Currys Share Discussion Threads

[mikepompeyfan] 30/3/2015 08:21

One other thing which may be affecting the share price Some people will be selling to use up their 2014/15 CGT allowance. After the rise last year it makes sense to lock in some tax free profit.

[tim 3] 28/3/2015 10:01

They are doing a full re fit into a Pc World/Currys/Carphone 3 in one store near us think its one of the first.

Will be interesting to take a look.

[anony mous] 27/3/2015 13:16

That's what I was thinking mike.No news or lack of for few months and also bt entering market.Q1 is always a slow one.Might drift abit lower but being in ftse100 will help.

[mikepompeyfan] 27/3/2015 13:06

No trading news expected until 3rd June Q4 statement, so share price dependent on market sentiment until then l guess. Apart from the weak market generally the only other thing l can think of is BT's new presence in the mobile market. Maybe some think they will take business from dc. ?

[anony mous] 27/3/2015 12:39

Dropped much more than I thought it would.Sp at 4.11 now.Top up now or is the going sub 4.00 ?

[mikepompeyfan] 26/3/2015 06:44

Two years ago, it was losing €10m a year. But today, The Carphone Warehouse's Irish operation is back in the black. And the retailer, which has almost 100 outlets here, is about to spend €30m on the launch of a new mobile operator for Ireland.

The new mobile network, as yet unnamed, is being headed up by one of Europe's most experienced 'virtual' operator specialists. Having put a sim card in Amazon's Kindle in 2007, James Gray has been responsible for 14 virtual operator launches, including major UK virtual operators Talk Talk, Asda and Mobile By Sainsburys.

So what will be different about this operator? Will it offer more data? Will it be cheaper?

Maybe, says the 45-year-old Englishman. But its main weapon will be to fix things that annoy people most, such as being denied upgrades when new phones come out.

"Two years is too long to be locked," he says. "We know that there are people who want to upgrade far earlier than 24 months. It irritates consumers that there's no flexibility."

This is a common problem for people buying iPhones or Samsung Galaxy handsets. The latest, greatest model is often unavailable because of a long contract.

"The model for buying a mobile phone hasn't changed in 20 years and the subsidy model we have is last century stuff. So we're going to construct it so that you won't be locked into a tariff forever."

This might also go for issues such as data allowances and calling minutes, he says.

"People get annoyed by rigid allowances," he says. "If they sign a contract there are still so many things that could happen in their lives that could change their needs, yet they're inflexibly bound."

Despite its throwback trading name, The Carphone Warehouse packs a hell of a retail punch in Ireland. It has 95 outlets around the country, including 77 standalone stores and 12 concessions in Harvey Norman superstores.

With a stated 'footfall' of over 6m per annum in Ireland, it also recently merged with Dixons, giving it stronger hand when it comes to negotiating with top tier brands such as Apple.

In 2013, the Irish operation posted a loss of almost €10m. Last year, this was reversed into a €2m profit. So why not stick with what's working? Why launch a mobile operator, especially with margins in that sector becoming ever-thinner?

"This market is a great one to go into because there aren't that many operators here," says Gray. "Look at the UK. You've got over 100 mobile virtual operators over there. Ireland is a small market but there's an opportunity to make a difference here and to be profitable. This is a strategic investment for The Carphone Warehouse with €30m being put in initially."

The number of operators here, compared to the UK or other European countries, is indeed small. There are three main networks: Vodafone, 3 (incorporating O2) and Meteor. There are also four significant virtual operators: Tesco Mobile, Lyca Mobile, PostFon and 48. (Eircom's eMobile is generally counted as part of Meteor by analysts.)

If Carphone is to succeed, it must take customers from one or more of these seven operators. Who is most vulnerable?

"The most likely acquisitions will be from the big players [Vodafone, 3 and Meteor] because they have the most customers," says Gray. "And because they're the biggest, they probably have the least flexible organisations too. So the biggest slice, I think, will be from the main network operators. But we'll take from anyone, including Tesco or the other MVNOs."

The other reason that Carphone is launching here is because of the relatively generous terms of the deal with 3, hich were mandated by the European Commission in exchange for 3 getting permission to buy O2 Ireland.

Under the deal's terms, Carphone has a large guaranteed tranche of 3's network capacity, with which it can do whatever it wants. That allows it to offer aggressive customer deals on issues such as data allowances and to plan years in advance without worrying too much about 3 changing its conditions.

Carphone is not the only new mobile operator to launch this year. UPC also jumped to take advantage of the 3/O2 acquisition deal and will debut its own new mobile operator sometime in the coming months.

In UPC's case, the appeal will be simple: throw an extra few euro onto your TV or broadband bill and you'll get a mobile service too. This 'bundling' strategy is touted by some market analysts as a killer feature for keeping telecoms customers and is working for both Eircom and Sky for broadband.

Despite its retail footprint, won't Carphone Warehouse struggle without the 'bundling' bonus?

