Currys might resume investor payouts within the subsequent yr

Currys announced it could restart shareholder handouts in the coming 12 months after it rebounded to profit last year.

The high street retailer axed its final dividend in 2023 after reporting a £450million pre-tax loss it blamed on weak demand, cost-of-living pressures and ‘unforgiving competition’.

But while trading conditions have remained challenging, the company recovered to a £28million pre-tax profit in the year ending April.

Hope: Currys announced it could restart shareholder returns in the coming 12 months

Earnings were boosted by massive cost reductions in its supply chain and service operations, a focus on more profitable sales in the UK and gross margins more than doubling at its Nordics business.

On an adjusted basis, Currys’ profits increased by 10 per cent to £118million, in line with previously raised guidance of £115million to £120million.

This was despite the group’s revenue sliding by 4 per cent to £8.5billion due to fewer purchases of computers and consumer electronics offsetting significant demand for mobile and services products.

Turnover across the British Isles, which declined by almost £100million to around £5billion, was also impacted by lower sales of major domestic appliances.

However, Currys heavily improved its balance sheet over the period, partly by selling its Greek division, Kotsovolos, for £175million to Public Power Corporation, Greece’s largest electric power supplier.

As a result, it ended the year with £96million in net cash, a £193million improvement on April 2023, and reduced its pension deficit from £249million to £171million.

Currys said this ‘represents a healthy position from which the company can pay required pension contributions, invest in future success and return cash to shareholders’.

It added that as long as trading aligns with forecasts, which it has over the ‘early part’ of this fiscal year, it intends to recommence investor returns ‘during the next twelve months’.

The FTSE 250 firm expects rising profits and free cash flow this year, supported by growth in high-margin, recurring revenue services and iD Mobile subscriber levels hitting 2 million.

Currys shares slumped by 6 per cent to 72.4p on Thursday morning, yet they have still grown since the year began by around 43 per cent.

The company’s share price soared in February after investment giant Elliott Advisors, which owns bookstore chain Waterstones, made an unsuccessful takeover approach for Currys.

Elliott refused to make a higher offer after Currys rejected two proposals valuing it at about £682million and £750million, respectively, because of their price.

Chinese online retailer JD.com also considered making an offer for the group but walked away, ending speculation of a bidding war.

Mark Crouch, analyst at eToro, remarked: ‘Shareholders will take confidence in the fact that not only are companies seeing value in the business, but that, and perhaps boldly, Currys’ board felt confident enough to reject the bid out of hand.

‘Fierce competition from online retailers is still a significant threat though, so it might require a change in strategy if Currys is to outmanoeuvre their rivals in the long run.’