16.01.2025
Yesterday’s Update for the ten weeks to Saturday 4th January, covering the group’s Peak Trading covering the run-up to Christmas and then the New Year Sales periods, showed Currys (LON:CURY) putting on quite a strong performance.
Certainly, the market approved, by marking the group’s shares up 11.19% on the day, with them closing up 9.17p at 91.17p.
The dealing turnover was more than double it average volume, at some 8.27m shares traded, valuing the group at £1.05bn.
The Business
The company is a leading omnichannel retailer of technology products and services, operating online and through 715 stores in 6 countries.
In the UK & Ireland it trades as Currys and in the UK it operates its own mobile virtual network, iD Mobile.
In the Nordics it trades under the Elkjøp brand.
Management Comment
CEO Alex Baldock stated that:
"We're pleased by our strong Peak trading.
We grew in both markets, continuing the trend of Currys' strengthening performance, and we believe this year's profits will be ahead of market expectations.
With our ever-stronger cash generation and much improved balance sheet, the Board now expects to pay a dividend at the year-end.
This Peak, customers took advantage of our market-beating deals and best-ever availability.
AI laptops, where we have 75% market share, and premium mobiles proved especially popular.
In all markets, customers showed they preferred shopping both online and in-store, and our investments in both channels paid off.
In the UK&I, we've continued to grow sales and keep margins stable, offsetting current cost headwinds. iD Mobile and B2B performed especially strongly, as did sales of the services and solutions that are so valuable to customers and to us.
Nordics was back into growth, continuing its improving trajectory, outperforming competitors while improving margins and reducing costs.
In a still-weak market, the evident strength of our Nordics business bodes well for the future.”
Current Year Guidance
The group has now given guidance that it expects the current year to end-April 2025 to show an adjusted pre-tax profit in the £145m to £155m range.
Analyst’s Views
Analysts Wayne Brown, Anubhav Malhotra and Ben Hunt, at Panmure Liberum, increased their Target Price for the group’s shares, from 155p to 170p, while upgrading its profit figures by some 5%, following the Update.
For this year, they are going for sales of £8,498m (£8,476m), estimating pre-tax profits of £152.1m (£118.0m), generating earnings of 10.1p (7.9p) per share.
The group’s balance sheet strength is expected to see it return to the dividend lists, with a payment of 1.3p (nil) per share.
For 2026, the brokers estimate £8,668m in sales for 2026, with £157.4m profits, 10.5p earnings, and a 2.1p dividend per share.
Jumping a year ahead to 2027, their figures suggest £8,902m sales, £174.2m profits, 11.6p earnings and a 2.3p dividend.
In My View
The group’s shares, which had eased back from a recent peak of 97.30p to just 82p ahead of the Trading Update, now at 91.40p, they look primed for a good run back over the 100p level and higher still.
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