questions.
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