Earlier this year, the British electronics retailer, Currys, declined a takeover proposition. Now, following a resurge in sales growth, it is raising its yearly profit forecast by approximately 10 per cent, resulting in a surge in its share value. The shares went up by 9 per cent, peaking at 71 pence, the highest they’ve been since March of 2023. These numbers come after Currys turned down an acquisition bid from US-based Elliot Advisors, who proposed a 67 pence per share price, arguing it undersold Currys’ potential for growth.
Previously, Currys had attracted the attention of JD.com, a Chinese internet retailer, who expressed their interest in the company. However, they opted not to put forth an offer for the group in March. Analysts from Liberum praised Currys for their astute attention to expenditures, noting it puts them ahead in comparison to their competitors.
Currys’ current valuation is remarkably cheap, provides no recognition for additional earnings growth, while momentum is shifting positively and ahead of noticeable economic improvements, according to Liberum analysts.
The retailer reported an increase of 2 per cent in underlying sales in the first four months of the year, pushed by consumer demand for fridges, washing machines, and computers in its UK, Ireland, and Nordic region markets. This improvement contrasted with the decline in sales observed during the previous year’s Christmas season.
As a result of the upturn, Currys anticipates the year’s pre-tax profits (up till end of April) to reach up to £120 million, a noteworthy increase from the prior estimation of £105 million.
Alex Baldock, Currys’ CEO, highlighted the company’s benefits from the resurgence in sales, improved profit margins due to increased customer acceptances of solutions and services, and strong fiscal discipline. Via their updated projections, Currys is poised to match last year’s profit results, not even factoring the additional revenue from its Greece operation, which was sold earlier this year.