14th May 2024 15:49
(Alliance News) - Currys PLC impressed the market again with a strong trading report on Tuesday, as sentiment towards the stock continues to climb in the wake of the electricals retailer waving away bid interest.
The electricals retailer raised full-year profit guidance after a reporting like-for-like sales returned to growth in the 16 weeks to April 27.
Currys expects full-year adjusted pretax profit will be GBP115 million to GBP120 million, up from guidance of at least GBP105 million before.
Chief Executive Alex Baldock said: "Our performance is strengthening, with good momentum in the UK&I, and with the Nordics getting back on track. Sales are now growing again, margins are benefiting from higher customer adoption of solutions and services, and cost discipline is good. All this means improved profits and, with our strong cash position, we're well set up for the year ahead."
Currys said group like-for-like sales were up 2% in the 16 weeks since the peak Christmas period.
However, for the year as a whole, group like-for-like sales were down 2%.
In UK and Ireland like-for-like sales were declined 2%, meanwhile the Nordics fell 3%.
Analysts at Liberum noted this was the "third consecutive upgrade year-to-date and means cumulative upgrades of around 24%."
"The current valuation remains far too cheap, giving no credit for any further earnings upside even as momentum now turns positive and ahead of macro signs improving," Liberum added.
In March, Elliott Advisors UK said it did not intend to make a bid for Currys after having a 67 per share proposal rejected. JD.com, another potential bidder for Currys, also said it would not be making a bid.
AJ Bell analyst Russ Mould commented: "Rejecting a takeover bid comes with its own pressure so the fact Currys has upgraded profit guidance in the wake of batting off foreign interest is helpful to management's credibility. Significantly, the shares are now trading above recent suitor Elliott's top bid. The company is showing real signs of recovery – the recent momentum in its UK and Ireland business now finally being matched by the Nordics which are getting back on track under a new leadership team."
Currys shares traded 7.9% higher at 70.50 pence each in London on Tuesday afternoon.
By Eric Cunha, Alliance News news editor
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