Electricals giant Currys reported that earnings will come in ahead of guidance as the core UK and Ireland business traded ahead of expectations.

Annual profit at Currys is anticipated to be between to be £110m and £120m at group level in the year to April 29, versus previous guidance of £104m. 

The uplift was driven by the core UK and Ireland division, which is expected to generate a full-year adjusted EBIT increase of more than 40% year on year helped by a better-than-expected performance in the final two months of the year.

Currys said that the improvement in UK and Ireland profits was “driven by continued gross margin improvements and management focus on cost efficiencies”.

UK and Ireland like-for-likes were down 7% for the year – an improvement on the 10% decline in the first half – and that moderated to 4% in the second half. 

Currys’ international business is expected to deliver EBIT “materially lower” than last year, hit by a price war in the Nordics where full-year like-for-likes were down 10%. 

Currys said “structural changes” that are in progress will take out at least £25m of annual costs at the Nordics arm, with one-off cash costs of between £15m and £20m.

The business said the strong end to the year means its net debt is around £100m, compared to previous guidance that it could be as much as £150m.  

The retailer reported that it had amended a fixed charge cover covenant on its revolving credit facility, “providing increased financial resilience”.

 

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