Currys warns of ‘uncertain’ outlook despite profit rise

However, group revenues dropped 2% to £10.14bn, and declined 3% on a like-for-like basis

Currys has warned that its outlook for consumer spending is “uncertain”, despite reporting that pre-tax profits jumped 19% year-on-year from £156m to £186m for the year ended 30 April 2022.

The financial year saw group store sales increase 24%, with 61% growth in the UK and Ireland, which is “higher than expected”. International sales also generated 46% of sales and 59% of adjusted profits.

However, Currys’ group revenues dropped 2% to £10.14bn, and declined 3% on a like-for-like basis.

Although UK and Ireland business grew 21% in adjusted EBIT to £111m, international sales declined 4% to £163m and UK sales also dropped 3% year-on-year to £5.48bn, however this is up 2% on a two-year basis.

Meanwhile, group adjusted EBIT increased 5% year-on-year, and 6% on a currency neutral basis. UK and Ireland adjusted EBIT grew £19m.

Headwinds from increased business rates, taxes, changes to reflect IT cloud expenditure and cost inflation were reportedly offset by improvements in gross margin, £69m savings from cost reduction programmes and a positive impact of movement of the network debtor.

The business returned £78m to shareholders during the year in dividends and share buybacks. Currys is now proposing a full year dividend of 2.15p, taking the total dividend for 2021/22 to 3.15p.

Looking ahead, Currys said forecasting 2022/23 is “difficult”. However, it currently expects pre-tax profits to be in the range of £130-150m and the business is now targeting a 3% adjusted EBIT margin by 2023/24.

Alex Baldock, Currys group chief executive, said: “Today we’re going even further with ‘2021 Price Lock’, our new price freeze on dozens of great products. We’re investing in our energy-efficient ‘Go Greener’ range. We’re doing more to help customers spread the cost, announcing ‘12 month Pay Delay’ on every purchase over £99.

“Our scale as an international market leader, our grip on costs and our strong relationships with suppliers will allow us to manage inflationary headwinds and keep amazing technology within reach of everyone, even now. That’s what Currys exists to do, and it’s never mattered more.”

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