Currys shares soar as retailer lifts earnings guidance again
- The London-based business hiked its earnings outlook back in January
Currys shares soared on Thursday after the company raised its profit outlook for the second time this year.
Back in January, the London-based business hiked its earnings outlook on the back of strong demand over the Black Friday and Christmas periods.
It reported trading had been 'robust' since then, with 'positive' like-for-like revenue growth noted across the UK, Ireland, and the Nordic region.
The consumer electronics retailer now anticipates its adjusted pre-tax profits for the 53 weeks ending 3 May to be approximately £160million, compared to prior guidance of between £145million and £155million.
Following this announcement, shares in Currys jumped by 14.2 per cent to 101.6p by the late morning, making them the FTSE 250's best performer.
Currys returned to sales growth early last year just as the firm was receiving takeover approaches from investment giant Elliott Advisors.
Forecast: Currys anticipates its adjusted pre-tax profits for the 53 weeks ending 3 May to be approximately £160million
Waterstones owner Elliott made bids valuing the chain at £700million and £757million, respectively, but Currys rejected them for being too small and undervaluing its future prospects.
Chinese e-commerce giant JD.com also considered making an offer for Currys before deciding not to put forward any proposals.
Russ Mould, investment director at AJ Bell, remarked: 'When a company rejects a bid on valuation grounds, the onus is on management to demonstrate their claims weren't hollow.
'Its latest update offers further evidence that the 62p per share bid [from Elliott] was genuinely too low, with the shares managing a double-digit advance despite wider market weakness.'
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Established in 1884 as a bicycle manufacturer, Currys later moved into selling radios, toys, and gramophones.
It was acquired exactly a century after its founding by Dixons Retail, whose former longtime boss, Stanley Kalms, died last week aged 93.
Kalms transformed Dixons from a single camera shop in north London into Britain's biggest consumer electronics retailer by selling everything from digital cameras to mobile phones, hi-fi systems, and computer game consoles.
Under his leadership, the group also launched one of the UK's first internet service providers, Freeserve, which was sold for £1.6billion to Wanadoo in 2000.
He was chairman of Dixons until 2002 and president until 2014, when the company merged with mobile phone retailer Carphone Warehouse to form Dixons Carphone. The firm took its current name seven years later.
AJ Bell's Mould added: 'Currys is one of the last remaining electronics retailers with a physical presence on the high street and it is making a virtue of this status by offering handholding when people are buying increasingly complex consumer technology.
'It also offers a full range of services from credit to delivery, installation, repairs and recycling, and these help it to stand out from the crowd.'
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