Shares in Currys PLC (LSE:CURY) surged 17% after the electrical products retailer spiced things up with a new £50 million share buyback programme, thanks to the completion of its triennial pension review and improved first-quarter trading.
Group like-for-like sales grew 3% in the 17 weeks to 30 August, accelerating from the 2% seen in the past full year, supported by strong demand in gaming, AI computing, coffee machines and cooling products.
A sharp improvement in the pension position was also reported, with the actuarial deficit reduced to £134 million from £403 million in 2022, meaning future contributions will fall to £13 million per year from 2026/27, compared with £78 million previously.
Analyst Wayne Brown at Panmure Liberum said "the year has started well", with LFLs above expectations and improving gross margins that are offsetting cost inflation, leaving guidance and forecasts relating to trading performance unchanged.
He said the completion of the pension review was "not only earlier than expected, but it is on much better terms than we had been expecting".
This both "materially" boosts cash flow from the next financial year but also provides the flexibility for the share buyback, he said.
Furthermore, Brown said the scale and timing of the buyback were also "both ahead of what we were hoping for", leading to him upgrading his earnings per share forecasts by 4% this year and up to 9% for the 2028 financial year.
"We see numerous catalysts that could drive further upgrades through the year but just on the buyback alone, even before we consider the new FCF profile – should drive the shares much higher," he proclaimed.
Indeed, the shares leapt to 136.3p in early trading on Thursday, their highest since late 2021.