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Hack-hit Dixons falls, FTSE rises before Fed rate call

(Update) FTSE 100 see-saws before expected US interest rate rise but Dixons Carphone hit by cyber-attack and logistics group Connect halves on profits warning.

Hack-hit Dixons falls, FTSE rises before Fed rate call

Dixons Carphone (DC) has fallen 3.4% on news that 6 million customers’ card details had been compromised in a massive data breach.

News of the cyber-attack pushed shares in the electricals retailer down six points to 191p. It warned 5.9 million payment cards in the processing systems for Currys PC World and Dixons Travel had been accessed. Of those 5.8 million were protected by chip and pin but the remaining 100,000 non-EU issued cards were unprotected, putting customers at risk.

On top of this, the hackers accessed the personal records of 1.2 million customers, including names, addresses, and email addresses.

Although the breach happened in 2017 it is only now coming to light after a review of the company’s systems, a fact that will also cause some concern, said Russ Mould, investment director at broker AJ Bell.

‘Having successfully reset expectations for the group with a profit warning in May, albeit at a cost to the share price, new chief executive Alex Baldock is under pressure to deliver,’ he said.

‘If this news leads to a further deterioration in the trading outlook, the market is likely to be unforgiving.’

In a statement Baldock said the protection of customer data was ‘at the heart’ of the business but ‘we’ve fallen short’.

‘We’ve taken action to close off this unauthorised access and though we have currently no evidence of fraud as a result of these incidents, we are taking this extremely seriously,’ he said.

Rate rise hopes

After opening 39 points, or 0.5%, down at 7,742, the FTSE 100 see-sawed to close nine points up at 7,713 as investors waited to see if the US Fed would announce a further 0.25% rise in US interest rates this evening.

‘The bank is expected to top for a 0.25% interest rate increase, and if it does, it will be the seventh consecutive increase in this cycle,’ said Fiona Cincotta, senior market analyst at City Index.

Eyes are also on the European Central Bank (ECB) meeting tomorrow where, Cincotta said, ‘markets are hoping for some clarity from European central bankers on their plans to wind down the ECB’s quantitative easing programme’.

Deliveroo dents Just Eat

Just Eat (JE) was the biggest blue chip faller, sliding 7.5% to 785p.

The online delivery site was hit by news that rival Deliveroo announced it will add 5,000 new restaurants to its platform and a new feature that will allow restaurants to handle their own delivery not just those using its service to be listed on the site, putting it in direct competition with Just Eat.

Speculation that Deliveroo will IPO soon is rife but chief executive Will Shu has said the company is ‘not in any rush’ to list.

While there may have been excitement around Just Eat, the FTSE was generally subdued ahead of the US Federal Reserve’s interest rate decision.

Connect crumples

Shares in Connect (CNCT) almost halved following a profit warning from and resignations of the chief executive and finance director of the the distribution and logistics group.

The shares plummeted 48.5% to 26p as the small-cap company ‘materially reduced’ expectations for full year profit. In a trading statement the company it said was closing its parcel delivery arm, Pass My Parcel, and its Parcel Shop network.

The dividend will also be ‘substantially reduced’, although it did not say by how much.

Chief executive Mark Cashmore is stepping down and a replacement sought with chief financial officer David Bauernfeind immediately replaced by Tony Grace from deliver firm Yodel.

The company, formerly known as Smiths News, has had a tumultuous 18 months as its turnaround plan failed to win over investors who fled the stock. A profit warning at the beginning of the year saw £80 million wiped from the value of the business.



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