Early year trading update for 17 weeks to 26 August
- Overall same store or like-for-like (lfl) revenue down 4%
- UK & Ireland lfl revenue down 2%
- Nordics lfl revenue down 8% / Greece lfl revenue up 3%
Chief Executive Alex Baldock commented:
"Our priorities this year are simple: to keep the UK&I's encouraging momentum going, and to get the Nordics back on track. We're making good progress on both, in what continues to be a challenging economic environment. We remain confident that we're building a stronger business that's resilient today and fit to prosper in the longer term."
Currys (LSE:CURY) trades across more than 820 stores and several websites in eight countries including the UK.
It trades under the Currys and Mobile iD brand in the UK and Ireland, Elkjøp in the Nordics and Kotsovolos in Greece and Cyprus.
For a round-up of this latest trading update announced on 7 September, please click here.
Formerly Dixons Carphone, Currys today employs around 28,000 people. Competing against rivals including AO World (LSE:AO.) and John Lewis, its operations include product repair facilities in Newark in the UK, a product sourcing office in Hong Kong and a wide distribution network for both home and store deliveries. The UK & Ireland generate its biggest slug of sales at around 53%, followed by the Nordics and including Norway, Sweden, Denmark, and Finland at 40% and Greece and Cyprus 7%.
For investors, fierce competition within its Nordics business is creating strong headwinds. Raised borrowing costs across all geographies is likely diverting potential customer spending, prior group net cash had turned to net debt as of late April, while the final dividend payment was previously axed as management moved to bolster its balance sheet.
- Are Tesco shares in the ‘bargain’ basket?
- ii view: Primark owner AB Foods sweetens outlook
- Stockwatch: investors bag big profits after company lands the big one
On the upside, initiatives to help its Nordic business include promoting higher-margin services and cutting costs. Product sales advice is available, which is something that retail rivals like Amazon (NASDAQ:AMZN) don't have, credit usage at its UK and Irish business is growing, while the previous axing of the dividend and reduction in pension contributions is arguably sensible at a time of economic challenge and rising interest rates.
More cautious investors are likely to await a demonstrable upturn in fortunes before dipping in, although a consensus analyst estimate of fair value at over 65p per share might interest speculators.
- Focus on costs
- Diverse product/services and geographical footprint
- No final dividend payment
- Tough economic backdrop
The average rating of stock market analysts:
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.