Currys UK and Ireland delivered better than expected profits over Christmas to offset struggling international business.
The group’s like for like sales slumped 6% in the 10 weeks to 7 January as UK and Ireland sales dipped 5%. However, it achieved stronger profits than expected thanks to a gross margin increase and cost cutting.
International like-for-likes fell 7% and plummeted 10% in the Nordics as it continues to be hit by aggressive growth strategies from European rivals.
Profits were below forecast in the market as margins came under pressure.
Despite the further deterioration in its internation business, Currys said it remained confident of hitting its full-year profit guidance of £100m to £125m.
Currys slashes profit outlook as ‘hard-pressed’ customers cut back
Shares in the technology retailer were down more than 7% on Thursday after it said it has had a tough time over the past six months. fall in sales within its UK and Ireland division, on the other hand, was offset by cost-cutting and higher gross marginsCurrys said it now expected full year profit before tax to be between £100m-£125m – down from the previously guided £130m-£150m range.
Currys’ chief executive has said Amazon is getting a “free ride” from UK retailers by using the country’s infrastructure while swerving taxes.
Alex Baldock, the boss of the high street electronics retailer told the BBC’s Sunday with Laura Kuenssberg show Amazon “appear[s] to play by different rules than those of us who actually pay some tax”.
The online giant has been accused of reducing its UK tax bills by sticking to a primarily digital footprint although it does pay tax on distribution warehouses.
Amazon’s UK tax bill could rise by £29m next year following the changes to business rates introduced in the autumn statement that will hit those that operate warehouses.
Currys plc, the well-known electrical retailer in the UK, is using Emplifi Live Advisor to deliver live customer care on demand. Through Emplifi’s leading Live Advisor solution, which came through the acquisition of Go Instore in September 2021, Currys customers can connect to product experts not only for live demos and consultations, but also for post-purchase care.As the UK’s largest tech retailer, their mission is to help customers enjoy amazing technology. This means not only helping our customers choose shiny new kit, but also making sure they get the most out of it. We know that our customers find new tech exciting but also often confusing and need help when things don’t go to plan. Our new RepairLive service provides customers with expert advice to help them to identify the cause of a fault, undertake DIY fixes, as well as to assist with arranging a repair or return of their product,” said Gillian Geraghty, Ecommerce and Omnichannel Director. “By leveraging the LiveAdvisor technology for RepairLive, we’re able to provide our customers with access to fast, efficient support without them or their tech having to leave the house.”
Currys launches RepairLive, an on demand speedy repair service, available via video call
Experts from the largest electronics service centre in Europe on hand to help customers identify the cause of a fault, undertake DIY fixes and assist with arranging a repair
Service launches on laptop category and has been proven to reduce unnecessary repairs and returns, making it easier and quicker to get a customer’s kit back up and running
RepairLive is set to quickly scale to other categories, including TVs and Major Domestic Appliances
Builds on strengths of Currys’ popular and industry leading ShopLive video call service
Move further cements Currys’ position as the market leader in the retailing of technology Services
Mindtree announced that it has enabled the UK’s leading retailer of technology products and services, Currys, to deliver a connected and highly personalised omnichannel shopping experience to its customers across multiple markets.
As part of the multi-year engagement, Mindtree has leveraged its extensive retail and digital expertise to design and implement a comprehensive omnichannel solution that provides a unified customer experience across rapidly converging online, mobile, and in-store shopping, while driving cross-channel fulfilment and inventory optimization for Currys. Through unified consoles, Mindtree has also empowered Currys’ more than 32,000 colleagues spread across the company’s retail stores, offices, contact centres, supply chain, and distribution centres to better support the omnichannel customer journey with enhanced speed and quality of service.
The solution, built using state-of-the-art Salesforce and Mulesoft technologies, has helped Currys become more data-driven. This supports its strategy to build customers for life by getting to know its customers better and driving meaningful engagement with them, while also making it easier for those customers to shop with Currys, thus maximizing cross-sell and upsell opportunities and post-sales lead generation. Mindtree and Currys are continuing to collaborate on further innovations in mnichannel retail to enhance productivity and flexibility.
Currys has posted an increase in full-year earnings but cautioned that “the outlook for consumer spending is uncertain” as the cost-of-living crisis mounts.
