Currys axes dividend as full-year profits slump
Profits fell by 38% as the group was hit by ‘depressed demand, high inflation and unforgiving competition’
Currys has scrapped its dividend after revealing both profits and sales fell in its full-year results, with the group hit by “depressed demand, high inflation and unforgiving competition”.
In the full-year ended 29 April, adjusted profit before tax plunged 38% to £119m, down from £192m the prior year, in part due to lower Nordic profits over the period. This was in the top end of guidance however, according to the group.
The electronic retailer also reported a statutory pre-tax loss of £450m, which was largely driven by a £511m non-cash impairment of UK&I goodwill relating to the Dixons Carphone merger in 2014.
Meanwhile, group sales fell by 7% to £9.5bn, with a decline in all markets except Greece, driven by a fall in consumer spending due to “persistent” inflation and rising interest rates, as well as a normalisation of spend on technology after a boost in spending during the pandemic.
In the UK&I region, adjusted EBIT rose by 45% year-on-year, as improvements to gross margin and cost savings helped offset a fall in sales. According to the group, operating costs fell in absolute terms as savings “more than offset” inflationary cost pressures and increased business rates tax.
Looking ahead, the group warned the economic outlook remains uncertain in its main markets, and in light of this said it has taken actions to maximise operating cashflow, deliver cost savings and reduce capital expenditure, as well as axe its dividend.
CEO Alex Baldock said: “We’ve had a very mixed year. Our strengthening UK&I performance shows our strategy is working well. But our long track record of success in the Nordics was brought to an abrupt halt. Our market has been tough everywhere, with depressed demand, high inflation and unforgiving competition.
“Our UK&I colleagues’ great work shone through in world class engagement scores; in another year of record customer satisfaction; in maintaining number one market share; and in more customers for life as we grew services. All this was reflected in another year of growing UK&I profits, with improving gross margins and continued cost discipline.”
He added: “Looking ahead, we’re wary of optimism about consumer spending power. Accordingly, we’re being prudent in our planning, and in further strengthening our balance sheet. Our focus is on continuing a very encouraging trajectory in the UK&I while we get the Nordics back on track, and being attentive to mitigating any downside risk.
“We may be cautious in our promises for the short-term, but our confidence is undimmed as we build a stronger and more resilient business that is fit to prosper in the longer term.”
