Pressure mounts on M&S and Dixons-Carphone

Pressure mounts on M&S and Dixons-Carphone
Marks & Spencer has had its credit rating reduced; while Dixon's Carphone admitted online sales wouldn't see it meet annual profit targets

Retail giant Marks & Spencer has had its credit rating reduced to ‘junk’ status — suggesting it may have difficulty repaying its lenders — and electrical goods group Dixons-Carphone has warned of an adverse impact on its profitability and cash position as the pandemic continues to batter high street traders.

Ratings firm Standard & Poor’s said it expects M&S’ sales to be significantly dented by the Covid-19 outbreak, and warned it could lower its rating even further if the UK government’s social lockdown continues into the second half of the year.

Dixons-Carphone — which trades across Ireland and the UK through the Currys-PC World and Carphone Warehouse brands — said good online sales won’t be enough to see it achieve its £210m (€230m) annual profit target, or to lower debt. Its closed Irish and UK stores will see it lose out on around £400m of additional sales.

Meanwhile, UK group Breedon — which owns the Lagan and Whitemountain construction services companies in Ireland — has temporarily closed most of its UK sites.

It remains open in the Republic, including at its cement plant at Kinnegad, and will continue operating pending guidance from the Government.

Breedon said it is well-positioned for the long term, but cannot provide accurate earnings guidance for this year due to the uncertainty over the impact of Covid-19.

Housebuilder Glenveagh Properties also suspended current year earnings guidance, but said it remains confident over its medium and long-term outlook.

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