"It's a tough one," says Gray. "But a mobile phone is very much a personal purchase. While a head of household is often the one to choose utilities or TV and broadband providers, choosing a mobile network is a more personal decision. Kids, for example, will want to be on the same network as their friends and not on the same one as their Dad. I think the bundling issue hasn't been proven in mobile yet."

Gray won't say whether new plans will include 4G by default, indicating that the operator may charge extra for it. He is also tight-lipped on the company's plans for data allowances. Both issues are increasingly seen as the crunch commercial topics for operators and customers.

But one tricky concern that the new operator will have to overcome will be the fear among other mobile networks that Carphone Warehouse retail staff are pushing the in-house brand over rival operators.

Gray says that this shouldn't happen.

"We certainly hope that there will be a customer bias," he says. "And we'll be advertising hard. But the Carphone Warehouse retail promise is to give customers the phone that's right for them. And our product won't be right for absolutely everyone. So the sales guys, even though they'll be enthused about it, will also be selling the customer what's right for them."

While the new operator already has 25 people working for it, it plans to fill that number out to 50 by launch.

Gray says that he will not be leading the new operator for long after it is launched. He has a wife, a family and an old Ferrari he loves back in England. Both he and overall Carphone Warehouse Ireland boss Peter Scott are currently looking for a replacement chief to run the new operator when he goes.

But why does he do what he does? Why choose telecoms for a career over, say, a glamourous dot com startup?

"I genuinely enjoy it," says Gray. "And I'm not even a tech guy. I get my wife to set up the laptop. But there are people like me who enjoy massively what tech delivers for them and this is going to make a difference. I like being able to say that I was part of a shift. I felt the same way when I worked for Vodafone and we put sim cards into Amazon's Kindle. It was remarkable, a real wow moment."

Launching an operator, he says, can be a lot harder than it looks.

"Telecoms is a difficult and a complex market. Things like getting your pricing right when it comes to interconnection rates are critical. Also, things like simplicity for consumers are vital.

"In 14 MVNOs I've made many mistakes and have the scars to prove it. But I won't make those mistakes here, so it's all about the learning process."

Six things: Gray on...

On what the new mobile operator will offer

"Flexibility. Two years is too long to be locked out of a phone upgrade."

On who the new operator will take business from

"The big players [Vodafone, 3 and Meteor] because they have the most customers and are probably the least flexible."

On the rationale behind starting a new mobile operator

"Ireland is a great market to go into because there aren't that many operators here. The UK has over 100."

On not having a 'bundle' to offer

"Bundling hasn't been proven in mobile yet. Choosing an operator is a personal thing."

On making mistakes

In 14 MVNOs I've made many mistakes. But I won't make those mistakes here. It's a learning process.

On fears of an in-store bias

"Sales guys, even though they'll be enthused about it, will be selling the customer what's right for them. Our product won't be right for absolutely everyone."

[anony mous] 04/3/2015 09:09

577As I said.

[tim 3] 25/2/2015 09:56

cant understand why anyone would buy AO at their ridiculously high valuation.

don't like the sound of that update at all,sounds like they are trying to make excuses for what is basically poor performance.

[mikepompeyfan] 25/2/2015 08:13

Good. That means they're finding the competition from dc. tough for them. ;-)

[muscletrade] 25/2/2015 07:22

Profit warning from AO world this morning.

[anony mous] 24/2/2015 16:43

Had nice little run.Expecting some pull back before any further rise.Needs to really range to 4.24 to 4.29 then up again.

[mike740] 24/2/2015 15:44

DC. Dixons Carphone should benefit from rotation from defensives to cyclicals now that we see an increase in Living Standards...........

[mikepompeyfan] 20/2/2015 08:25

Mutter from the gutter of a 290p-a-share private equity bid helped Argos owner Home Retail put on 7.6p to 208p. On the other side of the street, Dixons Carphone buzzed 8.6p higher to 441.6p on talk of a pending upbeat circular.

[anony mous] 18/2/2015 16:16

There is a good article bbc news about internet of things IOT yesterday.Worth a read.

[hmrc inspector] 18/2/2015 13:04

With the economy roaring back to life, Britain's retailers look set to report an impressive set of sales figures for 2015. And three of the best retail picks are Dixons Carphone (LSE: DC), Home Retail (LSE: HOME) and NEXT (LSE: NXT).

Growth at a reasonable price

After electronics retailer Dixons merged with Carphone Warehouse last year, the enlarged group has set out on an ambitious growth tangent.

According to City forecasts, the group's earnings per share will expand by 24% during 2015, 20% during 2016 and 12% during 2017. Even though the company currently looks expensive, these figures show that the growth is worth paying a premium for.

Dixons Carphone currently trades at a forward P/E of 18.3, falling to 15.5 by 2016. Further, there's a high chance that these City forecasts could be revised higher as consumers increase their discretionary spending in line with wage growth.

[mikepompeyfan] 13/2/2015 11:19

.. and it looks like there well may be support at £4.20 or thereabouts ;-)

[mikepompeyfan] 12/2/2015 12:29

Got to be good news for sales.

