Currys is “ticking the right boxes” according to Liberum, after the electrical retailer raised profit guidance.
Analysts were buoyed by the raised profit guidance, £100mln of guided net debt, which is at the bottom end of expectations, and a reduction to its fixed charge cover covenant to 1.5x from 1.75x until October 2024.
As a result, the balance sheet risk is now removed, which is “very positive news that should reassure the market.”
“The fact that the group’s consortium of nine banks all agreed to the new covenant threshold in relatively short order reflects their continued support,” said Liberum.
Performance in its Nordics business continued to cause problems, but the broker believes there are “some positive signs.”
Reporting from competitors in the region, Komplett and Verkkokauppa, suggest that the competitive environment has eased, with both showing improved gross margins, lower inventory levels and better pricing dynamics.
The target price was set at 135p.