- Revenue drops but profit higher
- Dividend increased 5%
- Guidance for earnings to fall in current financial year
Electronics retailer Currys (CURY) gained some relief for its battered share price with a broadly reassuring set of full year results.
The numbers, covering the 12-month period up to the end of April, showed revenue down 2% to £10.12 billion. Store sales were up 24% but this was offset by a 29% decline in online sales.
Currys benefited from people buying laptops and other electronic goods during the pandemic but pressures on consumer spending and the fact that much of this earlier spend is unlikely to be repeated in the near term have clouded the outlook for the company.
So, although the shares are up 6.6% to 71p today, they are down more than 40% year-to-date.
Pre-tax profit was up sharply from £33 million to £126 million, with the adjusted figure also rising, advancing 19% to £186 million from £156 million year-on-year.
Currys also said that it will pay a full-year dividend of 3.15p per share, up 5%. However, profit is expected to fall to a range of £130 million to £150 million in the current financial year.
REASSURANCE ON CASH
Given the recent emergency fundraise announced at online-only peer AO World (AO.), investors will have been somewhat reassured to see the company report free cash flow of £72 million and year-end net cash of £44 million with average net cash over the period of £290 million.
Shore Capital analyst Bradley Hughes commented: ‘Results come amidst a chaotic backdrop triggered earlier this week by the goings on at AO World and in our view will keep investors focus on the cash generation of the business.
‘Encouragingly operating cash flow margins were up in the year by 30 basis points to 3.6% and EBITDAR (earnings before interest, tax, depreciation, amortisation and rental costs) were flat at 5.9%.’
His counterparts at Numis added: ‘Together, the headlines on in-year top-line and profit are supportive, some of the detail around cash flows and outlook look to require some further thinking, and these areas are important to the equity story from this juncture.’
