Currys pins growth hopes on AI-powered technology

Headline profit at the high-street stalwart fell to £117m during the year, down from £147m following the group’s decision to offload its business in Greece. Full-year revenue dropped to £8.47 billion, down from £8.87bn from the previous year – again influenced by consumers reining in their spending.

Currys shares soar as overseas interests circle for tech retailer

However, the group pointed to the growth in AI-enabled phones and laptops with an upbeat chief executive Alex Baldock stating that Currys stands to benefit from advances in technology. “We expect AI-powered technology to be the most exciting new product cycle since the tablet in 2010,” he said. “With our partnerships, scale and expert colleagues to demystify AI, we’re best placed to benefit.”

Samsung’s Galaxy S24 mobile phone, which uses AI tools to offer better photography and instant translation, is one of its bestsellers, alongside more traditional products such as 85-inch TVs, boosted by the Euro 2024 football tournament, along with air fryers which are holding their appeal as more consumers are drawn to energy-efficient appliances and healthy eating. Action cameras and drones are also popular.

Currys, which saw US investment firm Elliott Advisors – the owner of bookseller Waterstones – and Chinese e-commerce group JD.com abandon their respective takeover bids for the group during the year, said consumer confidence was returning. “Our performance continues to strengthen,” Mr Baldock noted.

“We’ve kept up our encouraging momentum in the UK&I, our Nordics business is getting back on track, and we’re stronger financially.

“We’re planning prudently but confidently for the year ahead, on course to grow both profits and cashflow while carefully stepping back up to more normal investment levels.”

In May, Currys became Microsoft’s first official retail repair partner in the UK. The retailer has focused heavily on services including its Currys’ Care & Repair service – which offers protection, repair, refurbishment and recycling services – and its growing iD Mobile division.

A staple of retail parks and high streets for many years, the retailer has
727 stores in six countries – 301 of them in the UK and Ireland where it employs 14,850 staff – and a strong online business.

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Guy Lawson-Johns, an equity analyst, Hargreaves Lansdown, was bullish about Currys’ prospects, stating: “After a year of takeover talk in what has been a tough trading environment, meeting guidance with a 10% rise in full-year profit should be considered a good result. The continued recovery indicates potential easing of market headwinds and signal a cautious optimism for the future.

“Consumers have struggled to justify upgrading appliances, with demand for small electrical goods particularly affected. But an increase in UK consumer confidence, driven by rising economic optimism, suggests that a recovery in discretionary spending may be under way. 

“Importantly the Nordics have also shown some signs of life, sharing in the group’s 10% underlying profit growth. But while margins have improved, prolonged weakness in consumer demand will be on everyone’s mind. A continued improvement will need to be seen to before management can say the recovery job is done.”

Pointing to Currys’ partnership with Microsoft, Lawson-Johns added: “Tapping into the circular economy may be a shrewd move from an environmental standpoint, but the potential cannibalisation of new business has raised eyebrows. CEO Alex Baldock has dismissed these concerns, but we will be assessing future updates for a clearer view on the long-term impact.”