A WEEK is a long time in politics, was the now dog-eared maxim of former Labour prime minister Harold Wilson.
And a year is a very long time in the stock market. DSG International (Currys, PC World) was in the wars last year, its shares collapsing
by 90 per cent at one stage.
The reason was that DSG (Dixons as was) was seen to be a company in flux and one that, with its big-ticket electrical products, was especially vulnerable to the taps being turned off consumers' discretionary spending in the gathering economic downturn.
Those fears were borne out when the company plunged £30 million into the red at the halfway stage and passed its dividend.
The stock continued under the cosh as there were concerns the group might breach its banking covenants.
In addition, there was the obvious threat from the tie-up of American electronics giant Best Buy with the UK's Carphone Warehouse in mainland Europe.
But things have steadily improved since DSG launched a £300m-plus rights issue earlier this year to shore up the balance sheet and put to bed those worried about bank lending agreements.
Yesterday's better-than-expected sales update from DSG has helped sustain the recovery in the share price.
It's not that the UK performance was any better than the depressing one expected by the market.
A 14 and 15 per cent slide in like-for-like sales in electricals and computing respectively shows the tough trading the group still faces.
But it was the much-stronger-than-expected performance in DSG's Nordic operations, and a more-resilient-than-expected performance in the problematic Italian operations that caught the market's eye.
From a base of considerable scepticism a year ago, the market is beginning to think chief executive John Browett's turnaround may just have something going for it after all.
That is not to say investors are underestimating the challenges ahead.
After initially rising 7 per cent on the trading update, the stock later closed up 2.7 per cent at 27.73p. However, that is a country mile away from the 52-week low of 6.46p the shares hit at one stage.
And now? DSG's stock is currently trading at more than 30 times forecast earnings.
That is well above its bigger European rival Metrol, on 15 times, and smaller rival Kesa, on 18 times.
That suggests investors are already pricing in a strong recovery at the group.
Given the general market environment, it is unlikely we will see DSG running at full voltage for some time.
But as Browett's store revamp programme gains traction in terms of increased gross profit margins, up 0.7 per cent year-on-year, we may at least guess the company will be better-placed to plug into any eventual more general high street recovery.
However, the share price is up with events currently.
Cash no longer king
INVESTMENT broker Hargreaves Lansdown's shares were flirting with 52-week highs yesterday as it took the wraps off a 20 per cent jump in annual profits to £73m.
The 29 per cent hike in the dividend didn't hurt, either. Since last spring investors have progressively been buying into the idea that economic recovery is on its way and that this will feed through into greater appetite for stock market risk again.
Interest rates at historic lows are likely to add to this trend as investors look to gain greater returns than they can on cash deposits.
That is providing support for Hargreaves, which has been one of the steadier performers through the extended period of market turbulence given its exposure to mass market wealth management.
The group's impressive latest performance compares favourably with lower profits from more out-and-out wealth management firms like St James's Place and Rathbones recently.
Assets under management at Hargreaves rose 7 per cent to £11.9bn in the period, while revenues were up 10 per cent at £132.8m.
The company itself cannot be immune from declining interest income itself due to those falling interest rates. But the group allied itself with the wider market in saying that the trend could have investors nibbling at the stock market again.
My guess is the Hargreaves's shares could mark time for a while now, though, as they are likely to have to stay relatively pegged to the performance of the wider economy in difficult times, certainly over the next 12 months or so. But there remains a case for buying on any periodic weakness for the longer-term.
Bryan Johnston of Brewin Dolphin
ONE TO WATCH
Monitise
15.75p -0.5p
Scotsman says HOLDMONITISE is a global leader in mobile banking. Its systems allow consumers to manage bank accounts, cards and payments directly from mobile phones for which the company charges an annual recurring licence fee.
The Aim-listed company's recent figures were better than expected, at least as covered by Edison Investment Research. The investment house believes Monitise is on track to exceed its target of one million subscribers this year while a global alliance with Visa offers further potential.
It is fair to say Monitise is still in the development stage but the days of "bank managers in the cupboard", for those old enough to remember such adverts, are over. He or she will now be replaced by technology. The number of people actually visiting banks is falling away, to be replaced by automatic teller machines (ATMs) and online banking.
Monitise's technology provides the platform for individual banking services. In a recent report by Edison, the company confirmed that Monitise's revenue grew by 80 per cent and, although the company is still not profitable, it is moving in the right direction.
The company is not without competition but the speed with which it has built-up its base is impressive. The group is unlikely to break into operational profitability for the foreseeable future continuing to invest in its business model, but the flexibility and innovative skills are impressive; one service in partnership with Natwest allows the bank's Polish customers to send money back home.
The shares have increased by a factor of five this year already and the risks posed by competition must be acknowledged. By the same token, the potential seems equally impressive.
• The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.
Charteris says pipeline of future sales is encouraging
SMALL BUT BEAUTIFULCHARTERIS expects to break even during the second half of the year, the Aim-listed business and IT consultancy reaffirmed yesterday.
The company's cash position at its year end on 31 July was about £1.5 million, compared with £1.7m on 31 January and £2.9m at the end of July 2008.
Charteris expects to announce full-year results in early November.
In April, the company said that "in view of prevailing economic conditions the directors expected the company to break even before exceptional items in the second half".
Exceptional items in Charteris's second half include share option charges, goodwill and redundancy costs.
For the six months to the end of January, the company posted revenue of £11.6m, up from £11.2m in the first half of the previous year.
Profit before tax and exceptional items fell from £664,000 in the first half of 2008 to £353,000.
Chairman Cliff Preddy said the recession had led to "considerably lower performance" but that the "pipeline of future sales remains encouraging".
Charteris – which has offices in London, Edinburgh and Northleach, in the Cotswolds – has a market cap of about £5m.
Drop in oil price leaves energy companies over a barrel
SCOTS STOCKSSCOTLAND'S oil and gas companies continued to edge lower yesterday as oil traded at around $68 a barrel.
Dana Petroleum, the North Sea focused FTSE-250 company, continued the slide which started last week when it warned that it would miss its production targets.
Shares in the Aberdeen-based group closed down a further 26p to 1,326p yesterday, while Cairn Energy slipped 9p to 2,400p.
Wood Group, Scotland's largest oil services company, closed down 9p at 282.2p.
John Menzies, the news distribution and airport luggage handling group, continued its remarkable recovery of recent weeks on better than expected trading and new contracts.
Shares, which were trading at less than 50p in March, rose 5.8 per cent to 352.5p yesterday.
On the Aim, Dawson International dropped the day after reporting a fall in first-half trading and warned its pension scheme could put off new investors.
Shares in the Kinross headquartered textiles group closed 5.6 per cent lower at 2.125p.
Powerleague, the five-a-side football pitch operator which is based in Paisley, jumped to its highest level in more than a year, although trading remained light.
Shares in the group rose 13.4 per cent to 46.5p.
