Currys sees more profit growth as AI gadgets arrive

Electricals retailer Currys, a takeover target earlier this year, forecast AI-powered gadgets would help to deliver another year of profit growth after a 10 per cent rise in 2023-2024 that reflected a steady improvement in trading.

The group, which sells fridges, washing machines, tumble driers, televisions, computers and other consumer electricals, said trading in the early part of its new financial year had been in line with its expectations.

Currys has 16 stores in the Republic.

“We’re planning prudently but confidently for the year ahead, on course to grow both profits and cash flow while carefully stepping back up to more normal investment levels,” chief executive Alex Baldock said.

He said AI-powered technology was “the most exciting new product cycle since the tablet in 2010″ and Currys was “best-placed to benefit”.

Currys made an adjusted profit before tax of £118 million (€139 million) in the year to April 27th – in line with guidance upgraded last month and up from £107 million made in 2022-23.

That was achieved despite a 4 per cent fall in revenue to £8.48 billion, with like-for-like sales down 2 per cent in the UK and Ireland division and down 3 per cent in the Nordics, but improving through the year.

Gross margin was up in both divisions, offsetting the sales decline.

The UK was held back by weakness in demand for discretionary items due to high inflation and rising interest rates.

Average UK wages are, however, now rising more quickly than inflation and consumer sentiment in June recovered to its highest since November 2021 according to Britain’s longest-running consumer confidence survey published last week.

Currys shares, 11 per cent of which are owned by Mike Ashley’s Frasers Group, are up 44 per cent year on year.

Earlier this year, Currys saw off bid interest from US investor Elliott Advisors and China-based online retailer JD.com. Both had been attracted by Currys’ extensive distribution network.

In April, Currys completed the disposal of its Greek business, making proceeds of £156 million.

On Wednesday, rival AO World also said it was confident of profit growth in its current financial year. – Reuters

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