Currys Share Discussion Threads

[tim 3] 10/10/2019 22:39

But do people still buy mobiles in physical stores?

Well obviously they do but I suspect the number buying direct from the providers on the net or other web sites is increasing.

I have not for years the likes of U Switch and other internet sites AlWAYS get me a better deal in my experience usually by a fair amount.

Also mobiles are in many ways ideal for buying online I really dont think people are that concerned about seeing it in a store at the end of the day all you see is a screen.

In fairness mobile.co.uk that DC own is a very good site and competitive and I have bought from them before with very good service and price (much cheaper than cpw)

Their physical(CPW)stores must cost a fortune to run as they always have their own dedicated staff and counting the stand alones their are 9 outlets in our city alone and I just wonder with the lower margins they now run with they can return these to profit.

[wigwammer] 10/10/2019 09:15

0.14x sales is very low, even adjusting for the pension deficit. I can see a future for an network independent seller of phones and tablets. The difficulty with going into an 02 or Vodafone shop is you may not have a contract with them, you may not want a contract with them, and you may want to look at the products without being pressured by someone trying to sell you a contract :)

[tim 3] 09/10/2019 00:11

While not long here at present they are not exactly priced for growth.

[geoffthree] 08/10/2019 17:16

Hedgefunds increasing shorts on DC. Shorttracker shows Citadel shorting another 0.1% of shares on Friday last week.

A strong sell signal too in the chart at the moment.
Retail sector is reporting a loss of growth generally. Everything seems to be pointing in one direction (downwards) for this share.

[givememymoneyback] 08/10/2019 10:33

Recruitment firms reporting lower growth (Page and Rob Walters) this morning and the construction firms reporting the same (SIG). These are the two sectors that get hit first in a recession, and retail follows soon after. I think it's becoming obvious that a global recession is about to land hard. Big ticket TVs and kitchen appliances are likely to stay on the shelves. People will keep their existing tech for much longer. My guess is that DC's pension deficit and debt is about to catch up to the business in a catastrophic way. I think the fall to 80p a little while ago is likely to be repeated, and then continued. If you're long here, dyor. But do it fast.

[geoffthree] 07/10/2019 19:18

I think this is headed down steadily now with the rest of the retail sector. I'm guessing profits will have been sacrificed to maintain volume. Presumably the founder and ex-chairman was selling for a reason.

[jsforum] 05/10/2019 13:34

I wish I could share your optimism. While credit purchases are booming stores are continuing to focus on low margin products with care plans where they get away with it

[anony mous] 18/9/2019 09:36

Charts looks like it has turned nicely forming up to 1.65 then 1.80.Would be a good run up to Christmas and New Year.

[medicman1] 16/9/2019 23:11

Guys- what are the latest broker estimates are for DC? I wondering whether to cut my 35% losses....what does everyone think at the minute?

[stdyeddy] 16/9/2019 08:39

Seems I'm not COMPLETELY alone on feeling negative about DC. Hedge fund Citadel increased its short last week by 0.18% of total shares. Two hedgies now shorting over one per cent of the shares.

[stdyeddy] 13/9/2019 11:33

The former chairman continues to sell; another 1.23% of the overall shares; he's now sold a quarter of his holding in the space of a week with the share price close to a ten-year low. Meanwhile the share price seems unaffected by his decision to sell low and large; am I missing something?

[bookbroker] 10/9/2019 20:04

3061 - needed the cash to buy Talk!

[sao1] 10/9/2019 19:55

Good post. Thanks.

[stdyeddy] 10/9/2019 19:09

Remarkable RNS today; please let me know if I'm getting any part of this wrong, but it looks like Sir Charles Dunstone, co-founder of Carphone Warehouse and a former DC chairman, sold more than 10% of his holding in the company last week on the ex-dividend day -- no point in missing the dividend before one sells down -- and managed to avoid seriously denting the share price on the day. He appears to own less than 9% of the business after the sale.

RNS came out today at around midday, and the share price thereafter slipped a little. Anyone seen any news on this and his rationale for selling? I'm assuming it's because the direction for the share price is down from here.

[stdyeddy] 06/9/2019 12:45

No outright calamities, true, but I think the important issue is likely to be profitability, particularly since they appear to be paddling fast, just to stay still on total revenue. DC's headline profitability on electricals (I think we can safely write off mobile for now) is just under 4%. At least three factors are likely to be pushing this down even further:

1. The shift online, which involves facing off directly against cheaper online competitors (eg Amazon, with no retail estate to support).
2. The drop in sterling, which I estimate to be around 4% lower, averaged over Q1 compared with the previous year -- imported product (ie everything) is more expensive; has DC passed on higher costs to consumers? I am guessing that they've had to absorb some of it, especially since the market is moving online where customers compare directly and quickly against Amazon and others (see 1 above).
3. Costs in the UK have risen across the board (wages, energy, premises costs etc) while footfall in retail is falling inexorably, making the stores more expensive to operate/less profitable.

Lower profitability for the group is likely to push up finance costs because: (from the accounts) "The actual margin applicable to any drawing depends on the fixed
charges cover ratio calculated in respect of the most recent accounting period." In other words, (as I understand it) if the profit declines and requires a higher ratio to cover the interest, the lenders will increase the cost of the lending (to offset the greater risk). A standard lender response to declining profits and higher risks.

In the meantime, a significant pension deficit lurks in the background.

Unless something has changed around the economics of taking a product off a pallet; putting in a store/storeroom; putting it in the hands of a customer; and paying for the product and all expenses; I've got a feeling that the interims will continue the downward trend for this share.

My guess is that the next move for DC must surely include a more drastic reduction of the dividend.

[tim 3] 06/9/2019 08:58

Update as expected really no nasty surprises and away from mobile some good growth.

Mobile issues still unresolved though.

Bear flag failed.

[time 2 retire] 05/9/2019 08:08

Looks good to me, it's a trading update not a set of results which are due in December.

Market seems to like it too so far, already pulled back todays 4.5p x divi.

GLA

[stdyeddy] 05/9/2019 07:40

Trading update looks ominous. No word on profitability. This is a loud omission, especially since we know that DC closely monitors this. Revenue is worthless without profit.

Mobile continues to wipe out the entire revenue efforts of the group, offsetting any gains elsewhere. What's not being said is the cost of achieving the small gains in market share. The pound is on the floor and has been for much of this quarter; DC must be paying more for product - are the increases being passed on successfully to consumers? I suspect not.

I thought they had 'renegotiated' mobile contracts to achieve better revenue. The minus 12% revenue suggests that this has not worked.

[tim 3] 31/8/2019 11:57

Also looks like a bear flag forming.

[computercoders] 31/8/2019 11:53

2 white candles on my chart. A third comfirms bullish

[jondev] 29/8/2019 19:11

Ex dividend on 5 sep

[tim 3] 26/8/2019 08:46

Hi

Yield is 6.2 with 4.5 final (goes ex this week) and 2.25 interim.

Unless they cut again as they announced they would earlier this year and they also announced their policy of raising dividends was over.

Thats my understanding anyway.

[computercoders] 25/8/2019 11:14

Looks cheap. Have I worked out the dividend correctly as being 4%?

[tim 3] 14/8/2019 14:00

Getting interesting again last time it went sub a quid was good buying opportunity.

[tim 3] 12/8/2019 09:22

Thanks GMMMB

Interesting didn't they say it was all about building relationships with suppliers?

In any event is it really wise to do that when they need 02 more than the other way round can't see them doing carphone any favours now!