Currys shares were spreading festive cheer on Thursday as the retailer said trading was in line with expectations and was strengthening their balance sheet by selling its Greek business.
In addition, cash generated from operations rose to £172m in the half-year period to 28th October, which helped to dramatically reduce free cash outflow down to £10m from £86m.
Currys shares were 10.9% higher at the time of writing on Thursday.
There were like-for-like sales delines across their geographies, but the company said they were committed to bolstering the top line and growing margin in the coming period.
The Nordics reported sales fell 12% in the period, and the company has earmarked the segment for special attention going forward.
“Our priorities this year are simple: to get the Nordics back on track, to keep up the UK&I’s encouraging momentum, while strengthening our balance sheet and liquidity. We’re making good progress on all these in a still challenging economic environment,” said Alex Baldock, Group Chief Executive of Currys.
“In the Nordics, our trusted brands have delivered substantial gross margin gains, which combined with strong cost discipline have resulted in significantly improved profits. There’s still a long way back to healthy Nordics performance, but we’re on the way.
“In the UK&I, profits are in line with expectations, as we focus on more profitable sales and growing the services that drive margins and customer lifetime value. Credit, Care & Repair and iD Mobile are all performing strongly, while colleague engagement and customer satisfaction continue to rise.
Analysts were positive on today’s update from Currys. There is the recognition of the macro challenges for a company selling expensive discretionary goods in a cost-of-living crisis and Currys’ progress despite clear headwinds.
“It was a good day to release positive news with the market in such a buoyant mood and today’s announcement from Currys, while not unblemished, certainly represented progress from the electronics retailer,” said Russ Mould, investment director at AJ Bell.
“For more than a year Currys has been a tale of Nordic noir as its previously reliable Scandinavian business has been beset by competitive pressures. Margins for this region being back at their level from two years ago will reassure shareholders that Currys is starting to put its problems behind it.
“Revenue is under pressure across the board, and the company chalked up a first-half loss, but it is telling it felt confident enough to stick with full-year guidance – hinting the Christmas trading period must be off to a solid enough start.
“There may be no return to the lockdown period when people had the means and motivation to snap up new electronic goods but Currys will hope as pressures on household budgets start to ease, appetite for buying larger ticket items will return.”
