Exactly a year on, the break-up of GUS is looking dangerously like the FTSE 100 demerger that destroyed shareholder value.

Shares in Home Retail Group, the owner of Argos and Homebase, sit more than 2 per cent below the level at which they were spun off.

Experian, the credit reference agency which raised fresh equity on the split, has fared even worse: down nearly 10 per cent after yesterday’s trading statement.

At first read, that update appeared anodyne. Organic sales growth of 6 per cent for the first half was modestly down on the 7 per cent reported for the first quarter, but that was much as expected. The company also confirmed it was on track to meet full-year forecasts.

But what troubled was the evidence that the toll of the US mortgage lending downturn has only worsened over the past three months. Organic growth in the US slowed to 3 per cent in the quarter to September 30, down from 7 per cent in the previous period. Trading at LowerMyBills, Experian’s US website that directs customers from search engines to potential loan providers continues to deteriorate. That operation is small in the context of Experian’s overall business — it accounts for less than 5 per cent of group sales — but it is worrying that management predicted in July that the first quarter should mark the lowpoint. That it has not triggers worrying associations with HSBC’s Household operation, which found that, when the US sub-prime downturn took hold, its business did not behave as its models had predicted. Then there is Experian’s Fares joint venture, which draws half of its sales from new mortgage lending and accounts for 6 per cent of operating profits. Its performance was not split out, but recent job cuts at First American, its US majority owner, do not augur well.

The other concern is that Experian’s shares had been buoyed by the view that demerger had left it vulnerable to takeover. However, turbulent credit markets mean that prop has now disappeared.

That is not to say Experian will not fare well in a downturn. Tougher times create demand for increased cross-checking of a potential customer’s creditworthiness. It is also benefiting from a shift among its bank customers from loan acquisition to higher-margin activities such as cross-selling and credit collection. It is tempting to read yesterday’s 7 per cent fall in the shares as punishment that Experian, unlike GUS, has overpromised and underdelivered. But at 16 times next year’s earnings, it is worth holding on.

Carphone Warehouse

Carphone Warehouse, the £3.1 billion retailer, celebrated a significant landmark in its 18-year history last month when it joined the FTSE 100. A more interesting development was little noticed: Carphone has begun selling laptops, Apple TVs and wireless gadgets in its stores. Its step is partly defensive — to try to help it to retain broadband customers and to fix itself in the public mind as a digital expert.

This is more important in the light of yesterday’s trading update, which showed a sharp slowdown in uptake of its broadband service — 29 per cent on the last quarter. Although Carphone insists that this will pick up in the year’s second half, with net additions surging back up to 125,000 a quarter, against 89,000 this time around, it faces strong competition from BT and BSkyB. New entrants such as Telefónica’s O2 and the Post Office are set to up the ante further. It also unclear how many of last year’s first wave of TalkTalk “free” broadband customers were so dismayed by the service received in those early days that they will walk when their 18-month contracts end.

Yet the move into consumer gadgetry also puts Carphone much more in the domain of BestBuy, the US retailer that is its partner and now 3 per cent shareholder. That stake has only intensified speculation that Charles Dunstone, a 33 per cent shareholder and a co-founder, may eventually sell out to the chain.

While still in charge, Mr Dunstone should not be underestimated. The full-year outlook was strong and Carphone’s coup in securing rights to sell the iPhone, alongside O2, should be a winner this Christmas. At 352p, or 18 times 2008 earnings, the shares are not cheap, but are worth holding.

CVS Group

For anyone who has smarted at the size of their vet’s bills, CVS is worth a look. On joining AIM yesterday, this Norfolk-based company became the first operator of veterinary practices to list on the London stock market.

Its strategy is straightforward: to consolidate a fragmented sector and enjoy the benefits of scale that come from centralising administration and greater purchasing power. It has made considerable progress in its eight years of private ownership. CVS has mopped up 45 practices, giving it 127 surgeries, three laboratories and a 6 per cent share of the market. With a £14 million acquisition facility and quoted paper now at its disposal, it is well placed to maintain that pace.

CVS’s broader attraction is a play on demographics, both human and animal. An ageing population spells wider pet ownership, currently growing at 4 per cent a year. An ageing pet population increases demand for veterinary care. At the same time, the wider take-up of pet insurance has increased the frequency of visits to vets and the complexity of procedures undertaken: from hip replacements to microchip implants.

The catch is that CVS, at 228½p, or 27 times current-year earnings, is not obviously cheap. And the record of other attempts to consolidate professional practices is not glorious. But CVS comes from the same stable as Dignity, the phenomenally successful undertaker, and enjoys first-mover advantage. Buy on weakness.

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