The heading
still needs changing to Curry's PLC (CURY)
Interim results:
UK&I performance strengthens again, International impacted by temporary market disruption
We Help Everyone Enjoy Amazing Technology
Key Highlights
● UK&I profit growth as gross margin improvements and cost savings offset sales decline
● International profits down significantly due to actions taken in face of competitors' heavy discounting
● Cost savings: UK&I programme well on track for £300m saving target, International offsetting inflationary pressures
● Tech market still larger than pre-pandemic (UK +14% Yo3Y, Nordics +15% Yo3Y)
● Online share of business stable, highlighting strength of omnichannel model following pandemic disruption
● UK&I Credit adoption of 17%, +460bps YoY and well ahead of 16% target for 2023/24
Financial Performance1
● Group LFL (8)% (Yo3Y +7%); Revenue (7)% (Yo3Y (6)%)
● Group adjusted loss before tax £(17)m, down £(62)m YoY due to lower International profits
● Group statutory loss before tax £(548)m driven by non-cash goodwill impairment of £(511)m
● Period-end net debt £(105)m with significant liquidity headroom given total revolving credit facilities of £676m
● Pension deficit decreased slightly to £(251)m (30 April 2022: £(257)m, 30 Oct 2021: £(416)m) despite market volatility
● Interim dividend of 1.00p declared (flat YoY).
Current Year Guidance: Reflecting the strength of the UK&I business and the disruption to our International markets, we now expect full year PBT to be between £100-125m, with cash generation in the second half.
Alex Baldock, Group Chief Executive
"Currys UK&I performance continues to strengthen, and is showing real momentum, reflecting good progress in our transformation. International, however, has had a tough period, and faces short-term but intense pressures from a disrupted market.
In the UK&I, our profits are up, from increased gross margins and strong cost discipline. We're bucking the trend with world-class and increased colleague engagement. Our customers are happier too, and are more likely than ever to recommend us. We are making more of our winning Omnichannel model and are building more Customers for Life with strong Services growth.
Our International business, which has consistently delivered growth in sales and profits over many years, has had a difficult first half with margins sharply down. Lower demand has left domestic competitors with excess stock, which they're now heavily discounting. This has substantially disrupted the market, and required margin investment to keep our sales strong. We expect these pressures, intense though they are, to be temporary - demand will normalise, excess stock will wash through, and competitors will find unprofitable aggression hard to sustain. We've also stepped up our self-help actions on margins and cost.
Of course, our customers are feeling real cost of living pressure and our job is to help them get hold of the technology that's more essential to their lives than ever. We're doing that, through our price promise, giving customers access to responsible credit, and offering more products that save them money through lower energy costs. Our Go Greener range is flying off the shelves.
It's a tough environment, and we are planning for that to continue. Still, we expect to maintain the trajectory of improving UK&I profitability and a robust recovery in International profits. Our ever-improving customer experience and strong Services give us confidence in improving margins. And we will continue our excellent progress on cost efficiency.
We have a strong balance sheet and a strategy that's working. By focusing on the things we can control, while doing everything we can to support our colleagues and customers, we'll ride out the current turbulence and emerge an even stronger business well-set for long-term success."
and
The Board has declared an Interim dividend of 1.00p per ordinary share for the half year to 29 October 2022. The dividend will be paid on 27 January 2023 to shareholders registered at the close of business on 30 December 2022. The ex-dividend date will be 29 December.