Following the release of Currys’ figures for the year ending 27th April 2024; Oliver Maddison, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Whilst the waters of the electricals market have been choppy, the tide is starting to settle and rise, bringing Currys with it. Its 2% decline in like-for-like (l-f-l) group sales for the full year masks a positive trend since early January where sales increased by 2% in both the Nordics and the UK and Ireland, which tracks with the group upgrading its full year profit before tax guidance to £115-120m from £105. This largely reflects a broader improvement in the fortunes of the wider UK electricals sector as consumer confidence has improved and consumers’ wages have started to outpace inflation. Whilst rival electricals specialist, AO also saw growth in its Q4, it lost ground to Currys in its full year to 31 March, with an 8.0% decline in sales. Currys’ omnichannel proposition enables a more comprehensive customer experience that has appealed to consumers who are willing to spend on electricals, with its wider service offering giving it a further competitive edge.
“With the worst of the period of high inflation now in the rearview mirror, consumer confidence in the UK and Ireland has grown, reflected by the fact that Currys’ 2% fall in full year l-f-l sales was largely frontloaded, as post-peak trading saw l-f-l growth of 2%. Currys’ Nordics division saw l-f-l sales fall by 3% for the full year, and experienced a similar upward trend to that of the UK and Ireland, seeing l-f-l growth of 2% in the post-peak period, albeit against weak comparatives. The group’s focus on profitable sales proved highly beneficial for Elkjøp, with EBIT expected to more than double, which will put the Nordic division in good stead for future growth. The sale of its Greek arm, Kotsovolos, completed on 10 April netted the group £156m, which was primarily put towards reducing the group’s net debt burden, with the group expecting a year-end cash position of £95m.
“Alongside the group’s strategic prioritisation of profitable sales, margins have been improved through cost control and higher consumer uptake of its services. The exit from the Greek market will have also allowed Currys to focus its efforts on improving its prospects especially in the Nordics, which should create greater gains in the long term. Currys will see its improving fortunes as validation of its decision to aim higher than the £750m purchase offering made by Elliott Investors, as well as competing interest from JD.com which shareholders saw as an undervaluation of the business. Nonetheless, the desire to realise shareholder value has caused JO Hambro, a 4.5% shareholder, to pressure for the sale of iD Mobile, which has gained value precisely because of consumers’ greater uptake of Currys’ affordable and cost-saving services, such as its extended warranty. The decision over whether to sell one of the fastest-growing parts of its business could prove contentious.”
