Currys PLC cuts FY profit guidance as UK tech market falls 10%
The retailer trimmed its forecast for adjusted pre-tax profits for the year to end-April to £155mln from £160mln
Currys PLC (LSE:CURY) downgraded its profit expectations for the current year after revenue fell over the peak Christmas trading period, impacted by a drop in demand and supply chain disruption.
The retailer now expects adjusted pre-tax profits of £155mln for the year to end-April, down from the £160mln it forecast when it announced its interims.
“The technology market was challenging this Christmas, with uneven customer demand and supply disruption,” said Currys chief executive Alex Baldock, noting the overall UK tech market declined 10% compared to last year’s peak trading period.
On a more upbeat note, he said Currys “gained market share, improved customer satisfaction, traded profitably, and can look ahead with confidence”.
In the 10-week period to 8 January 2022, like-for-like sales fell 5% year-on-year, although they were 4% higher than the same period two years ago, before the Coronavirus (COVID-19) pandemic.
Year-to-date like-for-like revenue was 3% lower than last year, but grew 11% on two years ago.
In the UK and Ireland, peak like-for-like revenue dropped 6% year-on-year, with sales of electrical products down 7%, although these were 3% higher than the pre-pandemic two-years-ago period.
Baldcock said customer demand for some tech, notably gaming products, was strong.
“This was a gamers’ Christmas, the year that virtual reality broke into the mainstream, and when consoles flew off the shelves. Oculus Quest 2 and PS5 were stars,” he said.
Appliances also enjoyed strong sales, as consumers continued to kit out their homes, he added.
Online sales grew 29% in the UK and Ireland compared with the period before COVID-19, while international online sales soared 79%.
Currys said it continues to face uncertain demand and supply chain disruption and that availability remains challenged in some areas.
The company forecast capital expenditure of around £170mln for the current year. It expects net exceptional cash costs of £50mln, down from £70mln predicted previously.
It expects to finish the year with at least £100mln of net cash.
The company also announced its previously announced £75mln share buyback programme starts today.
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