M&S Q1 trading update - 2 July 2008
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented:
‘In this environment, any negative news is likely to be seized upon. For M&S, today's effective profit warning has sent the shares into freefall, dropping over 20% and bringing the figure for the last year to down 59%.

The fact that the Food division has seen a drop in like-for-like sales of 4.5% has also resulted in a change of management in that area. Of particular disappointment is that food had previously been regarded as something of a flagship product, whereas consumers are clearly beginning to downgrade their shopping habits. M&S's comments have also pulled others down with it, both in terms of upper end food retailing (Sainsbury down 6%) and clothing (Next down 7.5%).

Perhaps in an effort to ‘kitchen sink’ the news, management have also issued a very cautious statement about nearer term prospects, despite continuing to do what they can to improve operational efficiency and bring forward some strategic ideas. Nonetheless, this news will take some digesting and the current market consensus of a hold on the shares is likely to come under some pressure over the next few days.’

HMV Group FY results - 1 July 2008
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented:
‘The figures are, in themselves, decent enough but the company remains embattled in its field.

The increase in revenue, largely due to a boost in video games sales, is promising enough. Similarly, the company has booked the sale of its Japanese unit and the company's recovery is proceeding well given the circumstances. The revamp at some of their stores has begun, with the offer of more diverse products and a slightly punchier image. Almost inevitably HMV remain cautious about the road ahead, even though maintaining the healthy 6% dividend yield shows some sign of confidence.

Nonetheless, digital downloads are firmly taking hold and, in any event, the presence of online retailers and the supermarkets is exerting severe pressure on their business model. Not surprisingly, the shares have had a rollercoaster ride, but have held up well, rising 10% over the last six months alone, thereby outperforming the wider FTSE250 by some 21%. On balance, the market view recognises a small glimmer of hope, maintaining a general hold rating.’

Carpetright FY results - 1 July 2008
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers commented:
‘Carpetright has today announced full year profits broadly in line with analysts' estimates, but management comments guiding down profit forecasts for the year ahead, whilst not surprising, will not prove welcome.

Furthermore, when a retail veteran such as Lord Harris is warning that conditions ahead may prove to be some of the most difficult that he has seen, then all retail investors need to take note.

The story at Carpetright has been the same for some time - although overall group sales continue to grow, underpinned by store expansion, like-for-like sales in the UK and Ireland have remained under pressure. In addition, whilst like-for-like sales on the Continent have remained positive, the rate of progress has been declining. However, despite this, company profit progression has been underwritten by ongoing improvements in group operating efficiency. The concern is now that sales deterioration will outpace efficiency gains.

On balance, whilst the still progressive dividend and management's significant share stake in the company hold some positive sway, Carpetright, like its retailing rivals, is rapidly falling victim to the credit crunch. Market consensus opinion is currently negative in tone.’

Carillion trading update - 30 June 2008
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers commented:
‘On a day when the housebuilding sector is displaying its vulnerabilities via Taylor Wimpey, a name once synonymous with the volatility of construction (Carillion) is highlighting its relative stability.

Carillion has again proved a reassuring trading statement and management continues to demonstrate the virtues of its diversification into the support services arena. Steady cashflows and a growing order book fortify the group's current position. Furthermore, the company's acquisition record is again being underlined, with McAlpine now looking likely to join Mowlem in the archives of success.

On balance, risks are still inherent - debt remains, but is being reduced and the Office of Fair Trading's ongoing investigation into competitive practices remains a concern, although Carillion already looks to have been granted some leniency via its cooperation to date. In essence, with the company now providing exposure to a mixture of business theatres such as government health, transport and defence, along with still growing areas such as the Middle East, market consensus opinion is currently resolutely positive in tone.’

Standard Chartered trading update - 26 June 2008
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented:
‘Standard Chartered has for some time now been the darling of the UK banking sector and this reassuring update will do the cause no harm whatsoever.

The bank has had the dual boost of a major exposure to the booming Asian regions, whilst having a relatively light presence in the more difficult European and US economies. This in turn has meant that the US sub-prime fallout has had limited (and indirect) impact, whilst the performance from the wholesale banking division in Hong Kong and India in particular has further bolstered performance. Indeed, the bank remains well capitalised and will be looking towards strategic acquisitions as they arise, resulting from the dislocations of various global markets.

Over the last year, at a time when the UK banks' share prices have been severely downtrodden, Standard has dropped just 5%, even outperforming the wider FTSE100 by 11%. Unlike the majority of its UK listed peers, the company remains positively viewed by the market.’

DSG Intl FY results - 26 June 2008
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers commented:
‘All of the sting accompanying these results was removed in the group's mid May profits warning, with investors today breathing a sigh of relief, given no further bad news.

On the positive, cashflow is being conserved via the substantial cut to the dividend, underperforming businesses are being cut and customer service skills are to be sharpened. Furthermore, the group's online operations continue to grow, with company achieving the milestone of £1 billion of sales.

However, the negatives still remain considerable. Achieving the balance of cutting costs whilst honing customer service skills, both in the face of potentially aggressive new competition from the USA's Best Buy stores, will be difficult. Furthermore, unlike rival Kesa, DSG is potentially attempting to sell underperforming/non core businesses in a much tougher environment, adding pressure to achieving acceptable prices. On balance, most of the hard work is yet to be done, and all against the backdrop of a deteriorating consumer environment - market consensus opinion remains sell.’

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