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CRC Group Shares Rise Amidst Turnaround Efforts

Strategic Insights

— 2 min read

As the UK-based electronic equipment servicing and repair company CRC Group continues its upward trend, adding 4.4 per cent to its share price yesterday, investors are becoming increasingly optimistic about the company's prospects. Despite a challenging 2003, marked by a 50% drop in sales due to Nokia's shift in its servicing business model, CRC Group's management has taken swift corrective action, leading to cost savings that are expected to offset the revenue losses. Analyst Robert Corden of Charles Stanley predicts pretax profits of £7m when the company reports its 2003 results later this month, and believes the shares should recover to pre-June 2003 levels, targeting a price range of 180p-240p.

Key Takeaways:

  • CRC Group's share price rose 4.4% to 154p yesterday, continuing its upward trend.
  • The company's difficulties in 2003 were largely due to Nokia's change in servicing business model, which accounted for over 50% of CRC's sales.
  • Analyst Robert Corden of Charles Stanley expects pretax profits of £7m when CRC Group reports its 2003 results.
  • The company has taken swift corrective action, leading to cost savings that are expected to offset revenue losses.
  • CRC Group's set-top box activities are likely to show continued growth, and benefits from its recent German acquisitions should start to flow through this year.
  • The servicing of mobile phones remains a significant proportion of sales, and as phones become more expensive and complicated, this is likely to boost CRC's margins.
  • Robert Corden believes the shares should recover to pre-June 2003 levels, targeting a price range of 180p-240p.

Statistics:

  • CRC Group's share price has risen 4.4% to 154p.
  • The company's shares have yet to reclaim pre-June 2003 levels.
  • Nokia accounted for over 50% of CRC Group's sales at the time of its business model change.
  • Analyst Robert Corden predicts pretax profits of £7m.
  • The servicing of mobile phones still accounts for a sizeable proportion of CRC Group's sales.
  • The growth of set-top box activities is expected to continue.

Sources:

  • "people are waking up to the fact that last year is not going to be the disaster everyone thought", says Robert Corden at Charles Stanley.
  • "Whilst no-one is going to be happy about some of the numbers that have been in the press in the past few months, 2003 was not as bad as some of them will say that it was", quotes Robert Corden at Charles Stanley.

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