Mindful Money’s Monday share tips: Dixons, Greene King

2nd September 2013

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This week see the arrival of updates from FTSE 250 listed Greene King and Dixons Retail. We take a look at what the brokers are recommending writes Philip Scott.

Pub group Greene King reports its first quarter trading update on Tuesday. Over the past 12 months it has enjoyed a 49 per cent share price rise, 20 per cent of which has been seen in the past six months. In the wake of record full year results, the group is again expected to report solid progress says Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.

He adds: “Its retail division, including managed pubs and restaurants, is expected to announce additional growth in like-for-like sales, whilst its tenanted pub partners division should have benefited from more favourable weather compared to last year.

“Tenanted sales of pubs are expected to have remained on-going, whilst volumes for its brewing division may have remained flat, given consumers preference for lager and cider in warm weather conditions.”

On balance, and despite its strong share price gain over the last year, analyst opinion currently points towards a ‘buy’ according to Bowman.

Reporting on Thursday is FTSE AIM 50 mobile payments group, Monitise. Like Greene King, with a 49 per cent gain, it too has witnessed a strong 12-month share price rally. Investors will want to see if the business is continuing to capitalise on the popularity of mobile payment. How Monitise is developing its proposition with its partners and how that is leading to revenue generation will also be of interest.

Again despite the gains, broker sentiment has the shares rated a ‘buy’ according to share data website Digital Look, as does Sheridan Admans, investment research manager at stockbroker, The Share Centre. He says: “Monitise continues to look like an attractive high risk, early stage investment opportunity.

“The company continues to attract high calibre partners and customers, helping to firmly integrate its proposition as the preferred interface between financial institutions and their customers globally. Any update of its progress will be interesting for investors.”

Following a 137 per cent share price run in the past year, Dixons Retail reports its first quarter trading update on Thursday. Although hindered by comparatives with last year’s Olympic Games and European football championships, as consumers bought bigger and so called ‘Smart TVs’, further like-for-like sales progress is likely to be reported notes Bowman. But again a polarisation in sales performance is expected, with Northern Europe including its UK & Irish division reporting further sales gains, whilst same store losses continued to be suffered for its Southern European operations.

Bowman says: “An update on restructuring measures being implemented at its troubled online PIXmania business is likely to be provided, whilst a further reiteration of overall group cost saving targets may be outlined. Prior to the update and with the company enjoying exposure to a recovering UK housing market via its white goods offering, analyst opinion continues to denote a ‘buy’.

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