Electricals retailer Currys has today raised the profit outlook for its 2022-23 year after better than expected trading in its home market in its final two months, sending the group's shares higher.
The stock was up 7% in early trading but remains down 33% over the last year, as consumers grappling with a cost-of-living crisis have avoided some so-called big-ticket items such as televisions and computers.
Currys lowered its guidance in March due to the weak performance of its Nordics business.
But it said today it now expected to report adjusted pretax profit of £110m-120m in the year to April 29.
That is ahead of the March guidance of around £104m, but down from the £186m made in 2021-22.
The group said like-for-like sales in its UK and Ireland division fell 4% in its second half, having slid 10% in the first.
It forecast full-year profit in the division would be more than 40% higher, driven by improvement in its gross margin and cost savings.
However in the Nordics business, like-for-like sales were down 12% in the second half, deteriorating from a 7% fall in the first, with the market described as "challenging".
Currys, which also trades in Greece, said full-year profit in its international division would be "materially lower" because of the Nordics performance.
It noted that new management put into the Nordics business in March had made progress and was removing £25m of annual costs.
Currys said it expected to end the year with net debt of around £100m compared to its previous guidance of up to £150m.
It also said its lenders had amended the fixed charge cover covenant on its £500m revolving credit facility, providing increased financial headroom.
"These positive surprises reassure that there is good downside protection to forecasts and that balance sheet risk has been removed," said analysts at Liberum.