Yahoo Finance Currys shrugs off lack of takeover offer by raising profit forecast for the year
Tech retailer Currys has officially ended its period for considering takeover bids without securing any offers.
Both Elliott Advisors and JD.com had been mulling bids to purchase Currys, but these have now fallen through.
Last Friday, major Chinese online retailer JD withdrew from the running acquire Currys. The decision came just one week after another potential buyer backed out. Currys confirmed today that it did not receive any formal proposal from JD.
Previously, Currys rejected a £700m takeover offer from hedge fund Elliott, saying the offer undervalued the business. Shortly after, Elliott made a second bid, this time worth around £750m, which management also turned down.
Shareholders in the British computer and household goods seller have expressed their aim for the group to be sold for at least £1bn.
But today, the group shrugged off the lack of a firm offer by raising its profit forecasts for the year, sending shares up 3.6 per cent.
On Monday, Currys also raised its pre-tax profit forecasts to “at least £115m”, up from the previously guided range of £105-115m.
Chief executive, Alex Baldock, 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,” Baldock added.
Currys said it expected to end the year in a net cash position, further bolstered by the impending sale of its Greek business, Kotsovolos, which is on track to be completed in the first half of April.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the earnings report today gives “a little more weight” to the board’s view that offers priced the company too low, especially as the weak current economic climate is partly to blame for Currys’ “lacklustre” performance.
She said: “Consumer electronics has been a challenging place to be, with shoppers’ spending power under pressure, but with inflation set to fall and interest rate cuts eyed on the horizon, there are hopes that these headwinds are subsiding, amid some signs of ‘encouraging momentum’.
“There are also bright spots emerging for the group’s services channels which have the potential to make customers more sticky, with Chief Executive Alex Baldock underlining that the group was selling more solutions and services that boost margins,” Streeter added.
