Dixons shares light up on sales bounce and Nordics IPO plan
Market report: Dixons shares rise as it mulls float, IAG and Saga fall as they tap shareholders for funds
The sleepy surrounds of the Faroe Islands rarely attract the attention of the Square Mile, bar City boy football fans betting on the odd Euros qualifier.
But today the rocky volcanic islands were among the action as Dixons Carphone told investors it is mulling listing a minority stake in its Nordics business. The electricals retailer has a couple of stores in the Faroes, within its 400-strong store estate in the region.
Dixons said a listing of the profitable division “would shine a light on the value of the Nordics business whilst retaining it as part of the group”. The IPO, advised on by Morgan Stanley, will likely be in Oslo, Norway early next year.
Dixons also posted a 12% surge in UK revenues in the 17 weeks to August 29 but took a hit to margins. The shares rose 10% before settling up 5% at 86p.
Investec’s Ben Hunt said: “There are clear signs that consumers are switching savings made in leisure spending towards home improvement and working from home, which is benefiting Dixons. Whilst early in the year, we believe there is upside risk to forecasts.”
Investors were being tapped for funds across the market today. British Airways owner IAG struck a deal to raise €2.7 billion from shareholders to shore up its balance sheet at a 35.9% discount with airline travel still relatively quiet.
The capital raise has been fully underwritten by its supporting banks and its biggest shareholder, Qatar Airways, has agreed to take part with its 25% stake. IAG shares fell 4% to 193p.
A fundraiser from Saga, the cruises-to-insurance supplier for over-50s, also underwhelmed, as shares dropped 5% to 15.2p.
As anticipated, the £150 million raise was underpinned by former chief executive Sir Roger de Haan who ran the business for 20 years before selling it to private equity firm Charterhouse in 2004. De Haan said of Saga: “I am very optimistic about its future”.
Investment firm City of London Group, which lends to SMEs via its banking arm, tapped the market. A subsidiary of self-made billionaire Ruth Parasol’s investment vehicle agreed to subscribe to the bulk of the shares at 80p per share for £25 million.
A further £5 million will be sought at the same price. The shares rose 11p to 75p today.
On the FTSE 100 it was a middling day — with the index off 40.39 at 5,972.54 — as traders awaited the European Central Bank’s latest policy update. Packaging firm DS Smith was among the biggest fallers, off 3% at 280p.
Restaurants tycoon Hugh Osmond today pushed the button on an IPO of his Various Eateries vehicle. The company is likely to be valued around £60 million to £65 million via the AIM float, expected to take place at the end of this month or start of October. Osmond — who built up Pizza Express — is looking to raise £25 million to roll out its core brand Coppa Club and Tavolino.
Despite the strife in the restaurant trade, he said the firm’s experienced management team and the availability of “premium sites at attractive rents” fuelled his confidence to float now.