Currys has seen profits before tax rocket 144% to £22m in the first half of the year, and expects to see growth in its full-year results, despite warning of “muted” customer sentiment in the UK and Ireland.
For the period ended 1 November, group revenues rose 8% to £4.23bn, or 6% on a currency-neutral basis, which the retailer attributed to stronger trading in the Nordics and continued market share gains in the UK and Ireland.
Adjusted EBIT also increased by £13m to £54m, while reported EBIT rose £14m to £43m. The company ended the period with net cash of £133m, up £26m on a year earlier, despite pension contributions and shareholder returns totalling £128m.
In the UK and Ireland, like-for-like revenue rose 4%, with overall revenue up 6%. The group said it outperformed a declining market, gaining 60 basis points of market share. Growth was driven by new product categories, B2B sales and services, with recurring service revenue rising 11% and credit adoption increasing to 23.3%.
However, adjusted EBIT in the region fell £4m year-on-year to £19m, reflecting higher colleague costs. Currys said government-driven cost increases were not fully offset by cost savings and operating leverage, despite underlying margin progress.
Performance in the Nordics improved significantly, with currency-neutral revenue up 7% and adjusted EBIT rising 94% to £35m. The group said growth was broad-based across most product categories, including a 30% increase in Epoq kitchens sales, supported by improving consumer sentiment.
Since the period ended, the group said that trading has been in line with board expectations and maintained its full-year guidance for growth in profits and free cash flow.
Looking ahead, Currys said it continued to target an adjusted EBIT margin of at least 3% in both the UK and Ireland and the Nordics over the longer term, alongside a focus on free cash flow generation and maintaining a net cash balance of at least £100m.
Alex Baldock, group chief executive of Currys, said: “We’re pleased with the momentum we’ve built, with healthy growth in sales, profits and cash flow.
“In the Nordics, being the clear leader in an improving market, combined with strong execution, has driven another notable step forward in profits. It’s pleasing that strong top-line growth is translating into improved profitability.”
He added: “In the UK&I, the consumer environment is more muted, and cost headwinds are unhelpful. Still, we’re the growing market leader, gaining share, and our margin and cost discipline is going a long way to mitigate headwinds and protect profits. In all markets, our big growth initiatives are paying off, our omnichannel model continues to win, and our growing services and solutions are great for customers and valuable to us.”
