Uncomfortable Reading for DFS

Thursday, 4th October: The FTSE 100 today closed at a 2-week low after emerging market fears gripped investors. It was another strong session on Wall Street but Asian shares concentrated on the strong dollar overnight with European bourses following. Shares slipped 1.2% on the FTSE to just above 7,400. The index wasn’t helped by a recovery in the pound, currently up 0.6% versus the dollar and 0.3% versus the euro, possibly bouncing off recent lows. Ocado group dropped to the foot of the index after slipping 7.8%, with heavy falls for Smurfit and DS Smith.

DFS results reported a 49% drop in pre-tax profit from higher costs and a poor final quarter and shares closed 3% down. Ted Baker became the next high-street name to issue a profit warning, stating the collapse of House of Fraser and warmer weather to start autumn have affected trading. Although shares have fallen more than 10% today they aren’t as vulnerable as other names after a resurgence in the brand of late but it remains a dangerous time for anybody in that space given the wary outlook for our high-streets.

Data released today showed that new car registrations in the UK plummeted 21% during last month, as new testing requirements continue to hit supply. On the whole the likes of Pendragon, Vertu and Inchcape all enjoyed unflattering trade today, but given the general market struggles there’s nothing much in those numbers.

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