By Editor Jane Denton
Currys saw its net cash stash rise to the highest level in a decade last year, as the group’s turnaround strategy drove higher sales and profits.
The electronics retailer said it was cutting costs, automating more systems and dishing out more work offshore in a bid to offset millions of pounds worth of cost hikes triggered by Rachel Reeves’ Autumn Budget last year.
Free cash flow, the difference between a firm’s total inflows and outflows, reached £184million in the year ending 3 May.
Currys posted an adjusted pre-tax profit of £162million, up 37 per cent year-on-year.
Revenue across the UK and Ireland rose 6 per cent to £5.3billion, while remaining largely flat in the Nordics.
Currys said its revenue was bolstered by market share gains and ‘strategic initiatives’, including its services arm, credit sales and iD mobile subscriptions.
Currys shares were up 6.5 per cent or 7.70p to 126.20p on Thursday, having risen nearly 70 per cent in the last year.
The retailer enjoyed growth across all divisions with services revenue and credit sales up 12 and 14 per cent respectively.
Subscribers to iD Mobile, Currys’ mobile virtual network operator, soared 26 per cent to over two million.
Alex Baldock, chief executive of Currys, said: ‘Currys’ performance continues to strengthen and the business has real momentum.
‘A stronger Currys is good for colleagues, customers, shareholders and society, and we’re doing a better job for all of them.’
Total UK and Ireland sales rose 6 per cent, driven by like-for-like sales growth of 4 per cent. The group saw both in-store and online sales rise.
The retailer had raised its annual profit target three times this year, supported by robust demand for its mobile, gaming and premium computing in the UK and Ireland.
Curry said it remained focused on controlling costs.
It said: ‘We will continue to face cost headwinds in the UK&I in the coming year, including an additional £32million of annual costs from the UK government’s Autumn 2024 budget.
‘To mitigate this impact we are underway with removing central costs, and continuing to automate and offshore activities.’
In January, Currys said it would ramp up automation and move more business processes to cheaper overseas locations, in addition to price hikes, to mitigate costs.
The group said early trading in the current financial year had been in line with expectations and that it remained confident for the year ahead.
Currys has also began to establish a B2B team as it looks to cater to small-to-medium sized businesses.
A final payout of 1.5p per share was proposed for investors as Currys resumed its dividend.
Zoe Gillespie, wealth manager at RBC Brewin Dolphin, said: ‘Currys demonstrates what retail can be when you combine digital and bricks and mortar in the right way.
‘The group’s turnaround in recent years has been underpinned by delivering amazing customer experience, social media engagement, and being associated with the latest technologies.
‘The results of that strategy can be seen today, with the strongest balance sheet in more than a decade, profits up 37 per cent, and the resumption of the dividend – all while customer satisfaction continues to rise.
‘Of course, there are challenges ahead – not least in terms of costs and ongoing issues at its Nordics division – but Currys has built itself a solid foundation on which to overcome them.