Currys hails 'strong' start to year, launches £50m share buyback

(Sharecast News) - Electricals retailer Currys hailed a "strong" start to the year on Thursday, as it launched a £50m share buyback and reported a 3% jump in group sales in the 17 weeks to 30 August. Like-for-like revenue in the UK & Ireland ticked up 3%. Currys said "robust" sales were driven by market share gains, with double-digit growth in new categories and B2B.

It pointed to strong sales in gaming, AI computing, large appliances, coffee machines and cooling products, offset by declines in TVs, tablets and air fryers.

Meanwhile, Nordics LFL revenue was 2% higher during the period, driven by AI computing and success in new categories such as robotic lawnmowers and vacuums.

Currys also announced the immediate launch of a new £50m share buyback programme.

Chief executive Alex Baldock said: "It's been a good start to the year, with encouraging performance across the group. In the UK&I we're pleased with the trajectory in our growth areas of new categories, B2B and the Services that are so valuable to customers and to Currys. Credit was notably strong, and iD Mobile is on track to beat the 2.5m subscriber target we set for this year.

"Our Nordics recovery continues to pick up pace. We continue to grow, improve margins and control costs well. We're confident that profit margins will step forward again this year."

At 0940 BST, the shares were 17% higher at 127.60p.

Russ Mould, investment director at AJ Bell, said: "Electronics retailer Currys continues to shine as it defies the wider gloom on the high street. It is benefiting from its position as one of the few surviving specialist retailers of electronic goods with a physical presence.

"Currys has leaned into this status, looking to provide customers with support and guidance and help them navigate a fast-changing world of consumer technology. In effect, it is providing people with limited tech expertise with something they can't get elsewhere when they are purchasing a new TV or laptop.

"Currys aims to provide customer support through the full lifecycle of a product from purchase, credit and installation to repairs and recycling, thereby potentially generating regular revenue from the sale of a single product.

"This strategy has helped support robust trading against a difficult backdrop as the company enjoys market share gains in its UK and Nordics business and expands in the business-to-business category.

"It has also helped Currys offset the inflationary pressures associated with changes to the national living wage and employer National Insurance contributions introduced in the UK this year.

"A major bonus in its latest announcement is that the company has concluded a review of its pension scheme much earlier than anticipated and on better-than-expected terms. This is freeing up a significant amount of cash flow and has enabled the company to unveil a chunky share buyback.

"Management's decision to hold firm in the face of a £700 million bid from US suitor Elliott 18 months ago looks more and more sound, with the company now valued by the market at more than double that sum."