12th Dec 2024 09:29
(Alliance News) - Currys PLC shares surged on Thursday as it said its performance "continues to strengthen" but criticised "unwelcome headwinds from UK government policy" which will add GBP32 million in extra costs per year.
Shares in Currys were up 11% to 87.35 pence in London on Thursday morning.
The London-based electronics retailer said revenue increased by 1.3% in the six months to October 26 to GBP3.92 billion from GBP3.87 billion year-on-year.
Its pretax loss narrowed to GBP10 million from GBP44 million in the prior year.
The company also swung to an adjusted pretax profit of GBP9 million from a GBP16 million loss.
Currys said trading since the end of the period had been consistent with its expectations, and it is well prepared for the peak trading period with artificial intelligence products proving popular.
It also said its full-year guidance is unchanged, despite GBP32 million of increased costs due to recent UK government policy changes.
Currys said it will face a GBP12 million increase in national insurance contributions and a GBP9 million growth in wage costs due to national living wage increases.
It said GBP9 million will be passed through from partner businesses with an additional GBP2 million from the increase in business rate taxes.
Currys said around half of these increases were anticipated, and it will seek to mitigate the remaining impacts with savings and price rises.
On the "unwelcome" increased costs, Chief Executive Alex Baldock said: "These will add cost quickly and materially, depress investment and hiring, boost automation and offshoring, and make some price rises inevitable."
Currys said its adjusted free cash flow multiplied to GBP50 million from GBP4 million.
Baldock said: "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."
"In the UK&I, we made big improvements to both Online and Stores channels, customers continued to take more of the solutions and services that are valuable to them and to us, and such growth drivers as B2B and iD Mobile performed well. All this showed in growing sales, market share, gross margins and profits. In the Nordics, we gained market share, increased gross margins, tightly controlled costs and grew profits in a still-tough consumer environment."
By Michael Hennessey, Alliance News reporter
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