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Evening Standard
Evening Standard
Business
Daniel O'Boyle

Strong Currys sales raise prospect of new bids

Currys upped its profit guidance today after a stronger-than-expected start to 2024, in a move that appears to vindicate its board's decision to rebuff three takeover approaches from two different firms in the last month.

Chinese online retailer JD.com and American investment firm Elliott Partners looked to be in a bidding war for the high-street giant, but hopes of a takeover were dashed last week when both would-be buyers pulled out of the running. Elliott had made two bids, the second valuing Currys at £757 million, but the retailer’s board said both were too low. JD.com didn't submit a formal bid, but did make a preliminary approach.

But the boss of the dishwashers-to-laptops retailer says he’s “confident” in the future of the firm, which now looks set to stay on the London Stock Exchange. The retailer said sales in the “post-peak” period of January and February had been stronger than expected. It upped its profit guidance for the year to October 28 to £115 million.

In the UK and Ireland, a greater focus on repair services has allowed Currys to take bigger profit margins. The firm has struggled in the Nordics, where local firms have been able to offer cheaper prices, but it says there have been signs of a turnaround there.

CEO Alex Baldock said: “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.

Investec analysts Ben Hunt and Kate Calvert said: “We would not rule out further bid interest from new parties.”

The shares rose by 3.8% today to 58.8p today, right around the level they were at before JD announced it would not make an offer. That’s still about 25% higher than the share price before Elliott’s initial offer a month ago, suggesting investors also believe a new bid may still emerge, and values the firm at £660 million.

AJ Bell investment director Russ Mould said Baldock “has been able to stump up the goods to show that Currys is doing perfectly fine on its own and doesn’t need to be swallowed up by a third party”.

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