- Positive peak sales
- UK and Nordics in growth
- Dividend reinstatement demonstrates turnaround success
Currys’ (CURY) shares sparked up 10.5% to 91p after the electricals retailer delivered yet another full-year profit guidance upgrade following a strong festive period, with the TVs-to-laptops purveyor delivering like-for-like sales growth in both the UK and Nordics.
Benefiting from a technology replacement cycle that is driving consumer demand for new AI-enabled computers, Currys also delighted investors with news it plans to reinstate the dividend off the back of strengthening cash generation and a much improved balance sheet.
The FTSE 250 retailer last declared a dividend at its half-year results in December 2022 but then paused the payout amid Nordic struggles, inflationary pressures knocking the business for six, and a decision to exit the Greek market.
A VERY MERRY CHRISTMAS
For the 10 weeks ended 4 January 2025, Currys’ UK & Ireland like-for-like sales ticked up 2% with strength in mobile, gaming and premium computing more than compensating for weaker TV sales. In the Nordics, like-for-likes nudged up 1% with the firm’s Elkjop chain making share gains in a tough market.
Currys’ management highlighted a ‘disciplined trading performance’, with the decision to avoid discounting products reflected in stable gross margins in the UK and an improving gross margin in the Nordics.
PROFIT GUIDANCE UPGRADED AGAIN
On the back of robust sales over the festive peak, Currys now expects to achieve adjusted pre-tax profits of £145 million to £155 million for the year to April 2025.
That’s comfortably ahead of the £140 million consensus estimate, even after factoring in higher costs from the UK Budget, and investors can look forward to a final dividend of ‘around 1.3p’ alongside the full-year results in July.
WHAT DID THE CEO SAY?
‘This Peak, customers took advantage of our market-beating deals and best-ever availability,’ enthused CEO Alex Baldock. ‘AI laptops, where we have 75% market share, and premium mobiles proved especially popular. In all markets, customers showed they preferred shopping both online and in-store, and our investments in both channels paid off.’
Baldock continued: ‘In the UK & Ireland, we’ve continued to grow sales and keep margins stable, offsetting current cost headwinds. iD Mobile and B2B performed especially strongly, as did sales of the services and solutions that are so valuable to customers and to us.’
THE EXPERT’S VIEW
Russ Mould, investment director at AJ Bell, said the true sign of a turnaround story reaching its maturity is the resumption of dividends and Currys has finally reached this status.
‘Having taken time to find its feet, Currys has since got back on track and delivered a string of good news around like-for-like sales growth, margins and cash flow. Analysts have been upgrading earnings forecast and the shares have continued to move higher over the past 12 months,’ explained Mould.
He added: ‘Currys looks vindicated in its battle to fight off takeover interest from Elliott, with its share price now double the level it was at just before the suitor came knocking on its door.
‘In an environment where consumers continue to watch every penny, it’s impressive that Currys has managed to report a good festive trading period. It’s clear that electronic devices were popular choices to put under the Christmas tree in 2024. Currys has also cemented its reputation as the go-to place to get help when technology goes wrong.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Martin Gamble) own shares in AJ Bell.
