Currys is poised to unveil a dip in annual sales as the tech retailer battles with weakened consumer spending, despite recently dismissing overseas takeover bids.
The high street chain, boasting around 300 UK outlets, is set to release its full-year trading figures on Tuesday. Analysts have pegged Currys' pre-tax profits at roughly £114million for the year just ended, a slight decrease from £119million the year before, based on a consensus compiled for the company.
Overall sales are anticipated to fall to about £9billion, down from £10billion in the previous year. The electronics giant, offering an array of products from televisions and smartphones to kitchen appliances, has acknowledged that the cost-of-living crunch is impacting its clientele.
This economic pressure has translated into a drop-off in demand for pricier items, with consumers delaying significant purchases. However, the latest update from the company indicated a resurgence in like-for-like sales at the start of the year, prompting Currys to revise its profit forecast upwards.
Earlier this year, the firm was thrust into the spotlight amid rumours of a takeover tussle. But acquisition prospects fizzled out when two potential buyers backed out of negotiations.
Elliott Advisors, a US-based group, abandoned discussions after "multiple attempts to engage with Currys' board, all of which were rejected", including a bid exceeding £750million. Currys has rejected Elliott's proposals, stating they undervalue the company.
Chinese retail giant JD.com had also contemplated making a bid, but ultimately decided against it. The interest in bidding comes at a time when Currys is undergoing a transformation, focusing on its UK and Ireland business after selling off its Greek and Cypriot arm last year.
Investors will likely be keeping a close eye on updates regarding the group's loss-making Nordics business, which is their second largest territory and one they are trying to turn around. Experts have suggested that Currys may have experienced a boost in consumer confidence recently due to a significant drop in UK inflation, and hopes that wider economic issues are improving.
Guy Lawson-Johns, an equity analyst for Hargreaves Lansdown, commented: "Currys' performance has been underwhelming in recent times. Consumers are simply struggling to justify discretionary spending on TVs, computers and gadgets."
He added: "On the plus side, record credit adoption in the UK and Ireland has boosted service revenue. Meanwhile, the prospect of falling inflation and UK interest rate cuts gives some hope that these headwinds could subside."