- Positive like-for-like growth
- Nordics no longer a drag
- ‘Strong’ net cash position
Electronics retailer Currys (CURY) continues to impress after brushing off takeover interest from private equity last year.
Shares in the TVs-to-laptops seller sparked up 11% to 99p in a down market on 3 April after the retailer raised its full-year 2025 profit guidance for the second time in 2025-to-date.
The latest in a series of upgrades from Currys follows ‘robust’ trading in the period since 4 January 2025, with the Alex Baldock-bossed group delivering continued positive like-for-like sales growth in the UK & Ireland as well as the Nordics.
Investors also welcomed news the FTSE 250 constituent expects to close the year in a ‘strong’ net cash position.
BUCKING THE RETAIL GLOOM
With less than five weeks of its financial year remaining, Currys expects adjusted pre-tax profits to be around £160 million.
That is well above the technology product purveyor’s previous £145 million to £155 million guidance ranged and 11% higher than consensus of £144 million.
To recap, Currys lifted its profit guidance yet again in January after delivering ‘strong peak trading’.
For the 10 weeks ended 4 January 2025, Currys’ UK & Ireland like-for-like sales increased by 2% with mobile, gaming and premium computing offsetting weaker TV sales, while Nordic like-for-like sales increased by 1% with the Elkjop chain gaining market share in a challenging environment.
NO LONGER A DRAG
Having been a drag on Currys’ sales for the past three years, the Nordics region has returned to growth and gross margins are expanding in this part of the business.
Panmure Liberum said: ‘The outlook in the Nordic economies appears to be improving - prompting us to question whether Nordic EBIT (earnings before interest and tax) margins could return to pre-pandemic levels sooner rather than later. If this were so, we see circa £40 million upside to our outer year forecasts.’
Due to a technology replacement cycle driving consumer demand for new AI-enabled computers, Currys plans to reinstate the dividend alongside the full year results in July, drawing confidence from its strengthening cash generation and rehabilitated balance sheet.
ENVIABLE POSITION
‘Sales in the company’s UK operation are solid and the company has seen a meaningful recovery in its Nordics business,’ observed AJ Bell investment director Russ Mould.
‘Currys is one of the last remaining electronics retailers with a physical presence on the high street and it is making a virtue of this status by offering handholding when people are buying increasingly complex consumer technology. It also offers a full range of services from credit to delivery, installation, repairs and recycling, and these help it to stand out from the crowd.
‘A notable feature of Currys’ recent performance is the strong cash flow which puts the company in an enviable position relative to other retailers. It potentially allows Currys to go from being prey to predator in the sector, should it spy the right opportunity.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Tom Sieber) own shares in AJ Bell.
