Currys scraps divi after £450m loss due to ‘depressed demand, high inflation and brutal competition’
Electric goods retailer Currys delivered a cost-of-living shock yesterday when it revealed a loss of £450m and said it was pressured by ‘depressed demand, high inflation and brutal competition’.
Boss Alex Baldock said he was “wary of optimism about consumer purchasing power,” despite bullish updates from other well-known brands.
Shares fell 9.7 percent, or 5.17 pence, to 48.28 pence, as the dividend was cut.
Slump: Currys shares fell 9.7%, or 5.17p, as it scrapped its dividend, revealing it had fallen to a loss of £450m
Baldock said smart speaker sales were one of the products that suffered – telling the BBC they had ‘fallen off a cliff’ – as consumers are ‘careful with their money’.
He added, “People aren’t as interested in Amazon Alexa as they used to be.”
Currys fell into the red as a result of a large accounting write-off dating back to the merger between Dixons and Carphone Warehouse that created the company in 2014.
However, profits in the UK and Ireland were up 45 per cent to £170m as savings offset falling sales.
The results for the year to April 29 came as consumers struggled with inflation and skyrocketing mortgages.
Sales at the company, which sells products ranging from laptops to washing machines, fell 6 percent overall and 8 percent in the UK and Ireland.
Bosses said households were putting off expensive purchases of electronic appliances, turning to more energy-efficient appliances like air fryers to ease painful energy bills.
Some loyal retailers have seen good sales this year and rival white goods retailer AO World said this week it had weathered the storm by selling products that consumers “need” rather than “want”, such as washing machines.
But Currys boss Baldock said: “Looking ahead, we are wary of any optimism about consumer purchasing power.”