Currys Share Price Rallied 5.9% on Trading and Takeovers Update

The Currys PLC (LON: CURY) share price rose 5.85% after the company announced that Elliott Advisors and JD.com did not intend to make an offer. The company also issued a trading update for the current fiscal year, showcasing a robust performance. 

Currys plc, a leading electronics retailer, has noted recent declarations from Elliott Advisors (UK) Limited and JD.com. These announcements, dated 11 and 15 March 2024, clarified that neither entity plans to pursue a takeover of Currys. 

This development places Elliott and JD.com under the constraints of Rule 2.8 of the City Code on Takeovers and Mergers. Additionally, Currys' management team has stated that JD.com has not submitted any acquisition proposals.

Following a notably successful Peak1 trading period, Currys reports that its sales performance has surpassed initial projections. The company has seen positive sales growth in the UK & Ireland and the Nordic regions, with solid gross margins. 

Positive sales and significant advancements in Services, which boost margins and foster long-term customer relationships, mean Currys anticipates its adjusted pre-tax profits to reach a minimum of £115 million.

Moreover, the company is progressing with its strategy to divest its operations in Greece, expecting to complete this transaction by mid-April 2024. As the fiscal year concludes, this move is anticipated to place Currys in a net cash-positive situation.

Currys has adjusted its financial outlook, now estimating its adjusted pre-tax profits to be at least £115 million, an increase from the previously projected range of £105 to £115 million. This revision considers fully incorporating the Greek operations for the fiscal year.

The company expects its capital expenditures to be around £70 million, its net exceptional cash costs to be £50 million, and its pension contributions to remain fixed at £36 million.

Alex Baldock, Currys Group CEO, said: “We've been working to get the Nordics back on track while keeping up the UK&I's encouraging momentum. Both are progressing well, despite still-challenging markets, and we now feel confident to raise this year's profit expectations to at least the top of our previous guidance. Stronger trading, selling more of the solutions and services that boost margins and build customers for life, and strong cost discipline have all been important. We expect to finish the year in a net cash position, with our already healthy balance sheet and liquidity further strengthened by the sale of Kotsovolos.”

Currys share price. 

The Currys share price rose 5.85% to trade at 59.36p from Friday’s closing price of 56.08p.