Shares in Currys PLC (LSE:CURY) crackled 11% higher to 140.4p after the retailer said it expects annual profits to come in ahead of guidance after strong trading in both the UK and Nordic markets helped it gain market share.
The FTSE 250 electricals retailer said adjusted pre-tax profit for the year to 2 May is expected to be about £191 million, up 18% on the previous year and ahead of recently indicated guidance of £180-190 million.
Group like-for-like sales rose 4% for the full year, after continuing to grow at the same rate for the 16 weeks since the peak Christmas trading period.
Currys said it finished the year with net cash of more than £170 million after returning £74 million to shareholders.
Chief executive Alex Baldock, who handed in his notice in March, said recent trading had remained “very solid” despite concerns over the conflict in the Middle East.
“We’ve not yet seen an impact from the Middle East conflict, and our energy costs are well hedged for the coming year,” he said.
"This performance, combined with our strong balance sheet, means we are well positioned to navigate any market volatility ahead, tap into exciting growth opportunities and continue returning capital to shareholders.
Profit growth in the UK and Ireland was boosted by strong performances in services, business-to-business sales and newer categories, offsetting cost pressures. There was an 18% rise in iD Mobile subscribers.
The Nordics business delivered stronger profit growth, helped by demand for kitchens and computing components. Like-for-like sales in the region rose 6% over the year compared to 3% for the UK.
Analysts at Peel Hunt hailed the continued "strength in trading and an exceptionally strong year-end cash balance".
Cash was circa £50 million ahead of the broker's forecast, which "suggests scope for a much larger buyback than our £50 million forecast, given FCF generation is on track to exceed £140 million next year".
** UPDATE: Adds share price and broker comments **