Currys – trading update shows increased confidence, shares at 36-month High at 125.20p, TP 180p

21.05.2025

This morning’s Trading Update from Currys (LON:CURY), for the 53-week year ending Saturday 3rd May, guided that the technology products and services retailer will have seen its adjusted pre-tax profits some 37% higher at around £162.0m, while ending the period with over £180m of net cash.

Importantly for institutional investors, the group is expected to resume cash dividends for the year.

Management Comment

CEO Alex Baldock stated that:

"We finished another year of strengthening performance on a high note with encouraging momentum and accelerating sales growth in both the UK&I and the Nordics.

In both, we've grown profits by delivering sales growth, market share gains and gross margin increases.

In the Nordics, we've also shown especially strong cost discipline in a still-challenging market.

Cashflow was very healthy.

This further strengthening of our balance sheet ensures our resilience and allows the resumption of dividends.”

The Business

This group, which was established in 1884, was formerly known as Dixons Carphone before changing its name to Currys in September 2021.

Capitalised at some £1,420m, the group is a leading omnichannel retailer of technology products and services, operating both online and through 715 stores in 6 countries. 

In the UK & Ireland it trades as Currys and in the UK, it also operates iD Mobile, its own virtual network.

The group trades under the Elkjøp brand in the Nordics.

Its operations include Europe's largest technology repair facility, a sourcing office in Hong Kong and an extensive distribution network, centred on Newark in the UK and Jönköping in Sweden, enabling fast and efficient delivery to stores and homes.

The company is the market leader in all of its markets, serving all households and employing 24,000 people across the group.

The Equity

There are 1,133,494,651 shares in issue.

The larger holders include RWC Asset Management (11.81%), Schroder Investment Management (8.31%), Cobas Asset Management (6.11%), Wishbone Management (4.99%), Artemis Investment Management (4.98%), Ruffer (4.62%), JO Hambro Investment Management (4.57%), Liontrust Portfolio Management (3.91%) and The Vanguard Group (3.82%).

Broker’s Views

There are eight analysts following the group, five of whom call the shares a Buy, two a Hold and the other strangely being without an opinion.

The consensus average is for a 142p Target Price, the Highest at 180p, the Lowest at 95p.

Analysts Wayne Brown, Ben Hunt and Anubhav Malhotra, at Panmure Liberum, have a Buy rating on the group’s shares with a Target Price of 180p.

In the last 12 months, they have upgraded their estimates by 26.5% for its 2025 profit.

Their estimates for the year to end April 2025 suggest group sales of £8,523m (£8,476m), pre-tax profits of £161.8m (£118.0m), with earnings rising to 10.8p (7.9) per share, while returning to the dividend list with a payment of 1.3p (nil).

For the year now underway, they look for £8,624m sales, £164.6m profits, 11.0p earnings and a 2.2p dividend per share.

The 2027 year should generate £8,857m sales, £181.2m profits, 12.1p earnings and a 2.4p dividend.

My View

I really like the prospects for this group as it progresses over the next couple of years.

Its shares, now at a 36-month High at 125.20p, have a lot further to increase in price as the group’s undervaluation is recognised.

(Profile 10.07.23 @ 49p set a Target Price of 61p*)

(Asterisks * denote that Target Prices have been achieved since Profile publication)