Demand for AI tech boosts Currys
Electrical retailer Currys has reinstated its dividend after a jump in sales related to AI tech helped boost the firm’s top and bottom lines.
In a trading update issued this morning, the FTSE 100 firm said it expected to record a profit for its 2024/25 financial year of £145m to £155m, up 23 per cent to 31 per cent year on year.
The omnichannel retailer said that like-for-like revenue in the UK and Ireland grew two per cent in the 10 weeks ended Janaury 4, while revenue in the Nordics – a previously tough area for Currys – grew one per cent.
Chief Executive Alex Baldock said: “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.”
Baldock added that AI laptops, where the company has a 75 per cent market share, “proved especially popular”.
“In all markets, customers showed they preferred shopping both online and in-store, and our investments in both channels paid off,” Baldock said.
The firm said that order & collect sales grew 13 per cent, while online-in-store sales grew 24 per cent.
Panmure Liberum analysts backed Currys as their most preferred consumer stock of the year last week, expecting it to reap the “initial rewards of a significant amount of work done over the last few years”, analyst Wayne Brown said.
Currys’ £32m budget hit
Last Autumn, the retailer estimated the impact of measures announced in Labour’s inaugural budget at £32m, including a £12m increase in National Insurance contributions and a £9m increase in wages due to National Living Wage increases.
Of its higher National Insurance contributions, it attributed £4m to the higher tax and £8m due to the threshold change, which went from £9,100 to £5,000.
The firm called price rises “inevitable” but said it would “seek to mitigate the remaining impact as much as possible through further cost saving measures, including process improvement, automation, offshoring, outsourcing and overhead efficiencies”.
Currys added that its cost-savings this year would “more than offset” inflation.