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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Dixons Carphone    DC.   GB00B4Y7R145

DIXONS CARPHONE

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New Halfords CEO issues profit warning, shares deflated

05/22/2018 | 05:09am EST
A Halfords sign is seen outside a store in London

LONDON (Reuters) - The new boss of Halfords warned profit was unlikely to grow this year, held back by a lack of price rises in cycling, currency moves and increased investment in the British bicycles to car parts retailer.

Shares in Halfords fell as much as 15 percent on Tuesday, losing all the gains they had made so far this year.

The results for the year to the end of March were the first presented by Graham Stapleton, a former Dixons Carphone executive who succeeded Jill McDonald as Halfords CEO in January. McDonald went to Marks & Spencer to lead its clothing business.

The group, which trades from 457 Halfords stores, 20 Cycle Republic shops and 316 Autocentres, said it expected the motoring market would remain robust in 2018-19 and continued to see good growth prospects for cycling.

However, it did not expect bicycle prices to rise as they had done in the previous year.

"Given this, the phasing of our remaining foreign exchange mitigation actions and decisions to accelerate investment in services and customer capabilities, we currently anticipate FY19 underlying profit before tax to be broadly in line with FY18," it said.

Prior to Tuesday's update analysts' average forecast was an increase to 76.5 million pounds.

For the year to March 30, Halfords made an underlying pretax profit of 71.6 million pounds - in line with analysts' forecasts but down from 75.4 million pounds in 2016-17 and a second straight fall. Turnover rose 3.7 percent to 1.14 billion pounds.

The profit fall reflected a 25 million pounds hit due to the weaker pound against the U.S. dollar which raised the import cost of goods.

British retailers are also being hampered by an ongoing squeeze on consumers' spending power.

Stapleton said Halfords would focus even more on improving its customer services and digital offer but would present his long-term vision for the business in September.

Shares in Halfords were down 39 pence at 349 pence at 0845 GMT, valuing the business at around 690 million pounds.

"Standard form for new Halfords CEOs is to cut the forecast and talk about investment in customer service, data and awareness. Stapleton got the memo, and consensus numbers are coming down by circa 8 percent," said analysts at Peel Hunt who have a "sell" stance on the stock.

Halfords also named Keith Williams as its new chairman from July 24. Williams, a former CEO and chairman of British Airways, will succeed Dennis Millard who is retiring after nine years in the job.

Finance chief Jonny Mason is joining Dixons Carphone from a date to be confirmed.

(Reporting by James Davey; Editing by Paul Sandle/Keith Weir)


© Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
DIXONS CARPHONE 1.02% 111 Delayed Quote.-5.01%
HALFORDS GROUP PLC -1.12% 272.42 Delayed Quote.3.18%
INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A. 0.04% 139.55 Delayed Quote.-12.39%
JUST GROUP PLC -1.16% 74.5743 Delayed Quote.7.94%
MARKS & SPENCER GROUP PLC 0.39% 142.2 Delayed Quote.3.93%
MCDONALD'S CORPORATION -0.02% 213.34 Delayed Quote.-0.58%
THE LEAD CO., INC. 0.49% 824 End-of-day quote.-1.90%
VISION INC. 4.98% 969 End-of-day quote.-6.47%
WILL GROUP, INC. 4.97% 1057 End-of-day quote.5.07%
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Financials
Sales 2021 9 903 M 13 514 M 13 514 M
Net income 2021 58,5 M 79,8 M 79,8 M
Net Debt 2021 473 M 645 M 645 M
P/E ratio 2021 -46,3x
Yield 2021 1,58%
Capitalization 1 272 M 1 737 M 1 736 M
EV / Sales 2021 0,18x
EV / Sales 2022 0,16x
Nbr of Employees 32 500
Free-Float 93,9%
Chart DIXONS CARPHONE
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Dixons Carphone Technical Analysis Chart | MarketScreener
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Technical analysis trends DIXONS CARPHONE
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 9
Average target price 141,13 GBX
Last Close Price 110,00 GBX
Spread / Highest target 59,1%
Spread / Average Target 28,3%
Spread / Lowest Target -45,5%
EPS Revisions
Managers and Directors
NameTitle
Alexander Lewis Baldock Group Chief Executive Officer & Director
Ian Paul Livingston Non-Executive Chairman
Mark Allsop Chief Operating & Digital Officer
Jonathan Peter Mason Group Chief Financial Officer & Director
Gerry Murphy Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
DIXONS CARPHONE-5.01%1 737
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JB HI-FI LIMITED7.03%4 601
GOME RETAIL HOLDINGS LIMITED32.26%3 181
MOBILE WORLD INVESTMENT CORPORATION11.02%2 653
CECONOMY-6.35%2 314