Currys posts profit fall as Nordics successful track record ‘brought to abrupt halt’

Currys reported profit before tax of £119m, which it said has fallen “at the top end of guidance” for the full year to April 29, 2023, despite being down 38% year on year due to “lower Nordic profits”.

Currys also posted a 45% jump in full-year adjusted EBIT year on year to £170m for its core UK and Ireland division.

Revenue dropped 6% for the year to £9.51bn, down from £10.1bn in the previous year, as all of the retailer’s markets saw a decline except Greece, which Currys attributed to “a fall in consumer spending due to persistent inflation and rising interest rates”.

The retailer said the decline in sales was also a result of a “normalisation of spend on technology” following the boom in growth during the pandemic.

Focusing on its international performance, Currys said the consumer spending environment had “deteriorated rapidly” over the past year.

It emphasised that falling consumer demand was a result of overstocking in the market more generally as its competitors have “heavily discounted products, preventing the pass-through of inflated cost of goods”, which has had an impact on Currys profits.

In terms of outlook, Currys said that, due to an uncertain economic outlook in its main markets, it will remain consistent with a “cautious approach” and confirmed that the board has opted not to declare a final dividend.

Currys chief executive Alex Baldock said: “We’ve had a very mixed year. Our strengthening UK and Ireland performance shows our strategy is working well. But our long track record of success in the Nordics was brought to an abrupt halt.

“Our market has been tough everywhere, with depressed demand, high inflation and unforgiving competition. I’m proud of how our colleagues rose to this challenge, continuing to bring the benefits of technology within easy reach of millions of customers – to you all, thank you.

“Our UK and Ireland colleagues’ great work shone through in world-class engagement scores, in another year of record customer satisfaction, in maintaining number one market share and in more customers for life as we grew services. All this was reflected in another year of growing UK and Ireland profits, with improving gross margins and continued cost discipline.

“Looking ahead, we’re wary of optimism about consumer spending power. Accordingly, we’re being prudent in our planning and in further strengthening our balance sheet. Our focus is on continuing a very encouraging trajectory in the UK and Ireland while we get the Nordics back on track and being attentive to mitigating any downside risk.

“We may be cautious in our promises for the short term, but our confidence is undimmed as we build a stronger and more resilient business that is fit to prosper in the longer term.”