Currys PLC (LSE:CURY)has closed its financial year with a stronger-than-expected performance, raising both profit guidance and investor confidence in a business that is beginning to show real signs of structural improvement.
According to new research from Panmure Liberum, the electricals retailer has upgraded its full-year pre-tax profit forecast to £162 million, up from £159 million, marking a 26.5% increase from where expectations stood 12 months ago.
That comes alongside robust cash generation, improved trading, and growing signs that a long-awaited replacement cycle for tech products may be taking hold.
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The upgrade is not just about earnings. Currys now holds £180 million in cash on its balance sheet, more than double what analysts were forecasting a year ago.
Free cash flow has outpaced expectations thanks to disciplined cost control, tighter management of working capital, and a sharper focus on efficiency across its UK and international operations.
The company has already guided for a return to dividends in the 2026 financial year, with Panmure Liberum forecasting an initial outlay of around £25 million.
Even with this commitment factored in, cash balances are expected to keep rising, a sign that management’s strategy is beginning to deliver both operational and financial resilience.
Recent trading also points to renewed momentum. Panmure notes that post-peak sales growth has accelerated by two percentage points in both the UK and Nordic markets, suggesting that consumer demand is stabilising and may even be turning a corner.
The UK market remains the primary engine of profitability, but there is cautious optimism that the Nordics, still challenged by high household costs, could offer upside in the coming year as inflation cools and interest rates ease.
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One of the more striking points in the report is the prospect of a replacement cycle beginning to re-emerge, particularly in computing and gaming.
These categories saw a surge in sales during the pandemic and have since gone quiet, but there are now early signs that consumers are beginning to refresh older devices. Notably, Panmure does not yet include this in its base-case forecasts, suggesting there may be further room for upgrades as the trend takes hold.
That leaves the question of valuation. Currys shares have rallied sharply in recent months as the market has caught up with improving fundamentals. But Panmure argues that the stock still looks cheap.
On 11.4x estimated calendar year 2025 earnings and offering a 9% free cash flow yield, the shares trade well below historical averages and peer group multiples. For long-term investors, that combination of earnings growth, strong cash conversion and low valuation is rare.
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The balance of risks has shifted. Just a year ago, Currys faced questions over its international exposure, falling volumes and squeezed margins. Since then, it has quietly cut costs, strengthened the balance sheet and stabilised operations. There is more to do, especially in its Nordic division, but the building blocks for a sustainable recovery are now in place.
Private investors considering whether they have missed the rally may want to reconsider. The share price has moved, but the investment case still rests on a relatively conservative outlook.
Any further improvement in trading, cost efficiency or international performance could provide scope for additional upside. With dividends set to resume, the business generating cash, and the consumer outlook slowly improving, Currys is starting to look like one of the more compelling stories on the high street.
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