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Summary
- The revenue of Dixons Carphone decreased by 3 per cent in FY19-20 to £10,170 million, in comparison with £10,433 in FY18-19
- The retail revenue for the Burberry Group was down by 45 per cent to £257
- McCarthy Group's revenue for the first half of the year was down by 64 per cent to £101.1 million from £280.5 Million in H1 2019.
The unprecedented crisis of the Covid-19 pandemic and the extended lockdown it triggered has impacted the whole of the retail sector of the British economy by enforcing them to remain shut. As it is, the retailers are facing low demand; on top of that, fixed costs have inserted additional financial pressure on them. A considerable decline can be seen in the sales of the stores selling non-essential goods, such as garments, electronics, mobile phone, hardware, etc. The British Government has taken various initiatives to provide support to people of these sectors, but the furlough scheme is expected to end in October 2020. It will be a tough situation for the businesses, especially the Consumer Discretionary sector, to continue with their operations and retain their workforce.
Amid all these adversaries let us analyse the financial updates of the three well known of the retail sector, Dixons Carphone PLC, Burberry Group Plc and McCarthy Group Plc
Dixons Carphone PLC
Incorporated in 2014 because of the merger between Dixons Retail and Carphone Warehouse Group, Dixons Carphone is a retailer of electrical and telecommunications and service providing company. It has spread its operations in over nine countries, with 14 brands in function. Employing 42,000 staffs, the company offers its customers with options to discover and choose the right technology for themselves.
Financial Highlights
On 15 July 2020, Dixon released its final result for the financial year ending 2 May 2020. The Group's revenue decreased by 3 per cent in FY19-20 to £10,170 million, in comparison with £10,433 in FY18-19. The main reason behind this was the decline in the UK and Ireland mobile revenue by 20 per cent due to constrained prepaid offer, enforced 3-in-1 store closures and low sales transfer to online, resulting in a decline in the sales. The adjusted EBITDA also fell by 37 per cent to £322 million (FY2018-19: £509 million). The adjusted PBT recorded was £166 million was £44 million below the emphasised guideline issued by the company in January 2020, due to the impact of the Covid-19 pandemic. The earnings per share declined to 10.8p in FY19-20 (FY2018-19: 23.3p). The free cash of the company was recorded as £109 million, and the net debt increased to £284 million.
Stock Performance
Dixons Carphone PLC (LON: DC.) stock was trading at GBX 76.05 on 16 July 2020, at 8:57 AM, down by 3.00 per cent from its previous close of GBX 78.40. The 52-week low/high price was GBX 60.00/152.45. It was having a market capitalisation (Mcap) of £911.29 million. The volume traded at the time of reporting was 476,401. The company recorded a negative return on price, which was 44.87 per cent on a YTD (Year to Date) basis. The Beta of the company stood at 1.6, indicating that the volatility of the stock is higher than the benchmark index.
Burberry Group PLC
Burberry Group is a manufacturer of luxury goods. The company works in two segments- retailing/wholesaling and licensing. It is engaged in selling luxury goods across stores, outlets and e-commerce.
Financial Highlights
On 15 July 2020, Burberry Group released its Q1 trading results for the period ending June 2020. The retail revenue was down by 45 per cent to £257 million (29 June 2020: £498 million). While the sales in the Asia Pacific region declined by 10 per cent in the quarter, the scenario in the US region and Europe region was worse, with the sales being down by 70 per cent and 75 per cent respectively. Though the growth in sales returned in June, the other regions were impacted by the lockdown and the restrictions imposed by them.
Stock Performance
Burberry Group PLC (LON:BRBY) stock was trading at GBX 1,425.50 on 16 July 2020, at 9:05 AM, down by 2.89 per cent from its previous close of GBX 1,470.00. The 52-week low/high price was GBX 1,085.00/2,345.00. It was having a market capitalisation (Mcap) of £5,949.20 million. The volume traded at the time of reporting was 203,035. The company recorded a negative return on price, which was 33.21 per cent on a YTD (Year to Date) basis. The Beta of the company stood at 1.5, indicating that the volatility of the stock is higher than the benchmark index.
McCarthy & Stone PLC
McCarthy is a UK based developer, engaged in managing the retirement communities. It is involved in buying lands, building apartments and selling it to the retired communities in order to support older people. The product of the company ranges from Retirement Living and Retirement Living Plus.
Financial Highlights
On 15 July 2020, McCarthy released its half-yearly results ending 30 April 2020. The company's revenue for the first half of the year was down by 64 per cent to £101.1 million (H1 2019: £280.5 Million) as a result of the closure of sales offices and under construction sites from mid of the March. The loss before tax was recorded at £91.3 million, which decreased by 2636 per cent in comparison with the previous half-year profit of £3.6 million, due to the fixed costs. The cash position of the company stood at £146.5 million. The company has net debt of £53.5 million. It was decided by the company not to propose any dividend.
Stock Performance
McCarthy & Stone PLC (LON:MCS) stock was trading at GBX 73.70 on 16 July 2020, at 09:12 AM, down by 0.41 per cent from its previous close of GBX 72.00. The 52-week low/high price was GBX 40.44 / 158.80. It was having a market capitalisation (Mcap) of £ 397.95 million. The volume traded at the time of reporting was 191,919. The company recorded a negative return on price, which was 50.57 per cent on a YTD (Year to Date) basis. The Beta of the company stood at 1.22, indicating that the volatility of the stock is higher than the benchmark index.
