Currys PLC (LSE:CURY) has warned of price rises next year as a hike in employer national insurance and higher minimum wages fuel costs ahead.
Costs are set to increase by £32 million annually on the back of October’s Budget, the electronics retailer flagged in a trading update on Thursday.
“We will seek to mitigate as much of this as possible through cost-saving measures,” Currys said, citing the likes of automation, offshoring and outsourcing.
However, “some price rises are also inevitable,” the retailer added.
The warning adds to alarm bells from a host of firms over inflation and business failures after the Budget’s employer national insurance rate increase and threshold cut.
“Despite this unwelcome and material headwind, we remain confident,” Currys added.
Group revenue had grown by 1% to £3.9 billion over the first half of the year, the company reported, fuelled by a 6% increase within its UK and Irish business.
A £9 million adjusted pre-tax profit was recorded, against a £16 million loss over the first half of last year, while free cash flow climbed from £4 million to £50 million.
“We were well prepared for our peak trading period, with healthy stock and market-beating, best-ever deals that show our unmatched importance to suppliers,” chief executive Alex Baldock commented.
“We're trading in line with expectations. One highlight is rising demand for AI laptops, where we enjoy over 75% market share in the UK. AI is a trend with a lot further to run.”
He added the group expected “to grow profits and cashflow as promised this year”.