Currys vindicated after last year's takeover attempts
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Activist investor Elliott, headquartered in the US, finally withdrew its interest in March 2024 after a final offer that valued Currys at £757m was dismissed by its board of directors. Chinese online retailer JD.com followed suit the following day, saying it would not make an offer for the electricals retailer.
The board, led by chief executive Alex Baldock, have been vindicated in their decision to stand firm. Shares in Currys have risen by almost 70% during the past year, giving the company a market valuation in the region of £1.45bn.
"Currys' performance continues to strengthen and the business has real momentum," Mr Baldock said of today's annual results. "A stronger Currys is good for colleagues, customers, shareholders and society, and we're doing a better job for all of them.
"We're uniquely placed not just to sell customers amazing technology, but to help them enjoy it to the full. Customers are increasingly adopting our credit, setup, installation, repair and connectivity services, building valuable recurring revenues for Currys."
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The success of that distinctive brand proposition is clear to see in what Zoe Gillespie, wealth manager at RBC Brewin Dolphin, described as an "amazing" customer experience across its UK network of 281 UK stores, 27 of which are in Scotland.
Chris Beauchamp, chief market analyst at IG said the "very solid" update from Currys should help support further share price gains following the 25% uplift so far this year.
"The dividend has made a return, and performance looks good across the broad range of the business," Mr Beauchamp added. "At seven times earnings, the shares look cheap compared to the more positive outlook, which is rare thing to say in UK stocks right now."
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Nevertheless, challenges remain.
Premium mobiles and AI laptops have been areas where Currys is a market leader, but some industry experts question whether the product innovation from manufacturers is sufficient to support growth forecasts for these categories. Currys is also working hard to mitigate the impact of rising costs such as higher national insurance contributions, and there are ongoing issues in its smaller Nordics division.
Still, the group appears to have built a solid foundation from which to overcome these issues. In the here and now, Currys is a rare and much-needed good news story in the UK retail sector.
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