Currys Plc (LON:CURY) has announced its trading update for 17 weeks ended 30 August 2025.
Strong start to year, new £50m share buyback commencing
· UK & Ireland like-for-like revenue +3%
o Robust sales driven by market share gains with double-digit growth in new categories and B2B
o Strong sales in gaming, AI computing, large appliances, coffee machines and cooling products, offset by declines in TVs, tablets and air fryers
o Recurring Services revenue growing strongly with credit adoption +190bps to 23.3% and iD Mobile reaching over 2.3m subscribers, +22% YoY
o Gross margin stable and the expected cost increases offset by operating leverage from higher sales
· Nordics like-for-like revenue +2%
o Sales growth driven by AI computing and success in new categories such as robotic lawnmowers and vacuums
o Elkjøp’s kitchen brand, Epoq, saw very strong momentum
o Gross profit growth in every country driven by strategy of focusing on more profitable sales
o Operating costs tightly controlled – offsetting inflation and driving improved profitability
· Triennial pension review completed
o Actuarial deficit as of 31 March 2025 reduced to £134m (from £403m as of 31 March 2022)
o Group will pay £82m of contributions this year as planned
o Future contributions of £13m p.a. over five years to March 2031 (previously £78m p.a. until December 2028)
· New share buyback programme to commence immediately
o Consistent with the Group’s capital allocation framework, a new £50m share buyback programme will commence immediately
o Alongside the previously announced cash dividend of c.£25m, cash returns to shareholders will total c.£75m this year
· Outlook
o Group trading in the first four months of the financial year has been in line with expectations
o Planning confidently for year ahead, comfortable with market consensus1
o Targeting continued growth in higher margin, recurring revenue Services, including reaching at least 2.5m iD Mobile subscribers before year end
o Year-end net cash expected to total at least £100m post pension contributions and capital returns
| Like-for-like revenue – YoY | |
| UK & Ireland | +3% |
| Nordics | +2% |
| Group | +3% |
Alex Baldock, Group Chief Executive
“It’s been a good start to the year, with encouraging performance across the Group. In the UK&I we’re pleased with the trajectory in our growth areas of new categories, B2B and the Services that are so valuable to customers and to Currys. Credit was notably strong, and iD Mobile is on track to beat the 2.5m subscriber target we set for this year.
Our Nordics recovery continues to pick up pace. We continue to grow, improve margins and control costs well. We’re confident that profit margins will step forward again this year.
We’re working to deliver an ever-improving experience for colleagues, for customers and for shareholders, as reintroducing the dividend and now starting share buybacks shows. None of this would be possible without our thousands of capable and committed colleagues; my heartfelt thanks go out to them. We’re on a good track at Currys, with growing momentum. We’re determined to keep it up, and believe we can.”
1. Company compiled consensus for 2025/26 forecasts Group adjusted PBT of £170m. Full forecasts are available on the corporate website: https://www.currysplc.com/investors/consensus-and-analyst-coverage/
Outlook, guidance and capital allocation
Current year guidance
In line with usual practice, the Group will update the market on full year profit expectations after the Peak trading period, but at this early stage in the year it is comfortable with market expectations.
Guidance on known and controllable financial items is listed below and, other than where noted, is consistent with previous guidance. The Group expects:
· Total interest expense of around £65m
· Capital expenditure of around £95m
· Exceptional cash outflow of around £30m
· Pension contributions of £82m (from £78m)
· Cash dividend payments of c.£25m across the 2024/25 final and expected 2025/26 interim dividend
Other technical cashflow items:
· Depreciation & amortisation around £265m
· Cash payments of leasing costs around £260m
· Cash tax around £20m
· Cash interest of around £15m
· Share purchases to cover colleague share awards of £15-20m
Longer term guidance
The Group is continuing to target at least 3% adjusted EBIT margin in both the UK&I and the Nordics.
Alongside this, the Group will remain focused on free cash flow generation. The Group expects to keep annual capital expenditure below £100m, for exceptional cash costs to be below £10m by 2026/27, and to keep working capital at least neutral despite continued outflow from the expected growth of the iD Mobile business.
The Group’s cash tax will remain below adjusted P&L tax due to the tax deductions from defined benefit pension scheme contributions and the benefit of brought forward losses in the UK and Nordics.
The Group’s pension contributions will reduce to £13m per annum for five years from 2026/27 and cease thereafter.
The Group will aim to distribute consistent and growing cash to shareholders as outlined in the capital allocation framework which is set out below.
Capital allocation
The Group’s continued focus on free cash flow resulted in 2024/25 year-end net cash of £184m. Following this year’s £82m pension contribution, the actuarial pension deficit is estimated to be around £(55)m.
On this strong foundation, the Group has a clear capital allocation framework:
1. Maintain a prudent balance sheet – This has historically been defined as meeting banking covenants and our own targets for indebtedness fixed charge cover of >1.5x and indebtedness leverage of <2.5x. Alongside these targets, the Group will look to maintain a year-end net cash balance of at least £100m for the foreseeable future. This level of cash allows us to efficiently manage the working capital cycle of the business and protect the balance sheet in the event of unexpected market downturns.
2. Pay required pension cash contributions – The triennial pension review has now completed, and the Group has agreed to pay £82m of contributions in H1 2025/26, followed by annual contributions of £13m for the five years through to 2030/31. At the end of this period, the scheme should be fully funded on a very prudent basis and contributions should cease.
The Group will pay additional shareholder matching contributions to the pension scheme if shareholder returns (defined as dividends plus share buybacks) are greater than £80m p.a., or greater than £40m p.a. if Group year-end net cash is less than £50m. If any additional shareholder matching contributions were to arise, these contributions will reduce future amounts payable to the scheme under the new funding plan, starting at the outer year.
3. Invest to grow business/profits/cashflow – The Group has set an annual capital expenditure target of less than £100m, which is low by historic levels, but reflects the well-invested nature of the Group’s assets and that an increasing proportion of investment spend is expensed through the P&L. The Group continues to prioritise high returning projects and the efficient use of capital and is comfortable that this level of expenditure provides sufficient bandwidth to achieve our objectives.
4. Pay and grow an ordinary dividend – The Board is committed to paying dividends at a level that represents around 5x adjusted EPS cover. Future dividends are expected to grow and will be declared in the normal course alongside interim and year-end results.
5. Surplus capital available for share buybacks – The Group is committed to returning excess cash to shareholders through a share buyback programme. Following the conclusion of the pension triennial review, the Board is commencing a £50m share buyback immediately. Future share buybacks will be evaluated in the context of the Group’s capital allocation framework and announced accordingly.
