Currys says full-year profit to exceed guidance

(Sharecast News) - Electricals retailer Currys said on Tuesday that full-year profit was set to be ahead of guidance as it hailed strong performances in the UK & Ireland and the Nordics.

The company said in a trading update that group like-for-like sales growth was strong at 4% for both the 16 weeks to 2 May and the full year.

LFL sales in the UK & Ireland were up 3% in the year to 2 May, while sales in the Nordics were 6% higher.

Currys now expects full-year adjusted pre-tax profit of around £191m, up 18% on the previous year and just above guidance for between £180m and 190m.

The group hailed continued robust trading in the UK & Ireland, with adjusted earnings before interest and tax expected to growth "slightly", driven by market share gains and strong growth in services, B2B and new categories.

Currys said sales growth and stable gross margin more than offset cost headwinds, and iD mobile subscribers rose 18% year-on-year to 2.6m.

In the Nordics, adjusted EBIT is expected to show strong growth on the year, it said, with recent growth driven by market share gains and a very strong performance in kitchens and new categories such as computing components.

Chief executive Alex Baldock said: "We finished a good year well, with strong performance in the UK&I and the Nordics, a region that represents 40% of group sales and that grew especially strongly.

"Profits grew 18% and free cash flow increased again, from a strategy that is delivering ever-stronger results for colleagues, customers, shareholders and society.

"Recent trading has been very solid; we've not yet seen an impact from the Middle East conflict, and our energy costs are well hedged for the coming year.

"This performance, combined with our strong balance sheet, means we are well positioned to navigate any market volatility ahead, tap into exciting growth opportunities and continue returning capital to shareholders."

At 0945 BST, the shares were up 11% at 140.40p.

Russ Mould, investment director at AJ Bell, said: "Against a difficult backdrop, Currys' latest update has helped electrify its share price as investors react to an upgrade to full-year profit guidance. It's a testament to the job CEO Alex Baldock has done in recent years and underlines why he will be a loss when he leaves to run retailer Boots.

"Baldock's strategy of helping people navigate an increasingly complex world of consumer technology through the lifecycle of a product - from credit services to repairs and recycling - has paid off. While it offers credit services to customers, Currys is not exposed to risks around rising levels of bad debt because these are underwritten by a third party.

"The decision to rebuff a takeover offer from US firm Elliott in 2024 looks wise, with the share price having more than doubled since then.

"Currys benefits from being one of the last physical electronics retailers of any scale and when people need some handholding it becomes an obvious destination, underpinning market share gains. The Nordics business which had been a problem child of the group for a period is now a reformed character, and Currys' mobile phone offering is resonating with cost-conscious consumers in the UK."

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