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Serco and Dixons Carphone jump on results relief

Serco and Dixons Carphone jump on results relief

Two of the FTSE 250's worst performing shares of the year have received a boost from results that were better than feared.

Shares in Serco (SRP) jumped 8.6% to 103.5p after the outsourcing group said full-year profits were likely to come in around the top end of expectations. 

The shares have lost more than a quarter of their value this year as the company has struggled with political uncertainty and pressure on margins.

But Liberum analyst Joe Brent didn't see enough in the news to shift from his 'sell' rating on the shares.

'Management is liked and respected, but the market is challenging and they are not magicians,' he said.

'The political landscape remains hard, with challenges in the UK (political uncertainty), US (Obamacare and budgetary uncertainty) and Middle East (poor relations between Saudi Arabia and Qatar).

Dixons Carphone (DC) was meanwhile up 3.5% at 173.2p on relief that the retailer's first-half profits were in line with forecasts, with profits of £61 million.

The shares have lost half their value this year, hurt by a profit warning in the summer thanks to a 'challenging' mobile phone market.

'Low expectations that have duly been met - just - are flattering the share price,' said Ken Odeluga, market analyst at City Index.

'The group still has some way to go to convince the market that profits will grow again before too long.'

The FTSE 100 was flat at 7,450 points, with most of the morning's action outside the blue-chip index.

Among 'small-cap' stocks, shares in Zotefoams (ZTF) surged 12.5% to 451.3p after the foam maker signed a deal to suuply sportswear maker Nike (NKE.N).

Shares in Cambian (CMBNC) slumped 12.5% to 168p after the children's services provider said it had been made aware of footage alleging poor care and education at three of its facilities.

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