Currys shares were well bid on Thursday after the retailer announced a sharp increase in profits and market share. The UK and Ireland were the bright spots as group revenue increased 2%.
The electronics retailer achieved a group-wide adjusted EBIT of £41 million, representing a 52% increase year-on-year, while free cash flow improved substantially to £50 million, up £46 million from the previous year.
In the UK and Ireland, the company demonstrated robust growth with revenue increasing by 6%, supported by market share gains and successful strategic initiatives. A particular highlight was the performance of its mobile division, with iD Mobile subscribers growing by 32% to reach 2.0 million customers.
“Compared to recent history, Currys had an electric start to the year, with both first-half revenue and profit moving higher. While 2% revenue growth isn’t breakneck speed by any stretch, declines in the Nordics mask 6% growth in the UK and Ireland, as both Online and Store channels charged higher,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“The positive momentum and continued recovery indicate a potential easing market headwinds and there’s now cautious optimism for the future.
“Market share gains in both major regions are to be applauded. The focus on margins is beginning to bear fruit, with profits jumping higher, albeit from a very low base. Services like device repair, insurance and cloud backup have been a major help on this front as they’re typically higher-margin activities. They also bring a little more revenue visibility to a business model that remains at the mercy of ups and downs in consumer sentiment and one-off purchases of big-ticket items like laptops, TV’s and white goods.”
Currys shares were 9% higher at the time of writing.