Electrical goods retailer Currys (CURY) (formerly Dixons Carphone) gained 5% to 128.2p as it unveiled a £75 million share buyback programme off the back of a robust sales performance and positive outlook
Sales for the six months to 30 October fell on the same period a year ago, as the impact of lockdown and people buying computers for home working and gaming eased, but were up 15% compared to two years ago. An expected decline in mobile sales contributed to the year-on-year decline.
Looking ahead to the key Christmas period, the group said it expected to deliver a ‘robust peak trading season’, having managed to mitigate supply chain and staffing issues.
‘We are on track to meet consensus expectations for full year 2021/22 pre-tax profit of £161 million,' it added.
For the full year 2021/22, the company expected to spend around £170 million, down from previous guidance for £190 million. The company also stuck with medium-term targets for a 4% EBIT (earnings before interest and tax) margin and more than £1 billion in cumulative free cash flow by 2023/24. By that year Currys expects to be generating more than £250 million of annual sustainable free cash flow.
MANAGING SUPPLY CHAIN ISSUES SUCCESSFULLY
The group is scheduled to publish its first half results in full on 15 December 2021.
AJ Bell investment director Russ Mould commented: ‘Currys’ ability to look forward with confidence to the peak Christmas trading season is testament to its ability to manage supply chain challenges and labour shortages.
‘And it doesn’t look like margins are taking too big of a hit either, judging by the company’s decision to stick with its full year profit guidance.
‘There are two other big challenges facing the business though. One is that demand for computer equipment from people working from home for the first time and those who got seriously into their gaming during lockdown will gradually evaporate as we return to a ‘new normal’.
‘The other is that consumers are set to start feeling the pinch in a bigger way as the cost of energy, food, fuel and mortgages goes up.’
