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Upgrades profit forecast by 10%
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UK and Ireland and Nordics return to growth
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Shares up 9%
LONDON, May 14 (Reuters) - British electricals retailer Currys, which rejected a takeover offer earlier this year, raised its annual profit forecast by around 10% after sales returned to growth, boosting its shares.
The stock jumped 9% to 71 pence in early deals on Tuesday, hitting levels last seen in March 2023.
The group's upgraded forecast follows its rejection of a takeover bid from U.S. investor Elliott Advisors pitched at 67 pence per share in February, which Currys said undervalued its growth potential.
In March, China-based online retailer JD.com, which had also said it was interested in Currys, decided not to make an offer for the group.
Analysts at Liberum said Currys focus on costs meant that it was outperforming its peers.
"The current valuation remains far too cheap, giving no credit for any further earnings upside even as momentum now turns positive and ahead of macro signs improving," they said in a note.
Currys said demand for fridges, washing machines, and computers pushed underlying sales up 2% in the first four months of the year in both its UK and Ireland business and the Nordics region, improving on the Christmas period when sales had fallen compared to the previous year.
As such, it expects pretax profit in the year to the end of April to come in at between 115 million pounds ($144 million) and 120 million pounds, compared to the at least 105 million pounds previously guided.
"Sales are now growing again, margins are benefiting from higher customer adoption of solutions and services, and cost discipline is good," Chief Executive Alex Baldock said in a statement.
The group's upgraded guidance puts it on track to deliver a result in line with last year's outcome even without the extra income from its Greek business which it sold earlier this year. ($1 = 0.7961 pounds) (Reporting by Sarah Young; Editing by Sachin Ravikumar and Paul Sandle, Kirsten Donovan)
