Currys has praised a robust first half of the year, driven by strong demand for AI-enabled laptops and a growing mobile business, which contributed to profit growth. However, the retailer highlighted the impact of recent UK government policy changes, forecasting an additional £32 million in costs.
These costs include £9 million due to higher National Living Wage increases, £12 million from increased National Insurance contributions, £2 million from inflation-driven business rate tax hikes, and up to £9 million from rising supplier expenses.
CEO Alex Baldock expressed concerns over “new and unwelcome headwinds from UK government policy,” emphasizing that these changes could rapidly increase costs, reduce investment and hiring, boost automation and offshoring, and lead to unavoidable price hikes.
Despite these challenges, Currys reported a 6% rise in sales across the UK and Ireland for the six months ending 26 October. Group-wide revenue reached £3.9 billion, representing a 1% year-on-year increase and a 2% like-for-like rise, offsetting a 2% decline in its Nordic operations.
Adjusted EBIT surged by 52% to £41 million, driven by strong performance in the UK and Ireland, which posted a 53% profit boost. Baldock stated, “We’re very encouraged by our progress. Currys’ performance continues to strengthen, with profits and cashflow growing significantly, and the Group’s balance sheet is strong.”
The retailer has maintained its leading position in the AI laptop market, holding over 75% of the UK market share, with Baldock noting, “AI is a trend with a lot further to run.” The mobile business also continued its strong performance, with iD Mobile subscriber numbers rising 32% year-on-year to 2 million.
Baldock added, “We made big improvements to both online and store channels. Customers continued to adopt solutions and services that benefit them and us, and areas like B2B and iD Mobile performed well, contributing to growing sales, market share, gross margins, and profits.”
Looking ahead, Currys has maintained its full-year guidance, expecting continued profit and cash flow growth, with an adjusted EBIT margin of at least 3%. Despite external pressures, such as inflation and government policy shifts, Baldock remains confident in the retailer’s strong performance trajectory.