Comment: Dixons bounce | Lloyds sell-off

Newly created Dixons Carphone – formed from the merger of Currys/PC World and Carphone Warehouse – has seen its same-floorspace sales jump 11 per cent in its most recent trading quarter, with profits up nearly a third in the half-year period.

The new £5 billion retail electronics giant, which carries greater purchasing power and marketing heft since the tie-up, benefited from the collapse of the Phones4U business as it was able to sell more post-pay contracts as it also launched new products.

Since the end of the trading period, Dixons Carphone got a further fillip from demand on Black Friday – the day after US Thanksgiving Thursday – which was seemingly imported lock, stock and barrel from America overnight to help prop up a challenging UK high street.

The day proved the biggest in Currys/PC World history, with web traffic surging five-fold and the company saying Black Friday is beginning to rival Boxing Day as the biggest trading event of the year.

Dixons Carphone’s impressively robust performance in the UK and Ireland was offset by more challenging trading in austerity-racked southern Europe, with Spain a weak territory, in particular.

Even so, it is clear, even at this early stage, that this new UK electronics heavyweight is delivering what it said on the tin at the time of the merger, becoming a stronger player better able to take on the likes of international majors such as AO World.

There are now 190 Carphone Warehouse outlets with Currys and PC World stores, including 158 converted Phones4U concessions, and the British company has brought forward its target for a minimum of £80m of merger cost savings by a year to 2016-17.

The deal looked a good one when first announced, and nothing that has happened in the succeeding months has changed the City’s initial opinion, and yesterday’s results certainly didn’t, with the shares closing up 3 per cent.

Double boost for Lloyds group hoves into view

UKFI, the quango that manages the taxpayers’ stakes in bailed out banks, has not wasted any time following Lloyds Banking Group passing on Tuesday – if narrowly – the Bank of England’s banking balance sheet stress tests.

Within 24 hours UKFI has announced that it plans to sell a further tranche of the state’s remaining near-25 per cent stake in Lloyds, which has already come down from near-40 per cent at the time of the 2008 bailout.

In a complicated formula, the quango says it will sell up to 15 per cent of the aggregate total trading volume in the bank’s shares in the six months from the New Year to next June.

Market professionals say this would suggest a sale of about 5 per cent of Lloyds’ shares. It is, therefore, an incremental selldown of the remaining state stake rather than psychological closure for the taxpayer, but it is positive news all the same.

Lloyds would appear to be on a minor City roll at the minute. The bank’s passing of the BoE’s regulatory stress tests under a highly demanding hypothetical economic scenario has led many to believe that Lloyds will begin restoring frozen dividend payments at its next full-year results due next February.

Royal Bank of Scotland, also taxpayer-backed, may look on enviously as the group is still unfortunately some way off seeing either a selldown of the government’s 81 per cent holding or any restoration of the lesser-spotted woodpecker that is the RBS divi.

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