Selling More, Keeping Little

Trading update for the 17 weeks to 29 August 2026, against the financial year to 2 May 2026. Currys reports in sterling; all per-share figures are in pence.

Currys is a specialty electricals retailer with two continuing divisions. UK & Ireland is roughly 59% of sales and 62% of divisional EBIT — earnings before interest and tax, the profit a division makes from trading before financing costs and tax. The Nordics is the rest.

Greece (Kotsovolos) was sold in April 2024 and is treated as discontinued throughout, so the two continuing divisions are what you compare across the years.

Alongside the shops and websites there is iD Mobile, the group's mobile service, which is up 16% to over 2.7m subscribers. The financial year ends in early May; 2025/26 ran to 2 May 2026.

The shape of the model matters more than the label. Group revenue is £9.25bn and profit on turnover was 1.5% in 2025/26. This is a very large revenue base earning a very thin return on it.

This is the trading update for the last seventeen weeks, and the first under the new Group Chief Executive, Fredrik Tønnesen. UK and Ireland like-for-like revenue rose 6%, which is pretty good, and the Nordics also saw a rise in revenue of 9%. Group like-for-like was 7%.

That is an acceleration on the 3% UK&I and 6% Nordics like-for-like they delivered across the whole of 2025/26, and the UK number came against what the company itself calls “broadly flat market conditions in the UK”.

Like-for-like revenue: update period vs full year

They reported that gross margins remained stable, which is positive. And they've kept guidance for the year unchanged, which in Currys' case means they remain “comfortable with market consensus”, with year-end net cash still expected to be well above the £100m target. Around £23m of the £50m buyback has been completed.

So an extremely light update from Currys, but the core parts are that revenue is growing, margins are staying stable, and guidance has remained unchanged.

The shares didn't reward it: they opened up at 155p and then drifted to around 148.8p, −1.9% on the 151.70p close, which reads as profit-taking after a strong run rather than any disappointment in the numbers.

Continuing operations, Greece treated as discontinued throughout

UK&I revenue has only grown 7% across three years, and its EBIT is still below the £170m it made in 2022/23, so the “strong” UK is really a story of margin repair and share gain in a market that isn't growing.

The Nordics, which were the problem child, have quadrupled EBIT off a lower revenue base. The Nordics EBIT margin is now around 2.5% against 2.9% in UK&I, and the group target is a minimum 3% in both, so there is still something to go for on margin, but it is incremental.

What the company has said, and when

Actual 2025/26 came in at adjusted PBT — profit before tax, adjusted to exclude one-off items — of £191m, statutory PBT of £153m, free cash flow of £157m and net cash of £176m.

Consensus of £199m for 2026/27 is therefore only 4% growth on a year that grew 18%, and the brokers are already talking about upgrades: Panmure Liberum reckons each 1% of group like-for-like is worth around £12.5m of profit, and Peel Hunt is looking for 1% to 3% upgrades, with the caveat that the first half is typically only 10% to 15% of full-year profit.

Interim results for the 26 weeks to 31 October 2026 are due on 17 December 2026.

The return on revenue

I come up with an expected EPS — earnings per share, the group's profit divided by the number of shares — for the full year of 13 pence per share. This is assuming that they hit pre-tax profits of £161.85m, assuming a 6% rise in full-year revenues.

£161.85m is essentially the statutory pre-tax profit of £153m grown 6%, so it is a statutory number, not an adjusted one; the adjusted equivalent that consensus works on is £199m.

Given these lacklustre movements in margins, and while revenue is positive, their general return on revenue is pretty low. Group gross margin has gone 16.9%, 17.6%, 17.6%, 18.4%, 18.6% and now 18.3% over six years, so the “stable” in the update is stable at a level that has stopped improving, and profit on turnover was 1.5% in 2025/26.

On £9.25bn of revenue, every 10 basis points of margin is £9m of profit, which is why the operational gearing cuts both ways and why the brokers' upgrade maths works.

Six-year record

The net borrowing line on the tear sheet is on an IFRS 16 basis including lease liabilities; the company's own net cash of £176m excludes them. The balance sheet is fine either way, and the shares in issue have come down from 1,133m to 1,022m through the buybacks, which is flattering EPS by around 10% on its own.

Revenue is growing, margins are stable and guidance is unchanged. That is the whole update. Some growth is there, it is share gain in a flat UK market and a genuine recovery in the Nordics, and the balance sheet and cash generation are good. But the business converts one and a half pence of every pound of sales into profit, the gross margin has stopped improving, and the earnings growth from here depends on Christmas and on small margin moves on a very large revenue base.

So I'm keeping EPS at 13 pence per share and a growth rate of only 2%.

This gives us an actual valuation of 120.64p, which is a −20.5% value opportunity against the 151.70p share price. Slightly below fair value, I would say. So the company is slightly overvalued, but not massively.

The tear sheet applies a valuation multiple of 8.0x, which comes out at a formula ratio of 9.3x the 13p EPS, against a market rating of 12.0x adjusted EPS. If the brokers are right and 2026/27 adjusted EPS lands nearer 15p, the same formula would value it at around 139p, still 8% below the price, so the conclusion doesn't change on the more generous numbers; it just becomes marginal rather than a clear reduce.

No valuation uplift or reduction is applied, so the formula valuation and the actual valuation are the same number. The risk factor is 20% and the dividend yield 1.50%.

VALUATION SNAPSHOT

The bull case here is real, and it is the brokers' case rather than mine.

• The upgrade maths: Panmure Liberum reckons each 1% of group like-for-like is worth around £12.5m of profit. Group like-for-like in the update was 7%. Peel Hunt is looking for 1% to 3% upgrades.
• Consensus looks beatable: £199m for 2026/27 is only 4% growth on a year that grew 18%, after a 17-week period that accelerated on both divisions.
• The Nordics still have margin to go for: around 2.5% EBIT margin against a group minimum target of 3%, on a division that has already gone from £26m to £97m of EBIT.
• The buyback keeps shrinking the count: shares in issue down from 1,133m to 1,022m, flattering EPS by around 10% on its own, with £27m of the £50m programme still to run.
• Cash and balance sheet: free cash flow of £157m, net cash of £176m and guidance for year-end net cash well above the £100m target.
• Operational gearing works upwards too: every 10 basis points of margin on £9.25bn is £9m. If Christmas is strong and the margin ticks up, the profit response is large.
• Timing: the first half is typically only 10% to 15% of full-year profit, so the December interims may say very little either way, and the company will only update guidance after Christmas trading.

• Gross margin starting to improve again: 18.3% is below the 18.6% of the prior year. A move back up through that level, rather than “stable”, is the single thing that would change the earnings arithmetic most.
• An upgrade that sticks after Christmas: guidance is only updated after Christmas trading. A genuine raise there, rather than broker anticipation of one, would move the earnings I am valuing.
• EPS landing nearer 15p and the price not following it: on the same formula that is about 139p, still 8% below the price — marginal rather than a clear reduce. It takes the earnings and a lower price together to make this interesting.
• The Nordics reaching the 3% EBIT margin target: from around 2.5% now, that is incremental but it is real profit on a £3.8bn revenue base.
• The price coming back toward 120.64p: nothing about the business has to change for the value opportunity to close — the shares have had a strong run, and that is most of the gap.