Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Currys swings to loss, cuts guidance after big hit to international business

Published 15/12/2022, 07:14 pm
Updated 15/12/2022, 07:14 pm

By Geoffrey Smith -- Currys (LON:CURY) swung to a hefty pretax loss in the first half of its fiscal year and cut its profit forecasts for the full year, after destocking and a slump in demand hurt its international business. 

The group took a £511 million (£1=$1.2380) impairment charge against its overseas businesses, which are concentrated in the Nordic region.  

The news was the latest in a growing tale of woe from consumer-facing businesses in the U.K., albeit the domestic business escaped the fate of the international one, as Currys pushed through price increases to offset falling sales volumes. Revenue in the U.K.& Ireland was still down 10% on the year, reflecting consumers' shift away from spending on appliances as the pandemic faded.

"Our International business...has had a difficult first half with margins sharply down," the group said in a statement on Thursday. "Lower demand has left domestic competitors with excess stock, which they're now heavily discounting."

It added it had already taken measures to defend margins and stressed that it expected this phenomenon to be temporary, saying that " demand will normalise, excess stock will wash through, and competitors will find unprofitable aggression hard to sustain." 

As a result of the impairment, Currys lost £548M before tax in the six months through October. Adjusted for the impairment, the loss was £17M, after a profit of £45M in the same period last year. 

Currys said trading since the October cut-off date had been in line with developments in the first half, and cut its guidance for full-year pretax profit (before impairments) to a range of £100M - £125M, from a previous estimate of £125M - £145M. It is still targeting a profit margin of 3% before interest and taxes within three years. 

Despite the loss, the company kept its interim dividend unchanged at 1p a share. 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.