Currys Plc shares fell after the UK electronics retailer canceled its final dividend and lowered pension contributions in order to save cash as its Nordic business continues to battle tough competition.
The company is cutting spending to strengthen its finances, and its lenders also agreed to temporarily relax covenants, Currys said Thursday. The economic outlook is uncertain in all of its main markets with high inflation discouraging consumers from buying expensive electronics like TVs and game consoles. The stock dropped as much as 15%.
“Our market has been tough everywhere, with depressed demand, high inflation and unforgiving competition,” Chief Executive Officer Alex Baldock said. “Our long track record of success in the Nordics was brought to an abrupt halt.”
Adjusted profit before tax fell 38% to £119 million ($151 million) in the year through April as like-for-like sales fell 7%. Currys’ Nordic unit is the top consumer electronics retailer in the market, operating in countries including Norway, Sweden, Finland and Denmark.
Curry’s is “focusing on getting the Nordics back on track” after a “bad year” and the company is forecasting another tough year, Baldock said on a call with reporters.
Currys lowered its pretax profit guidance for the full year in December, citing heavy discounting from competitiors in Scandinavia and a tough trading environment at home in the UK due to the cost-of-living crisis.
(Updates with CEO comments in fifth paragraph)
