18 March 2024 , 08:28
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Currys has raised its annual profit outlook after a potential takeover fell through last week.
The electricals chain saw two potential buyers, Waterstones owner Elliott Advisors and Chinese online retailer JD.com, walk away from bid talks. Despite this setback, Currys reported better than expected recent trading, with sales in the UK, Ireland and its troubled Nordics division growing since January 6.
This follows a decline in sales over the Christmas season. The company now expects its pre-tax profits for the year to April to be at least £115 million, up from the previous estimate of between £105 million and £115 million.
This is the second time Currys has increased its profit guidance this year, thanks to cost savings helping to offset sales woes. Last week, the company's shares fell more than 12% after the potential suitors pulled out.
US investor Elliott Advisors had made two offers for the company, both of which were rejected by Currys for being too low. The investment management group announced last Monday that Currys had turned down several tries to talk with the board, so they won't try to bid a third time.
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JD.com, China's biggest online retailer, considered making an offer for Currys last month, but on Friday, they said it was not going to make an offer. Earlier this month, JO Hambro Capital Management UK Equity Income Fund, who owns shares in Currys, said the tech shop should wait for a deal around £1 billion.
Currys has been changing its business focus to concentrate mainly on shops in the UK and Ireland. Last year, the bosses sold their shops in Greece and Cyprus for 200 million euros (£171 million). They have also addressed business issues at their shops in the Nordics that were losing money.
Over Christmas, sales at Currys went down by 3% because as consumer cut back on spending. But now, Currys says sales in the UK, Ireland, and the Nordics are doing well and revenues have improved. Alex Baldock, the big boss of the group, said: "We've been working to get the Nordics back on track, while keeping up the UK and Ireland's encouraging momentum."
"Both are progressing well, despite still-challenging markets, and we now feel confident to raise this year's profit expectations to at least the top of our previous guidance." The group anticipates that the sale of its Greek operations will be finalised in the first half of April.