Interactive Investor

ii view: Currys shares soar on profit optimism

Driving higher profit margin services, focusing on costs, and offering customers the choice to buy online or in store. We assess prospects.

14th May 2024 12:21

by Keith Bowman from interactive investor

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currys shop retail 600

Full-year trading update to 27 April

  • Like-for-Like (LFL) sales down 2%
  • Second-half LFL sales down 1%, improved from a first half decline of 4%


  • Now expects full-year adjusted profit of between £115 million and £120 million, up from "at least" £105 million previously

Chief Executive Alex Baldock commented:

“Our performance is strengthening, with good momentum in the UK&I, and with the Nordics getting back on track. Sales are now growing again, margins are benefiting from higher customer adoption of solutions and services, and cost discipline is good. All this means improved profits and, with our strong cash position, we’re well set up for the year ahead.”

ii round-up:

Electrical goods retailer Currys (LSE:CURY) has raised its full-year profit forecast again, helped by a return to sales growth in the 16 weeks to late April. 

The FTSE 250 company, which previously rejected takeover interest from both US private equity concern Elliot Advisors and Chinese retailer, now expects annual adjusted profit to come in at between £115 million and £120 million, up from "at least" £105 million to £115 million.

Currys shares rose 9% in UK trading to a 14-month high having come into this latest news up by just over a quarter year-to-date. That compares to a 6% gain for UK rival AO World (LSE:AO.) and a 5% increase for the FTSE 250 index.  

Currys trades across 720 stores and several websites in six countries including the UK. Like-for-like sales for the 16 weeks to 27 April rose 2% versus a year ago, up from a 3% drop over the 10-week peak Christmas trading period to 6 January.

Trading momentum at its UK and Irish business was said to be ‘improving,’ with adjusted profit at its Nordics business expected to more than double year-over-year and ahead of management’s prior expectations. The UK accounted for just over half of all sales during the last financial year, with Sweden and Norway generating a combined one-quarter.

Expected year-end net cash of around £95 million contrasts with last year’s year-end net debt of £97 million, aided by its recent Greek business disposal, with interest related costs coming in below prior estimates.

Full-year results are scheduled for 27 June.

ii view:

Formerly Dixons Carphone, Currys brand names today include Mobile iD in the UK and Ireland and Elkjøp in the Nordics. Employing almost 25,000 people, 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 product deliveries. 

For investors, elevated borrowing costs continue to pressure consumer spending, with slow housing market transactions also likely hindering sales of white goods such as washing machines and fridge freezers. The sale of its Greek business reduces geographical diversity, competitors such as AO World are always a threat, while the dividend remains suspended given the company is focused on strengthening the balance sheet. 

On the upside, a recovery at its Nordic business continues and demand for higher profit margin services such as repairs appears to be growing. A store portfolio offers consumers the opportunity to test products before buying, while both Microsoft Corp (NASDAQ:MSFT) and Accenture have recently been called in to improve Currys’ own AI technology.

In all, a continuing recovery offers grounds for optimism and recent bid approaches shows others believe there’s value here. However, slender profit margins, intense competition and an uncertain consumer spending outlook might mean that more cautious investors will demand evidence of consistent profit delivery.


  • Focus on costs
  • Net cash held


  • Tough economic backdrop
  • Suspended dividend payment

The average rating of stock market analysts:

Strong hold

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