14 May 2024 , 07:53
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Currys has raised its profit expectations for the year, following a return to sales growth.
The electronics chain now expects pre-tax profits to be at least £115million for the year ending April 27, up from previous analyst expectations of £105million. This comes after a period of underwhelming sales for the retailer, which sells everything from TVs and mobile phones to kettles and dishwashers.
The company had previously noted that the cost-of-living crisis was impacting demand for its more expensive items. However, like-for-like sales grew 2% for the 16 weeks to April 27 compared to the Christmas period. Despite this, like-for-like sales for the year are expected to have dropped 2% compared to the previous 12 months.
Currys also revealed that cost savings made across the group were "more than offsetting inflation" and its year-end net cash position is expected to be around £95million. Earlier this year, the company was in the spotlight due to a potential bidding war between US group Elliott Advisors and Chinese retail giant JD.com.
Hopes for a takeover of Currys were quashed as two potential bidders backed out. Elliott Advisors pulled the plug on its pursuit after "multiple attempts to engage with Currys' board, all of which were rejected", including a bid exceeding £750million. Currys dismissed Elliott's offers as too low, stating they did not reflect the company's true worth.
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Chinese retail giant JD.com also toyed with the idea of placing an offer but ultimately decided against it. The potential takeover bids come at a time when Currys is revamping its strategy, concentrating on its UK and Ireland operations following the sale of its Greek and Cypriot division last year.
In the Nordics, where Currys has been struggling, there are signs of a turnaround, with earnings forecast to more than double from the previous year. Currys reported that like-for-like sales remained steady in the Nordic region during the second half of the year.
Currys chief executive Alex Baldock said: "Our performance is strengthening, with good momentum in the UK and Ireland, 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."