Currys sales in focus after electronics retailer shrugs off takeover interest

Currys is set to reveal slower yearly sales as the electronics chain grapples with more fragile consumer demand, after shrugging off foreign takeover interest.

The chain, which has about 300 stores in the UK, will publish a full-year trading update on Tuesday.

It is expected to report a pre-tax profit of about £114 million for the latest year, down from £119 million the previous year, according to an analyst consensus compiled for the company.

Total sales are also set to dip to about £9 billion, from £9.5 billion last year.

The retailer, which sells everything from TVs and mobile phones to kettles and dishwashers, has previously flagged that its customers were feeling the effects of the cost-of-living crisis.

This was leading to slower demand for its big-ticket items, as people held off making more expensive purchases.

But like-for-like sales had started to return to growth over the start of the year, according to the latest update from the firm, leading it to upgrade its own profit outlook.

The company was in sharp focus earlier this year when it looked to be at the centre of a bidding battle.

But any hopes of a takeover were dashed when two potential suitors walked away from discussions.

US group Elliott Advisors said it walked away from talks following “multiple attempts to engage with Currys’ board, all of which were rejected”, including a takeover approach worth more than £750 million.

Currys said it felt Elliott’s proposals were too low and did not reflect its value.

Chinese retail giant JD.com said it had also been considering making a bid, but in the end decided not to.

Currys said its sales had returned to growth over the start of the year (Yui Mok/PA)

The bidding interest came at a time that Currys was undergoing an overhaul as it focused efforts on its business in the UK and Ireland, having struck a deal to sell its Greek and Cypriot arm last year.

Investors are also likely to have a close eye on updates on the group’s loss-making Nordics business, its second largest territory, which it has been trying to turn around.

Experts pointed out that Currys may have seen consumer confidence boosted in recent months thanks to a sharp fall in UK inflation, and hope that wider economic woes are easing.

Guy Lawson-Johns, an equity analyst for Hargreaves Lansdown, said: “Currys’ performance has been underwhelming in recent times.

“Consumers are simply struggling to justify discretionary spending on TVs, computers and gadgets.

“On the plus side, record credit adoption in the UK and Ireland has boosted service revenue.

“Meanwhile, the prospect of falling inflation and UK interest rate cuts gives some hope that these headwinds could subside.”