Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Furniture retailer ScS [LON:SCS] has this morning announced it will need to delay the release of interims as the company assesses the impact of the latest COVID19 advice from the government. A trading update for the first half is however supplied, showing a modest uptick in both revenues and profits. Order intake was down however, but looking at the first seven weeks of the current trading year, this pattern had been reversed, presumably with shopper confidence bolstered by political clarity off the back of last year’s election. The COVID-19 risk remains difficult to judge, but rough times seem set to lie ahead – this is a business that remains dominated by physical rather than online sales.
More gloom from the retail sector, with Dixons Carphone [LON:DC] announcing the closure of all its 531 stand alone Carphone Warehouse properties. This is seen as a critical part in the successful turn around of the business unit, which will make a £90m loss this year. With customers increasingly wanting to shop online, the physical presence will be maintained through store-in-store arrangements across the Currys PCWorld network, but job losses will be inevitable.
Compass Group [LON:CPG] have published a trading statement this morning, reflecting their outlook in light of COVID19. Government attempts to contain the spread have impacted expectations and revenues for the first half are now tipped to be down around 25% leaving operating profits for the period £125m-£225m lower than forecast. Interims are due in just under two months’ time but with shares having already lost 40% of their value over the last four weeks, will this news be able to exert any fresh downside pressure?
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