Currys shares climb 10% as retailer battles inflationary costs in UK and Ireland

Currys CEO Alex Baldock said the business is well-positioned to weather any storm.

Shares in Currys soared 10% as the electricals retailer told investors it was for the most part keeping a lid on inflationary costs and that trading was so far holding up before Christmas. 

The retailer operates a total of 815 stores in eight territories, including 23 outlets across Ireland north and south. It posted a pre-tax loss of £16m (€18.6m) in the first six months to late October and said sales since that time were as expected given the cost-of-living squeeze on its customers. 

The business has struggled in recent years with significant challenges in the 95 stores it owns in Greece and Cyprus where it expects to complete a plan to sell up early next year, and in the Nordics region. The UK and Ireland remains by far its largest region but it doesn't break out the operations of the two areas.  

In Britain and Ireland, Currys has cut operating costs "as savings in property, marketing, and IT more than offset inflationary cost pressures", the retailer said. It said it was making progress on plans to save £300m of annual costs in the UK&I division by the end of its 2023/24 financial year.

The shares ended Thursday's trading session 10% higher, helping pare its losses to 32% from a year ago, and valuing the firm at £513m. 

The £156m it expects from the Greece sales transaction is set to transform its finances and will mean the company eliminates net debt by the end of the full financial year. 

"Our priorities this year are simple: To get the Nordics back on track, to keep the UK&I's encouraging momentum going, while maintaining a strong balance sheet and liquidity in a still-turbulent environment. We are only part way through the year with important trading periods still ahead of us, but so far we have made good progress in all three areas," chief executive Alex Baldock said. 

"In the Nordics, consumer demand has remained weak as headwinds of inflation and interest rate rises have impacted consumer confidence and driven another year of market declines...meanwhile, our cost-saving initiatives have helped keep cost under control in an inflationary environment. All this drove a significant improvement in profits compared to last year," Mr Baldock said.  

However, Currys left its trading guidance first given in early July unchanged for the full financial year. "The economic outlook remains challenging to forecast, but as we have shown this year, our business is well positioned to weather any storm and well set to prosper when conditions improve," the company said in the earnings statement.