ii view: positive momentum at confident Currys
Up from less than 45p in the autumn of 2023 and with the FTSE 250 retailer flagging demand for new AI-enabled laptops. Buy, sell, or hold?
8th January 2025 15:50
First-half results to 26 October
- Revenue up 1% to £3.92 billion
- Adjusted pre-tax profit of £9 million, up from a loss of £16 million
- Net cash of £107 million, up from net debt of £129 million
- No dividend payment
Guidance:
- Continues to expect growth in full-year profit and free cash flow
Chief Executive Alex Baldock commented:
"We're very encouraged by our progress. Currys' performance continues to strengthen, with profits and cashflow growing significantly, and the Group's balance sheet is strong.
"Looking ahead, we're confident of continuing our progress, and expect to grow profits and cashflow as promised this year.”
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ii round-up:
Currys (LSE:CURY) trades across 715 stores and several websites in six countries including the UK.
The FTSE 250 index constituent trades under the Currys and Mobile iD brands in the UK and Ireland and Elkjøp in the Nordics. It previously agreed the sale of its Kotsovolos electrical business in Greece.
For a round-up of these latest results announced on 12 December, please click here.
ii view:
Formerly Dixons Carphone, Currys today employs around 24,000 people. Geographically, the UK & Ireland made most of its adjusted profits during this latest period at 56%, with the Nordics the balance. Away from its store outlets, other operations include Europe's largest technology repair facility in the UK, a product sourcing office in Hong Kong, as well as a wide distribution network for both home and store product deliveries.
For investors, like-for-like, or same store sales in its Nordics region remain in negative territory. The broad backdrop for customers remains tough given elevated borrowing and housing rental costs. Competitors such as AO World are not standing still. The previous sale of its Greek business has reduced geographical diversity, while the dividend payment remains suspended.
More favourably, growth in market share for both the UK & Ireland and the Nordics helped increase adjusted profits for each. A store portfolio offers consumers the opportunity to test products and lean on the knowledge of staff before buying. Costs remain a focus, new AI aided products may support a wave of product upgrades, while net cash held should underpin the eventual resumption of a dividend payment.
For now, given the company has already rejected takeover approaches, and with a consensus analyst fair value estimate in excess of 110p per share, fans of this electricals retailer are likely to be encouraged.
Positives
- Store and online buying channels
- Net cash held
Negatives
- Tough economic backdrop
- Suspended dividend payment
The average rating of stock market analysts:
Buy
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