Christmas cheer for Home Retail Group and Dixons

I mentioned on the HMV post the other day the potential for other retailers, Home Retail Group and Dixons and that both would be reporting this week.

Dixons share price had been falling prior to its results, it had been going well for some time and there was a case to be made for saying that the good news was in the price, but a pre-results rumour of a possible profit warning also didn't help. Home Retail Group on the other hand didn't seem to have any questions raised against it. Today's results and market reaction suggest that the market likes it more than Dixons, but both have actually done well and defied the consumer gloom and bad news story on the High Street.

First, Home Retail Group.

As a result of good operational management and cash generation over the peak trading period, we now expect Group benchmark profit before tax for this financial year to be about £10m ahead of the current market consensus of £73m and the year end cash balance to be in excess of £300m.

http://www.digitallook.com/news/rns/20628399-198512/HOME-Interim_Management_Statement_html


The market liked the above expectations news with the share price up around 15% as of writing. Truth is there is probably a lot of good news in the price after today's move so a pullback ahead wouldn't be a surprise.

Dixons didn't deliver the profit warning, instead it was fairly solid, the only downside being results from Southern Europe and France which is hardly a surprise.

...reported a surge in Christmas numbers: sales climbed 7% in the 12 weeks to 5 January. Full-year profits should come in at between £75m-£85m.

There was strong performance in Northern Europe with like for like sales up 11%. Propping up much of the sales were computer tablet sales, whose sales were "phenomenal". White goods "were also strong, particularly in the UK", said Dixons.

http://money.aol.co.uk/2013/01/17/updates-from-dixons-home-retail-group-and-abf/

Despite the good result Dixons didn't share in the market euphoria for Home Retail Group, initially it was up 2%, then down 4%, currently up around 1.5% on the day so far.

Both look to be fairly solid recovery bets in the retail sector, but have had a good run recently and are not exactly cheap, certainly ones to keep on a watchlist, chances are there will be buying on any weakness in price going forward.