DSG drops on JPMorgan concern

Source: Exec Digital UK

Date :13/08/2008 11:12:35

DSG International plc has seen its share price slide by as much as 12 percent after JPMorgan suggested that the retailers may not be able to raise revenue and advised investors to reduce their stock holdings.

The losses, which equate to £190 million falling from DSG’s value, came as JPMorgan described any optimism that the company may be able to improve its finances with sales of their assets as “misplaced”.

The investment house has now changed its recommendation on DSG from “underweight” to “neutral”.

DSG reported its first annual loss since 1994 in June as it lost 44 percent this year, blaming the credit crunch, higher food prices and fuel bills for keeping spending on electronics and consumer durables depressed.

DSG plc has operations in Europe, particularly in Spain and Italy, which are leasehold and lossmaking, according to JPMorgan’s Simon Irwin.

DSG’s share price fell 6.07 pence, or 9.9 percent, to 55.25 pence this morning, making it the worst performing in the FTSE 350 General Retailers Index.

Kesa Electricals plc, which owns Comet and Home Retail Group plc, also made losses while JPMorgan set a share price estimate of 50 pence for DSG.