|Domestic & General Group
||EPS - Basic
||Market Cap (m)
Real-Time news about Domestic & Gen. (London Stock Exchange): 0 recent articles
|tole: AD - You mean why it happenned? Have a read of the below regards takeover rumours.
Domestic & General unveils higher FY profits, quashes takeover rumours UPDATE
Household appliance insurer Domestic & General Group PLC delivered stronger full-year profits, and quashed rumours of a takeover approach which fuelled a surge in the group's share price last month.
The company, which provides warranties on some 5.7 mln domestic appliances in the UK and mainland Europe, said pretax profits before goodwill and exceptionals for the year to March 31 2005 came in at 29.0 mln stg, a 26.1 pct increase on the previous year.
The group's pretax profits after goodwill, at 29.7 mln stg, were 22 pct ahead of a forecast from analysts at Altium Securities, who upgraded the shares to 'buy' from 'reduce'.
The profits uplift partly reflected a jump in investment income, which rose to 11.1 mln stg from 10.9 mln stg a year earlier, fuelled by higher interest rates and stronger equity markets. Domestic & General also benefited from steady growth in warranty revenues and subdued claims expenses, which boosted warranty profits to 191 mln stg, a 38 pct increase on the previous year.
Chairman Nicholas Rochez said in a statement that Domestic & General had received "no indication of any interest from any third party," scotching rumours of a takeover approach which caused a sharp rise in the group's share price last month. He blamed speculative trading through contracts for difference (CFDs), and said stock market rules should be changed so as to oblige investors who hold CFDs in a company to disclose their interest.
"It is essential that companies are able to readily identify their shareholders. What is not acceptable, in a regime that demands transparency, is the unaccountability and, at best, opacity of such trading instruments," Rochez said.
Domestic & General shares, which stood 1.23 pct higher at 740 pence by about 9.40 am on Tuesday, had briefly spiked above 900 pence as the takeover rumours emerged in late March and early April.
The company said the new financial year had started well, adding that it expected to make further progress despite signs of a contraction in consumer spending.
Chief executive John Pearmund said the group's strong focus on warranty renewals would enable it to weather any decline in purchases of new appliances as consumers tighten their belts.
"We're perhaps not as affected as other businesses might be," he told AFX News.
Pearmund added that the claims ratio -- claims expenses expressed as a proportion of premium income -- had fallen to 45-50 pct from 47-55 pct last year as the group stepped up its focus on electrical goods, which are less prone to breaking down. He said he expected claims to remain within the lower band for the rest of the current year.
Domestic & General set a final dividend of 18.5 pence per share, taking the total payout to 27 pence, a 15 pct increase on the previous year.|
|tole: A bit dated but a nice summary...
Domestic & General - BUY
Domestic appliance warranty provider Domestic & General served up another fine set of results for the year to March. Turnover was up 4.5% to £220.7m and pre-tax profits improved 26% to £29m (based on 2004 pro-forma results). In spite of covering over 5.7m appliances and processing 1.4m claims each year, D&G enjoys a low claims ratio of 45.6% compared to the average 47.2%. It should also be largely unaffected by the recommendations of the Competition Commission enquiry into the point-of-sale extended warranty market, as it only represents 3% of D&G's total sales. On the expansion front, a new mailing facility opened last June that tripled capacity. This will benefit the support services division, which offers direct marketing, mailing, fulfilment and administration capabilities to its warranty partners and third party customers. D&G has warranty business in Germany, France and Spain but, as the market is undeveloped in Europe, the company and its pan-European clients believe there is good growth potential. Deputy chief executive John Ritchie states that, while sales of retail goods are falling, warranties are resilient, as consumers are less likely to replace goods and more likely to renew warranties and most of D&G's business is captured from data stored up from years before. In keeping with its tradition of increasing its dividend by at least 10% each year for the past 18 years, the total dividend increased 15% to 27p. House broker Collins Stewart is upgrading its forecast. Buy for growth.
Market cap: £265.9m
PE Forecast: 14.1
Share price: 740p|
|saucepan: There are two threads for DGG: "Share of the Day" and "Undervalued?": both dormant.
I have taken a position in DGG: "undervalued" seems more appropriate than "share of the day" at present, so it is here that I am setting out to find whether anyone else is following this stock and has any views.
I like the chart, and the short term at least seems good for a bounce (which seems to have started on Friday):|
|salpara111: Interesting situation. Personally I have taken out a short at 925.
Given that the stock has risen so dramatically over the last few weeks the company would be obliged by stock exchange rules to come out and say, for example that they were in preliminary bid talks which might or might not lead to an offer being made. The fact that that has not happened leads me to believe that it is just a lot of smoke and mirrors. I made a good return doing the same thing recently with Excel when their share price spiked on unsubstantiated rumors that there was a bid coming.
I am working on a worst case scenario of a bid materialising at 950 with a loss of 25 points to me but the downside is that it will ease back at least 100 from my entry point of 925.
Let the fun commence!|
Domestic & General share price data is direct from the London Stock Exchange