Focus switches back on to electricals

Published on Saturday 21 November 2009 14:16

SIGNS of life are expected in the consumer electronics market this week when Carphone Warehouse and DSG International post their interim results.

Carphone Warehouse's half-year figures on Friday come after the group recently pleased the market by topping forecasts for broadband customer additions and confirming its planned demerger was "progressing at pace".

The group, which is spinning off its TalkTalk broadband business into a separate company, said it gained a net 77,000 subscribers in the three months to 30 September, compared with City predictions for an increase of about 41,000.

Investec Securities is looking for group profits of 159.2 million, up from 133m a year earlier.

DSG International, which owns Currys and PC World, is posting its interim results on Thursday. The group reported sliding UK same-store sales in the first quarter as it came up against strong comparisons with the previous year when TV prices were slashed.

But there have been indications recently that the domestic electricals market has picked up. Figures from John Lewis in recent weeks have shown a strong upturn in its electricals and home technology department.

DSG said that PC World's like-for-like sales tumbled 15 per cent in the 16 weeks to 22 August, with "significantly lower" sales to business customers, but a stronger international performance across the group had helped limit like-for-like sales declines to 6 per cent.

In the year to May, the firm reported losses of 140.4m driven by one-off items – mainly turnaround costs and the lower value of European businesses.

Final results on Wednesday from catering giant Compass will be eyed for news on the slowdown in revenues reported at the nine-month stage.

Shares plunged in July after Compass said trading had been hit by steep cuts in corporate hospitality spending combined with job losses and shorter working hours within its target customer base.

Compass – which has contracts with the Bank of England, Asda and the Royal Mail – posted a 1.8 per cent rise in revenues in the nine months to 30 June on a constant currency basis, a slowdown from a 3.6 per cent rise for the six months to 31 March.

The firm also warned sales were set to slow further in its final quarter and predicted full-year revenues growth of 1 per cent, with its UK and Ireland business seeing revenues down 5.5 per cent.

But this is not expected to have halted another double-digit increase in full-year pre-tax profits, with analysts pencilling in a 30 per cent hike to 768m.