Currys HY losses narrow as it warns of price rises
Despite this, the group expects its profit and loss to benefit from lower interest costs, and is continuing to target at least 3% adjusted EBIT margin
Currys has posted a loss before tax of £10m for the half year ended 26 October 2024, up from £44m in the same period last year.
Alongside this, the company posted a revenue of £3.9bn, up 1% year-on-year and driven by a like-for-like revenue increase of 2%.
As part of this, the company’s UK and Ireland like-for-like revenue increased by 5%, with an adjusted EBIT of £23m.
Currys stated that strong sales and improved gross margin more than offset both investment and inflationary cost increases.
The company’s like-for-like revenue in the Nordics fell 2%, but it posted an adjusted EBIT of £18m in the region, an increase of 50% year-on-year.
Currys also stated that it currently has 75% of the market share in the UK on AI laptops.
Looking ahead, the company has calculated that the budget, which includes changes to National Insurance and National Living Wage, will increase its costs by £32m.
As a result of this, the company has claimed that some price rises are “inevitable”.
Despite this, the group expects its profit and loss to benefit from lower interest costs, and is continuing to target at least 3% adjusted EBIT margin.
Alex Baldock, CEO, 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.”
He added: “We were well prepared for our Peak trading period, with healthy stock and market-beating, best-ever deals that show our unmatched importance to suppliers. We’re trading in line with expectations. One highlight is rising demand for AI laptops, where we enjoy over 75% market share in the UK. AI is a trend with a lot further to run.
“Looking ahead, we’re confident of continuing our progress, and expect to grow profits and cashflow as promised this year. This is despite new and unwelcome headwinds from UK government policy. These will add cost quickly and materially, depress investment and hiring, boost automation and offshoring, and make some price rises inevitable.”