Households will feel richer this year than they did at any time during the decade before the financial crisis, the Bank of England has predicted, as it upgraded growth but warned deflation was imminent.
Projections in the Bank’s quarterly Inflation Report show that real, post-tax disposable household income this year will increase by 3.5 per cent, more than the annual average between 1998 and 2007.
The boost to household incomes has been driven by a combination of cheap oil, lower mortgage costs and lower tax as more workers benefit from the increase in the personal allowance.
As a result, the Bank predicted that growth this year will be 2.9 per cent, its strongest in seven years, and increased its GDP forecast for 2016 from 2.6 per cent to 2.9 per cent.
“The combination of raising wages and falling energy and food prices will help household finances and boost the growth of real take-home pay this year to its fastest rate in a decade. This will support solid growth in consumer spending,” said Mark Carney, the Bank’s governor.

[xxx] 12/2/2015 04:45

Good question.It was overbought [ eg.deviation from 200 day ma.] but I was wrong footed after what I thought was a good trading update which I thought would carry it to @480. Currently I think that regaining 420 is imp. Next step is to cl above 430. Imv this could lead to 445/60 area...

[jondev] 09/2/2015 15:21

Can anyone tell me why it keeps going down. I thought there was support at 420p.

[hmrc inspector] 04/2/2015 18:09

Dixons Carphone edged up 2p to 431p after Barclays dismissed concerns about the effect of proposed consolidation the mobile industry would have on the company. Analysts Christodoulos Chaviaras and Maurice Patrick said:

In light of BT and 3UK entering into exclusive talks to buy EE and O2, respectively, we analyze the potential impact network consolidation could have on Dixons Carphone’s profitability and conclude that investors may be overly pessimistic. We would not dismiss that network consolidation will be a prevailing theme in 2015 but our analysis suggests that at the current share price investors already assign a 50% probability for Carphone UK to be worthless. We understand that Dixons Carphone has signed binding long-term contracts with all network operators at least until 2020 that should support mid-term profitability.

The worst case scenario in which all networks abandon Dixons Carphone after 2020 could potentially cost Dixons Carphone £170m of lost earnings before interest and tax or 130p a share on our estimates, but we consider it a tail event distant in the future for which we assign a 10% probability. We do not change our estimates but bring our price target down by 10p to 480p to incorporate this scenario. We reiterate our overweight rating.

[ih_500869] 04/2/2015 12:28

04 Feb 2015 Dixons Carphone DC. Barclays Capital Overweight 429.65 429.00 - - Reiterates

[mike740] 02/2/2015 08:44

Dixons Carphone – buy, sell or hold?
By Robert Sutherland Smith | Sunday 1 February 2015

We have had a recent trading statement from Dixons Carphone (DC.), the recently merged Dixon’s Retail and Car phone Warehouse companies, which I had reviewed positively in late May 2014. The pre- merged Dixon’s Retail share price was then 44p in its old form. The adjusted share price chart indicates that the new form share price was then around 300p. In the next seven months, the share price rose reaching a peak of 470p last month – a useful increase of an estimated 56%. Since then, the share has retreated 8% to 345p. So where does it go from here?

The merger was an exercise of desperation from companies in highly competitive markets. Dixons was doing particularly badly; something that is reflected in its last set of margins and returns. Last year to March 2014, its gross margin was a modest 9%. The fact that it had a net profit margin of any kind must be a tribute to tight management. In the event, it had a net margin reported as 0.73% and an operating margin of a reported 1.8%. The return on equity was 2% and the return on assets of 0.88%. A measure of the problems and a reflection of the potential if the mangers could make a more economically efficient operation out of this merger.

The Last trading statement covered the nine weeks to January 3rd 2015. It was something of a restrained explanation, talking of market share gains and stable margins – not a magnificent revelation in view of how low they had been. It was enough to pull the shares down on profit taking. Nevertheless, it was technically speaking, an appropriate market response because the shares were in the last weeks of last year above the uptrend of the share price; a trend that had started last July on the basis of my inspection of the chart. The share price after the 8% fall from the January peak of 470p looks as though it has bounced back in the uptrend.

The market consensus estimates are of a strong rise in earnings per share from the low reported 8.6p last year. That consensus looks for earnings to an estimated 31.4p in the year to 31 March 2017, putting the shares on a prospective estimated price to earnings ratio of 13.5 times for the year after next. Accompanying that, the consensus envisages dividends growing each year from 6p last year to 10.5p for the year to 31 March 2012 putting the shares on a prospective estimated dividend yield of 3% with an earnings yield of a high 9% reflecting a near three times earnings cover.

The final year and fourth quarter results to March 31st 2015 will not be known until next June. My own reading of the share price chart is of a share trending upwards. The company has plenty of scope for boosting margins and returns at a time when low consumer price inflation in putting some more spending power into the hands of consumers. I guess that news from company will emerge to justify current consensus expectations. I judge that this fall back in the share price is an appropriate entry point for new investors who like the prospect of progress through management and improving operational efficiencies.

[munchbowl] 01/2/2015 06:29

Interesting read about John Lewis in the Guardian has it lost the digital-age-plot?