Currys shares surge after profit upgrade

(Sharecast News) - Shares in Currys surged on Thursday as the electrical retailer lifted annual earnings guidance after "robust" trading since the start of the year, including a return to growth at its troubled Nordics division.

Group adjusted profit before tax is now expected to be around £160m, compared to previous guidance of £145-155m, Currys said with less than five weeks of the financial year remaining, adding that like-for-like sales growth in the UK & Ireland and the Nordics continued to be positive.

The group also expects to finish the year in a strong net cash position. Currys shares were up more than 16% in London trade.

Analysts at Shore Capital said the Nordic market had been a "drag on group sales for the past three years, so it is highly encouraging to see this region return to growth".

"The share price looks undemanding to us, if Currys can continue to deliver on LFL growth across its markets then we would expect a re-rating of the stock."

AJ Bell investment director Russ Mould said: "Currys is one of the last remaining electronics retailers with a physical presence on the high street and it is making a virtue of this status by offering handholding when people are buying increasingly complex consumer technology."

"It also offers a full range of services from credit to delivery, installation, repairs and recycling, and these help it to stand out from the crowd.

"A notable feature of Currys' recent performance is the strong cash flow which puts the company in an enviable position relative to other retailers. It potentially allows Currys to go from being prey to predator in the sector, should it spy the right opportunity."

Reporting by Frank Prenesti for Sharecast.com