Currys PLC Profit Guidance Exceeds Market Expectations After Strong Peak Trading

• Omnichannel sales grew strongly, with order & collect sales up +42% year on year.
• The region kept “hard-won margin and cost discipline” while growing profits and cash flow.

My take: this performance does the heavy lifting for the upgrade. There is some margin investment to support growth, but the emphasis on profit and cash discipline is reassuring.

Guidance raised: adjusted PBT ahead of consensus

Currys now expects Group adjusted profit before tax (PBT) of £180-190 million, +11-17% year on year and ahead of consensus expectations. The company notes consensus for FY 2025/26 adjusted PBT at £180 million. Within that, adjusted EBIT is expected to grow significantly in Nordics and be broadly stable in UK & Ireland.

Currys also expects to finish the year with net cash above its £100 million target, supported by stronger trading.

Capital returns: buyback and dividend

• A £50 million share buyback is underway. £30 million has been completed, with the remaining £20 million expected by 30 April 2026, subject to market conditions.
• Total cash returned to shareholders for the year is c. £75 million.
• The board has declared an interim dividend of 0.75p per share, payable on 28 January 2026 to shareholders on the register at 30 December 2025.

My take: pairing a buyback with an interim dividend signals confidence in cash generation and the balance sheet.

Cash flow and cost guidance: the plumbing that underpins the upgrade

Currys has set out clear guidance for the year on the big cash and cost lines. Highlights:

• Total interest expense: £60-65 million.
• Capital expenditure: around £90 million.
• Exceptional cash outflow: around £40 million.
• Pension contributions: £82 million, all made in H1.
• Cash dividend payments: £25 million across the 2024/25 final and £8 million for the 2025/26 interim dividend.
• Share buybacks: £50 million (as above).

Other technical cash flow items:

• Depreciation and amortisation: around £270 million (from around £265 million).
• Cash payments of leasing costs: around £260 million.
• Cash tax: around £15 million (from around £20 million).
• Cash interest: around £15 million.
• Share purchases to cover colleague share awards: around £25 million (from £15-20 million).

My take: the moving parts are well signposted. Exceptional cash outflows are still meaningful this year, and lease and D&A remain chunky – but management is guiding to improved free cash flow over time.

Longer-term targets: margin, cash, and capital discipline

• Adjusted EBIT margin of at least 3% in both UK & Ireland and Nordics.
• Annual capex below £100 million.
• Exceptional cash costs below £10 million by 2026/27.
• Working capital at least neutral, despite outflows expected from iD Mobile growth.
• Pension contributions to reduce to £13 million per annum for five years from 2026/27 and then cease.
• Maintain net cash of at least £100 million, pay required pension contributions, invest to grow, pay and grow the ordinary dividend, and return surplus capital via buybacks.

My take: if Currys delivers 3% adjusted EBIT margins in both regions while holding net cash above £100 million, the equity story is straightforward – steady comp growth, better mix, and surplus capital returned.

Why this update matters for shareholders

• Sales momentum is real: Group Peak LFL accelerated to +6%, and Nordics at +12% shows the recovery has legs.
• Quality of earnings is improving: more services, more credit adoption, more iD Mobile scale – all of which support higher margins and recurring revenue.
• Cash confidence: guidance for net cash above £100 million, a £50 million buyback, and a 0.75p interim dividend point to disciplined capital allocation.

Balanced against that, UK & Ireland still faces cost headwinds, Nordics growth includes some gross margin investment, and exceptional cash is still around £40 million this year. None of these are deal-breakers, but they are the knobs to watch if trading softens.

Jargon buster

• Like-for-like (LFL) sales: growth from stores and online operations that were open in both periods, stripping out closures and openings.
• Adjusted PBT/EBIT: profit measures excluding certain one-off or non-cash items to show underlying performance. EBIT is operating profit; PBT is profit before tax.
• Omnichannel: customers shopping across both online and stores. Typically higher conversion and better service.
• Credit adoption: the proportion of sales made using Currys’ customer finance.
• Order & collect: customers order online and collect in store.

Dates to circle

• Investor presentation and Q&A at 9:00am (Peak trading update).
• 25 February 2026 – Supply Chain and Service Operations tour, Newark.
• 10 March 2026 – Store tour with Group Chief Executive, Reading.
• 20 May 2026 – Next full year trading update.

Bottom line

This is an unequivocally positive update. Currys is growing sales, safeguarding margins, compounding recurring revenue, and returning cash. The guidance upgrade – with adjusted PBT of £180-190 million – leans on a resurgent Nordics and a healthier UK & Ireland mix. Keep an eye on cost headwinds and exceptional cash, but the direction of travel is clear and constructive.