The electricals giant registered a 19% uplift in adjusted pre-tax profit to £186m in the year to April 30. Adjusted EBIT climbed 5% to £274m in what it called “a year of significant change, uncertainty and disruption”.
Currys’ core UK and Ireland business delivered a 21% improvement in adjusted EBIT to £111m, while earnings from its international operations contracted 4% to £163mAlex Baldock, Group Chief Executive
“These strong results show the vital role that technology plays in millions of lives, and that more and more
customers are turning to Currys to help them enjoy that technology to the full.
We owe this performance to our thousands of capable and committed colleagues, who’ve built a stronger Currys.
They’ve loved seeing customers returning to our stores in droves, and helping them with face-to-face expert advice
and the full range of our services that ensure customers stick with us. Stores, in tandem with online, give our
customers the omnichannel best of both worlds they clearly prefer.
A stronger business allows us to help customers through the cost of living crisis. Our well-established price promise
means customers “won’t get it cheaper. Full stop” on all products and today we’re going even further with “2021
Price Lock”, our new price freeze on dozens of great products. We’re investing in our energy-efficient “Go Greener”
range. We’re doing more to help customers spread the cost, announcing “12 month Pay Delay” on every purchase
over £99. And we’re doubling down on giving longer life to the technology customers already have; as leaders in
protection, repair, trade-in and recycling, we’re uniquely placed to do so.
Our scale as an international market leader, our grip on costs and our strong relationships with suppliers will allow
us to manage inflationary headwinds and keep amazing technology within reach of everyone, even now. That’s
what Currys exists to do, and it’s never mattered more.”
Strong operational and financial performance; adjusted EBIT margins improved to 2.7% (2020/21: 2.5%)
Record highs in colleague engagement and customer satisfaction
Group store sales up +24% (UK&I +61%), higher than expected as customers rediscovered the benefits of stores
International: Generated 46% of sales and 59% of adjusted profits; entered new market with two stores in Cyprus
UK&I: Returned to market share growth; sustainable in-year cost savings of £69m
Repaired over 1.7m pieces of tech during the year
Ended year with good availability and prudent stock levels
Group LFL (3)% (Yo2Y +10%); Revenue (2)% (Yo2Y flat)
Group adjusted PBT £186m included a level of unexpected network debtor revaluations and settlements (2020/21:
Group Profit before tax £126m (2020/21: £33m)
Free cash flow £72m inc £(88)m working capital outflow (2020/21: £438m inc £454m working capital inflow)
Year-end net cash £44m (2020/21: £169m) with average net cash £290m, compared to average borrowings of over
£350m two years ago
IAS 19 Pension liability reduced to £(257)m (2020/21: £(482)m)
£78m returned to shareholders in dividends and buybacks, proposed final dividend of 2.15p to take full year
dividend to 3.15p, +5% YoY and remainder of buyback to be executed
All figures are year-on-year unless stated. There are a number of non-GAAP measures and alternative profit measures “APMs” discussed within this announcement.
Adjusted results are consistent with how business performance is measured internally and presented to aid comparability of performance. Refer to the glossary and
definitions section set out at the end of this report for further details on definition, purpose, and reconciliation to nearest statutory measure
Shares in the FTSE 250 Currys the electronics retailer jumped 8 per cent, or 7.45p, to 100.3p after financial news blog Betaville suggested a mystery buyer, possibly private equity, was circling the group.Currys shares have fallen by around a third over the last 12 months, meaning the firm could potentially be eyed as a cut-price acquisition opportunity.
Electricals retailer Currys has edged down its full year profit guidance after what it called a “challenging” technology market at Christmas with uneven customer demand and supply disruption.
The group, which trades from more than 800 stores in seven countries and online, said it expected to deliver a full-year 2021-22 adjusted pretax profit of around £155 million, versus last month’s guidance of about £160 million and £156 million made in 2020-21.
Currys said like-for-like revenue fell 5% in the 10 weeks to Jan. 8 year-on-year, but was up 4% against the same period in 2019-20, before the pandemic impacted trading.
Currys Plc announced new rapid delivery via Uber a three month trial in London starts November 16th