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Investing.com -- British electronics retailer Currys PLC (LON:CURY) posted stronger-than-expected annual results, reporting adjusted pre-tax profit of £162 million for the year ended May 3, above the company-compiled consensus of £159 million. Solid sales growth and tight cost control helped offset inflationary pressures and higher wage costs.
The company’s shares jumped around 8% in London trading after the report.
Group revenue rose 3% year-on-year to £8.71 billion, supported by a 2% increase in like-for-like sales. Free cash flow surged 82% to £149 million.
The board proposed a final dividend of 1.5p, ahead of consensus of 1.3p per share, and in line with its stated aim to deliver consistent and growing shareholder returns.
RBC Capital Markets analysts said Currys’ full-year results were "in line overall," highlighting "good news on dividend/buyback potential."
They note that U.S. tariffs could increase the cost of importing electricals from Asia, leaving open the question of whether major brands will redirect more volume to Europe or spread price increases globally.
However, “notwithstanding this uncertainty CURY has strong momentum and a gradually developing strong cashflow story in our view," analysts wrote.
In the U.K. and Ireland, Currys’ revenue grew 6%, helped by market share gains and growth initiatives.
Services revenue rose 12%, credit sales climbed 14% to £1.1 billion, and iD Mobile subscribers increased 26% to 2.2 million.
For the current year, Currys flagged several headwinds including U.K. budget-driven cost increases, general inflation, and currency pressure from a weaker Norwegian Kroner.
The company is pursuing cost-saving initiatives and said it remains “comfortable with market expectations” at this early stage.
Known guidance items include £65 million in interest expense, £95 million in capital expenditure, and £30 million in exceptional cash outflow.
Pension contributions are forecast at £78 million, with total dividend cash payments of £25 million across the current and next interim periods.
Looking ahead, Currys is targeting an adjusted EBIT margin of at least 3% in both the U.K. & Ireland and Nordic regions.
Capital expenditure is expected to stay below £100 million annually, while exceptional cash costs are seen falling below £10 million by 2026/27.
The group aims to maintain neutral working capital and continue generating free cash flow to support consistent and growing shareholder distributions.