Currys plc is a business with solid foundations and significant competitive advantages. It has a clear strategy to increase free cashflow and a balance sheet that is now strong enough to return increasing amounts of surplus free cash flow to shareholders.
Clear #1 omnichannel retailer in all our markets with a diversified revenue base
The UK technology market is worth £30bn and the Nordics market £11bn. Our scale underpins our long-term supplier relationships while our high brand awareness creates growth opportunities through market share expansion.
Strategic priorities designed to grow profits and cash flow
Our strategy is designed around four simple pillars that aim to drive higher customer satisfaction and loyalty, drive sales, improve gross margin and lower costs.
We are seeing the benefits of our strategy, through improved profitability, and continue to target at least 3% adjusted EBIT margins.
Significantly improved balance sheet
The last five years have seen a significant improvement to the Group’s balance sheet as indebtedness excluding lease liabilities has improved from £(805)m deficit to a surplus of +£81m. The Group intends to remain in a healthy net cash position, even as the pension deficit continues to reduce, but does not need any further cash on the balance sheet.
Aim to increase shareholder returns
The Group has a clear line of sight on increasing free cash flow through operating performance and for an ever greater proportion of it to flow to equity as the pension deficit reduces. The Group’s capital allocation priorities are clearly stated and following the recent resumption of dividends at 5x EPS cover, any surplus cash generated is available to be returned to shareholders.
1. GfK and company reports
2. UK&I adjusted EBIT margin in 22/23 includes a non-repeat £30m mobile revaluation which accounts for 0.6% of total UK&I adjusted EBIT margin.