Currys (LSE: CURY) shares jumped 9% on Thursday morning, as the retailer delivered a set of results that suggest its turnaround is gathering pace.
Full-year pretax profit surged to £124 million from just £28 million a year ago, while revenue nudged up nearly 3% to £8.71 billion. UK and Ireland sales did the heavy lifting with a 6% gain, more than making up for a slight revenue dip in the Nordics. Basic earnings per share quadrupled to 10.0p, giving Currys enough confidence to bring back its dividend, with a final payout of 1.5p per share.
For investors, this is the clearest sign yet that Currys has moved on from its more fragile days. Free cash flow almost doubled to £149 million, and net cash on the balance sheet now sits at £184 million, its strongest position in over a decade.
CEO Alex Baldock was unsurprisingly upbeat, hailing the “real momentum” in the business and the success of Currys’ push into services like credit, repairs and installations. These higher-margin, recurring revenue streams are now central to the company’s strategy as it looks to soften its historic reliance on one-off hardware sales.
But not everything is firing on all cylinders. The Nordics remain a thorn in the side, with flat performance when stripping out currency effects and cost pressures lingering in the background. Currys is also having to deal with fresh headwinds, from stubborn cost inflation to the impact of the UK government’s latest budget.
Management says it’s “comfortable” with consensus forecasts for the year ahead, which points to modest profit growth. Whether consumer appetite for big-ticket electronics can hold up in a potentially tighter spending environment remains an open question.
Still, with dividends back on the table, cash generation improving, and signs of strategic discipline, Currys looks a far sturdier business than it did not long ago. The recovery may not be complete, but the company is certainly back in the game.