Currys endures Nordic noir as debt guided to be significantly higher

Electronics retailer to post full-year profit at lower end of expectations

A recent revival in Currys (CURY) shares has petered out in spectacular fashion as a previously reliable part of the business has become more and more of a problem.

A tough consumer environment in the Nordics region which had initially been flagged as a short-term issue linked to competitors selling off excess stock at a discount now looks more troubling.

On Currys said that its Nordics business performance ‘remains very challenging,’ so much so that they have recently appointed a new CEO for the region; Frederik Tonnesen.

Tonnesen’s appointment is an attempt by Currys to restore healthy levels of profit and cash generation.

Since the start of the year, the Nordics business has worked hard to reduce marketing residential homes, which are stoking demand for its products.

Berenberg upgraded its earnings per share estimates for the next three years following the results and believes Volution is ‘very well positioned given its sector-leading pricing power, regulatory tailwinds, an increasing focus on indoor air quality, and its strong balance sheet’. [JC] spend, remove spend on contractors and there are further cost savings actions planned.

In The Dumps

However, this ‘Nordic drag’ has meant the company forecasting pre-tax profit for the current financial year to 30 April at the lower end of the previously guided range of £100-£124 million with net debt materially higher at up to £150 million compared with a previous steer of less than £100 million. [SG]