Currys Share Discussion Threads

[mikepompeyfan] 07/8/2014 18:15

LONDON (ShareCast) - Investec has issued a 'buy' recommendation on Dixons Carphone as the newly merged company should benefit from strong buying synergies and is well-positioned to capitalise on structural changes in mobile.

After Carphone Warehouse and Dixons Retail completed their merger, Investec analyst Alistair Davies took a fresh look at the potential benefits of the deal, spying superior earnings growth potential and an undemanding valuation.

He says the merger creates a company "well-equipped to deal with increasing levels of connectivity and convergence in technologies with mobile devices an important part of daily life".

"This could become a lucrative earnings story longer term, but is small today, in our view. Thus, near term focus is on maximising the profitability of existing businesses."

Nearer term, he sees potential for upside to £80m of synergies from improved buying terms with key suppliers such as Apple or rolling out Carphone's mobile specialties across a greater portion of the Dixons estate.

Further margin expansion at Dixons to the top end of management's 3-4% range is possible from improving sales and gross profit densities and a re-engineering of the cost base.

"Carphone Warehouse is well-positioned to capitalise on potentially positive structural changes in the mobile market, such as greater postpay penetration, increased data usage and higher profitability for 4G connections."

He admits in the short-term revenue and profit growth is expected to be more pedestrian as industry pressures on average revenue per unit persist.

As interest costs fall and restructuring charges unwind, 11% growth in earnings before interest and tax translates into 15% compound annual growth rate in earnings per share.

"This is superior to the sector and we believe the shares can support a premium rating."

[undervaluedassets] 07/8/2014 18:12

Did a little due dilligence today.

Where I live in Oxford they are closing one of their Currys stores and having a megastore instead with a carphone warehouse inside.

Part of "store in store" initiative.

the folk at Carphone also seemed well up for it.

[laffin] 07/8/2014 13:54

Thanks Skinny;

"Dixons Carphone intends to adopt a dividend policy in line with Carphone's current dividend policy of 3.0x dividend cover based on Headline Earnings"
I suppose actual amounts will be worked out with first results;

17 Dec 2014 Interim Results 2014-15

[laffin] 07/8/2014 13:42

Anyone have any idea whats happening with the dividend, i.e. payment dates, amounts? Will there be one?

[undervaluedassets] 07/8/2014 13:37

Got mine.

Idealing are excellent

[mikepompeyfan] 07/8/2014 12:36

They're in my Halifax account but not Hargreaves Lansdown last time I looked.

[gerdmuller] 07/8/2014 12:34

Thanks but not showing in my Barc yet.

[hmrc inspector] 07/8/2014 12:30

I do in T D Direct.

[gerdmuller] 07/8/2014 12:28

Do you people have the new shares showing in your account yet?

[wanttowin] 07/8/2014 10:15

Morning all,this could be the start of a lovely relationship !

[undervaluedassets] 07/8/2014 09:25

Well that was quick:-

From the new website:-

"[London, 7 August 2014] Dixons Carphone is celebrating its official first day as a newly merged company, with the opening of seven store-in-stores1 across the store estate and a further 23 planned by Christmas".

[mikepompeyfan] 07/8/2014 09:07

Q1 trading statement is 9th September so not too far away.
Hopefully will be very positive on prospects, rationalisation and current trading.

[murden] 07/8/2014 09:07

Still no ticker on ADVFN - or is it me ??

[undervaluedassets] 07/8/2014 09:05

The DXNS shorts will have been converted into DC. shorts. (the market was 13% short DXNS in July)

These still need to be bought back (and clearly are being as we speak)

Also the market was 4.05% short in CPW in July - but that number was trending lower as the shorts were being bought back there too.

I would estimate that the market overall is somewhere between 6-8% short in the new entity that is Dixons Carphone .

Expect store closure and "store in store" news in coming months. All of which should be beneficial.

(unless of course you are short)

[mikepompeyfan] 07/8/2014 09:01

Phew. Have managed to put the charts in the header.

Looks nice, especially as it's on the way up ! :-)

[maximillian1] 07/8/2014 09:00

looks like jet thrusters ..just fired....:o)

[maximillian1] 07/8/2014 08:56

Must be well undervalued...

[maximillian1] 07/8/2014 08:56

We may see a lot of press coverage over the weekend..This seems to be moving against the general downtrend...

[undervaluedassets] 07/8/2014 08:52

it is a simple sum.

you multiply the DC. price by 0.155

[maximillian1] 07/8/2014 08:49

About 360 for a price of 56 60p is about 388 I think..

[undervaluedassets] 07/8/2014 08:47

if you were wondering. . .

Current price represents 54.25p if you were a Dixons shareholder.