…By Henry George for TDPel Media.
Currys, the remaining entity of the former Dixons and Carphone Warehouse empire, experienced a 13% crash in its shares as investors expressed concerns about the tough consumer environment and the absence of a dividend payout.
While UK consumers continue to spend on high-end electrical goods, they are prioritizing energy-efficient appliances that offer long-term cost savings over luxury items like TVs and speakers.
Mixed Year for Currys with Profit Decline and No Dividend
Currys reported a 38% decline in profits to £119 million for the year, although this figure still exceeded City expectations.
However, the company chose not to distribute dividends due to the broader economic uncertainty.
The retailer also observed an increase in customers purchasing goods on credit, which it considers important for society.
Losses and Impairment Charge Impact Currys
Currys incurred an overall loss of £450 million, primarily due to an impairment charge related to the 2014 merger of Dixons and Carphone.
CEO Alex Baldock acknowledged the challenging trading environment, characterized by depressed demand, high inflation, and intense competition.
Caution Among Consumers and Focus on Online Presence
Experts note that consumers remain cautious due to rising living costs, contributing to ongoing economic uncertainty.
To mitigate these challenges, Currys is prioritizing its online presence.
The recent appointment of Pamela Puncher as the head of delivery in this area is seen as a strategic move to prevent e-commerce competitors from capturing potential sales.
Sales Decline and Challenges in Different Markets
Currys reported a 6% decrease in sales, amounting to £9.5 billion, for the year ending in April.
The UK and Irish operations experienced an 8% decline, but performed better than the Nordic business, which faced a particularly challenging year.
The company noted a normalization of technology spending across all markets after a surge during pandemic-related lockdowns.
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