Currys, the consumer electronics retailer, has joined the chorus of companies highlighting the detrimental financial impact of Labour's tax policies on its operations. In its half-yearly report covering up to 26 October 2024, the company today conveyed a forecasted hit of up to £32m due to recent tax policy adjustments.
The breakdown of this figure includes a £9m burden from hikes in the National Living Wage, an additional £12m for the group’s National Insurance contributions, £2m from inflation-triggered rises in business rate taxes, and potentially £9m due to increased charges from suppliers, as reported by .
The management noted the intention to mitigate these cost pressures through various savings strategies such as "process improvement, automation, offshoring, outsourcing and overhead efficiencies," yet admitted some price increases "would be inevitable."
For the six months ending 26 October, Currys reported a 52 per cent increase in adjusted earnings before interest and tax, which rose to £41m. Group free cash flow during this period reached £50m, reflecting an increase of £46m.
On a like-for-like basis, overall revenue climbed two per cent, and the reporting period concluded with Currys boasting a net cash balance of £107m.
CEO Alex Baldock expressed optimism about the retailer's trajectory, stating: "We’re very encouraged by our progress. Currys’ performance continues to strengthen, with profits and cashflow growing significantly, and the group’s balance sheet is strong."
"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. We’re trading in line with expectations. One highlight is rising demand for AI laptops, where we enjoy over 75 per cent market share in the º£½ÇÊÓƵ. AI is a trend with a lot further to run."
"Looking ahead, we’re confident of continuing our progress, and expect to grow profits and cashflow as promised this year. This is despite new and unwelcome headwinds from º£½ÇÊÓƵ government policy. These will add cost quickly and materially, depress investment and hiring, boost automation and offshoring, and make some price rises inevitable."
"Still, there’s plenty we can control, including mitigating much of this headwind. We’ll keep colleague engagement world class, customer satisfaction increasing, cashflow growing for shareholders, and playing an ever-bigger role in society. We have growing momentum at Currys. As ever, I’m hugely grateful to the tens of thousands of colleagues whose brilliant work makes all this possible, and who are building this ever-stronger Currys."
