Currys: Retailer raises profit outlook after two suitors walked away

It said group underlying pre-tax profits for the year to the end of April are now expected to be at least £115m, up from the previous guidance for between £105m and £115m.

The group had already increased its profit guidance in January as cost savings helped boost its performance.

The update follows heavy share slides last week after Waterstones owner Elliott Advisors pulled out of takeover talks, followed just days later by Chinese online retailer JD.com walking away from a possible bid.

The group had seen its shares boosted by the prospect of a bidding battle, but they fell more than 12 per cent last week after the suitors retreated.

US activist investor Elliott Advisors had made two proposed offers for the company, the second of which valued it at about £757m, with both having been rebuffed by Currys for being too low.

The investment management group said last Monday that Currys had rejected multiple attempts to engage with the board, so it would not be making a third bid.

JD.com, which claims to be China’s biggest online retailer, said last month it was considering a possible deal to buy Currys, but on Friday said it did not intend to make an offer.

Currys shareholder JO Hambro Capital Management UK Equity Income Fund had said earlier this month that the tech retailer should hold out for an offer of around £1bn.

The bid interest had come amid an overhaul at Currys to focus on its core UK and Ireland business, with bosses striking a deal last year to sell its Greek and Cypriot arm for 200 million euros (£171m) and taking action to turn around its loss-making Nordics division.

The retailer had seen sales fall 3 per cent over the crucial Christmas period because some customers were still holding back on making more expensive purchases as the cost-of-living crisis continued.

But in its latest update, it said sales in the UK, Ireland and Nordics have been “positive and gross margins remain robust”.

The group expects the sale of its Greek operations to be completed in the first half of April.

Alex Baldock, Group Chief Executive, said: "We've been working to get the Nordics back on track, while keeping up the UK&I's encouraging momentum.

"Both are progressing well, despite still-challenging markets, and we now feel confident to raise this year's profit expectations to at least the top of our previous guidance.

"Stronger trading, selling more of the solutions and services that boost margins and build customers for life, and strong cost discipline have all been important.

“We expect to finish the year in a net cash position, with our already healthy balance sheet and liquidity further strengthened by the sale of Kotsovolos.

“Thank you to all my colleagues who are making this possible - you're building an ever-stronger Currys that helps everyone enjoy amazing technology"