After the takeover saga around Currys came to a close in 2024 we flagged that the electronics retailer was too cheap and had recovery potential.
WHAT’S HAPPENED SINCE WE SAID TO BUY?
Our hypothesis has proved sound, the shares making substantial progress supported by consistently strong trading, with the latest example occurring over Christmas, allowing Currys to deliver another full-year profit upgrade. A strong festive period reflected in like-for-like sales growth in both the UK and Nordics.
Due to a technology replacement cycle driving consumer demand for new AI-enabled computers, Currys announced plans to reinstate the dividend based on strengthening cash generation and an improved balance sheet.
The FTSE 250 retailer last declared a dividend alongside its first-half results in December 2022 but then paused the payout due to struggles in the Nordics, inflationary pressures and a decision to exit the Greek market.
For the 10 weeks ended 4 January 2025, Currys’ UK & Ireland like-for-like sales increased by 2%, with mobile, gaming and premium computing offsetting weaker TV sales, while in the Nordics like-for-like sales increased by 1% with the Elkjop chain gaining market share in a challenging environment.
Following strong sales over the festive period, Currys now projects adjusted pre-tax profit of £145 million to £155 million for the fiscal year ending April 2025.
This forecast tops the consensus estimate of £140 million, even after accounting for increased costs from the UK Budget, and investors can anticipate a final dividend of around 1.3p per share to be announced with the full-year results in July.
WHAT SHOULD INVESTORS DO NOW?
The shares still do not look particularly expensive at 9.1 times April 2026 consensus forecast earnings per share.
While the UK backdrop is uncertain, Currys has carved out a niche for itself as one of the few remaining places to buy electricals on the high street.
With many shoppers looking for a bit of handholding as they get used to new consumer technologies, we think this gives the company a clear competitive advantage so keep buying.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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