Currys could resume payments to investors next year

Currys announced it could restart donations to shareholders in the next 12 months after it returned to profit last year.

The high street retailer cut its final dividend in 2023 after reporting a pre-tax loss of £450m which it attributed to weak demand, cost of living pressures and “relentless competition”.

But while trading conditions have remained difficult, the company recovered to make a pre-tax profit of £28m in the year to April.

Profits were boosted by massive cost reductions in its supply chain and services operations, a focus on more profitable sales in the UK and gross margins that more than doubled in its Nordic business.

On an adjusted basis, Currys’ profits rose 10 per cent to £118m, in line with previously raised guidance of £115m to £120m.

This was despite group revenues falling 4 per cent to £8.5 billion as lower purchases of computers and consumer electronics offset strong demand for mobile products and services.

Turnover in the British Isles, which fell by almost £100m to around £5bn, was also affected by lower sales of large household appliances.

However, Currys significantly improved its balance sheet during the period, partly by selling its Greek division, Kotsovolos, for £175 million to Public Power Corporation, Greece’s largest electricity supplier.

As a result, it ended the year with £96m in net cash, an improvement of £193m on April 2023, and reduced its pension deficit from £249m to £171m.

Currys said this “represents a healthy position from which the company can pay required pension contributions, invest in future success and return cash to shareholders.”

He added that as long as operations are in line with forecasts, which he has during the “first part” of this fiscal year, he intends to restart investor profitability “over the next twelve months.”

The FTSE 250 firm expects higher profits and free cash flow this year, supported by growth in high-margin recurring revenue services and iD Mobile subscriber levels reaching 2 million.

curry stocks They fell 6 per cent to 72.4p on Thursday morning, but have still risen since the start of the year by around 43 per cent.

The company’s share price soared in February after investment giant Elliott Advisors, owner of the Waterstones bookstore chain, tried unsuccessfully to acquire Currys.

Elliott refused to make a higher offer after Currys rejected two proposals valuing it at around £682m and £750m respectively due to its price tag.

Chinese online retailer JD.com also considered making a bid for the group but rejected it, ending speculation of a bidding war.

Mark Crouch, analyst at eToro, commented: ‘Shareholders will take confidence from the fact that not only do the companies see value in the business, but, perhaps boldly, the Currys board felt confident enough to reject the offer for flat.

“However, fierce competition from online retailers remains a significant threat, which may require a change in strategy if Currys is to outperform its rivals in the long term.”