Currys

Financial overview

• Group sales fell 10.9% to £8,476m in FY2023 or 4% on continuing operations post the sale of its Kotsovolos business 
• UK&I sales declined 1.9% to £4,970m while Nordics slid 8% to £3,506m 
• Group online sales dipped around 1.6% to £3,182m 
• Back in the black at pre-tax level following divestment of Greek business 
• For latest financial results, click here

Group sales at Currys declined 10.9% to £8,476m in the latest financial year to 27 April 2024 (FY2023).  

Having sold its Greek Kotsovolos business, Currys provided a continuing operations comparison, with sales falling 4% on a reported basis and 2% in constant currency for the year.   

Like for like sales at the electricals retailer dropped 2% in the latest financial year with a decline in both divisions as “high inflation and rising interest rates caused weak consumer confidence and depressed demand.”  

Currys chief executive Alex Baldock said “Our performance continues to strengthen. We’ve kept up our encouraging momentum in the UK&I, our Nordics business is getting back on track, and we’re stronger financially.    

“We can see our progress in ever-more engaged colleagues, more satisfied customers and better financial performance. Continued growth in sales of solutions and services were particular highlights: they’re good for customers, margins and recurring revenues, and they lean on Currys’ competitive strengths. We’re planning prudently but confidently for the year ahead, on course to grow both profits and cashflow while carefully stepping back up to more normal investment levels.”   

Currys disposed of Kotsovolos in April 2024, causing its international revenues to shrink 21.1% to £3,506m in FY2023.  Sales within its remaining Nordics division fell 8% or 3% on a like-for-like basis. 

Currys group sales had fallen 6.2% to £9,511m in FY2022, with the retailer experiencing a sales decline in all markets except Greece, which it attributed to a reduction in consumer spending due to persistent inflation and rising interest rates.    

The retailer said the decline in sales in FY2022 was also the result of a “normalisation of spend on technology” following the boom in growth during the pandemic.   

The retailer returned to the black at the pre-tax level in FY2023, with pre-tax profit of £28m versus a £450m loss the year prior. The loss had been primarily driven by a non-cash goodwill impairment of -£511m in FY2022 resulting from the Dixons Carphone merger in 2014. 

UK&I performance 

The UK&I accounted for over 58% of group revenues in the latest financial year with sales down 1.9% to £4,970m or 2% on a like-for-like basis.  

Sales within UK&I stores fell 6% with online contracting 3% in the period. The retailer said sales of major domestic appliances fell slightly, while consumer electronic and computing sales declined “more steeply”. Mobile and services were the strongest performing categories. 

Retail sales within the region fell 2.2% to £4,296m in FY2023 accounting for 86% of revenues, while commission and service-based revenues accounted for the remaining 14% at £674m. 

Gross margin fell 40bps across the region in the latest financial year with the non-repeat of £30m mobile revaluations impacting margins by 60bps.  The retailer said “improved understanding and analysis of the end-to-end profitability has allowed for more selective promotional activity”, driving £35m of cost savings within supply chain. 

Adjusted EBIT fell from £170m to £142m in FY2023. 

UK&I sales had fallen 7.6% to £5,067m in FY2022, reflecting a trend of diminishing domestic sales share over the previous five years, with the international channel growing. Like-for-like sales fell 7% in FY2022 as squeezed customers reined in discretionary spend.  

Ecommerce sales performance 

Online sales came in £3,182m or 37.5% of total sales in FY2023 according to Retail Navigator estimates. 

Within this UK online share was flat to the previous year at 45%, with sales falling 3% in the channel, accounting for around £2,212m. Store sales fell 6% in the region in FY2023. 

Its Nordics region recorded an online share of 27% of sales, with Retail Navigator calculating this at £946m of sales. 

Total online sales stood at around 34% of group sales in FY2022, falling about 8 .9% year-on-year to £3,234m. 

UK&I online sales declined by 7.6% to £2,280m in FY2022, compared to £2,468m in FY2021 in line with channel shifts as customers returned to stores.   

UK&I stores financial analysis 

UK&I store sales fell 6% in FY2023 with store numbers in the region contracting slightly, falling from 301 to 298 in the year with selling space decreasing to 5,430 sq ft from 5,469 sq ft the previous year. 

Capital expenditure across the UK&I was £22m versus £58m the year prior, against total capital expenditure of £48m within the group in FY2023. 

The store channel had fallen 2% in FY2022, although Currys highlighted that omnichannel remains the preferred model for customers in the technology retail industry. Two-thirds of customers still prefer shopping in stores, as indicated by a slight increase in the store share of business.  

Retail Navigator has reviewed sales densities based on retail revenues over the last few years, with UK&I sales densities estimated to have remained at £385 / sq ft in FY2023. This has fallen slightly from around £405 / sq ft in FY2021, however. 

Employees 

Group employee numbers continued to fall in the latest financial year, from 29,569 to 27,788. UK&I employees also fell from 16,606 to 14,972.

As a consequence, sales per employee has seen a steady improvement, averaging around £335,205 during FY2023, up from £321,655 the year prior.  

The retailer’s staff costs to sales ratio had also been falling steadily, from 9.7% to 9.2% in the latest financial year, its lowest in a number of years. 

Current year

Q1

Currys hailed a “positive start to the year” with market share gains and improved margins in the 17 weeks ended 24 August 2024 (Q1 FY2024). Group sales grew 2% on a like-for-like basis. 

Chief executive Alex Baldock said “Trading is going well, strengthening our confidence in growing profit and free cash flow again this year.” 

Sales within the UK&I climbed 5% on a like-for-like basis in the quarter, with gross margin improvements driven by “continued positive momentum” in services, with credit and solution sales growing above expectations. 

Its Nordics region saw sales declining 2% on a like-for-like basis but market share growing despite conditions remaining “weak”. The retailer continues to keep a tight control on operating costs in the region, including reduced marketing spend and central costs. 

Guidance for the year remains unchanged.

Forecast 

Currys says it is planning “confidently” for the year ahead, expecting profit and free cash flow growth.  

The retailer says it expects “AI-powered technology to be the most exciting new product cycle since the tablet in 2010. With our partnerships, scale and expert colleagues to demystify AI, we’re best-placed to benefit”. 

Retail Navigator forecasts that discretionary spending will remain challenged for much of 2024 despite consumer confidence starting to recover. From then on, Currys should see a steady uptick in sales with both its UK&I and Nordics regions in recovery from 2025. 

Sales should reach nearly £9,500m by FY2028 with UK sales of over £5,600m. Total online sales are forecast to account for around 40% of group revenues by this time.