- Group sales meet forecasts
- Pre-tax profit increases 37%
- Best balance sheet for 10 years
Electricals retailer Currys (CURY) ‘beat techspectations’ with its results for the year to the beginning of May and showed confidence in its balance sheet by resuming dividend payments.
The shares jumped as much as 12p or 10% to a new three-year high of 130p, taking them to the top of the FTSE 250 leader board at one point.
ONWARDS AND UPWARDS
Washing machine, air fryer and laptop seller Currys reported a solid set of results for the year to 3 May, with group sales up 2% on a like-for-like basis to £8.7 billion.
The increase was led by the UK and Irish business, which posted 4% like-for-like growth, while Nordic like-for-like sales were flat in sterling terms despite a tough market and currency headwinds.
Encouragingly, the firm experienced organic growth in both channels, in-store and online, and gross margins grew faster than inflation, recovering towards their historic highs.
Adjusted pre-tax profit rose 37% to £162 million, while free cash flow increased by an impressive 82% to £149 million.
That left year-end cash of £184 million, or £88 million more than the previous year, resulting in the group’s strongest balance sheet in over a decade.
The board therefore recommended a final dividend of 1.5p, ‘in line with our ambition to deliver consistent and growing shareholder returns’.
The company also said trading in the first two months of the current financial year was in line with expectations, and it was ‘comfortable’ with consensus earnings forecasts.
‘Currys’ performance continues to strengthen, and the business has real momentum,’ commented chief executive Alex Baldock.
‘Customers are increasingly adopting our credit, setup, installation, repair and connectivity services, building valuable recurring revenues for Currys. We’re now seen as the home of AI-enabled tech and our investments in new product categories and serving B2B customers are showing early signs of success.’
EXPERT VIEW
Analysts at Panmure Liberum called the earnings report ‘a seminal moment’ for Currys.
‘Every part of the business is heading in the right direction, the balance sheet has not been this strong in a decade, dividends are back and the prospects for buybacks this year are very real. Positive trading catalysts are building, and there is a change in emphasis in the report towards growth.
‘There is a tone of confidence the group will mitigate the inflation and government-imposed cost hikes, with no visible gross margin headwinds, so if like-for-likes can be sustained (or even grow from here) then operating leverage should start to kick in.’