REG - Currys PLC - Completion of Kotsovolos disposal

CurrysAnnouncement

10/04/2024 15:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240410:nRSJ0384Ka&default-theme=true

RNS Number : 0384K  Currys PLC  10 April 2024

Completion of Kotsovolos disposal

We help everyone enjoy amazing technology

 

Currys plc (Currys) is pleased to announce that it has completed the sale of
Dixons South East Europe A.E.V.E., the holding company of Currys' entire
Greece and Cyprus retail business, trading as Kotsovolos, to Public Power
Corporation S.A. for an enterprise value of €200 million (£175 million). As
anticipated, the cash proceeds received by Currys were £156 million (€179
million) after taking into account transaction and separation costs,
intercompany balances and cash in the business.

 

With the disposal of Kotsovolos, the Group's structure has been simplified and
Currys will continue to focus on its larger markets of the UK & Ireland
and the Nordics, whilst the strengthened balance sheet will increase
flexibility to invest in and grow the business, as well as improve shareholder
returns.

 

As previously announced, in the near term, it is the Board's intention to use
the net cash proceeds to reduce net debt and the Group expects to finish the
year in a net cash position.

 

Current year guidance

Group expectations for adjusted profit before tax is unchanged and is expected
to be at least £115m if Kotsovolos was fully consolidated for the year.

 

Following the disposal, the Group will present full year adjusted results on a
continuing operations basis. On this basis, adjusted profit before tax is
expected to be at least £105m. Please see below for full cashflow guidance on
a continuing operations basis.

 

Alex Baldock, Group Chief Executive

"The sale of Kotsovolos is an excellent outcome for Currys' shareholders. It
further strengthens the Group, while we continue to get the Nordics back on
track and keep up the UK&I's encouraging momentum. We continue to progress
well on both.

 

Kotsovolos is a fine business that we've been proud to own. I'd like to thank
every one of our Greek colleagues for everything they've done, and wish them
every future success."

 

Current year guidance

Guidance below is based on Greece being fully consolidated for the year. This
basis is consistent with previous guidance and excludes the cash proceeds from
the disposal of Kotsovolos.

 

 ●    Group adjusted profit before tax is expected to be at least £115m (unchanged)
 ●    Capital expenditure of around £65m (previously £70m)
 ●    Net exceptional cash costs around £50m (unchanged)
 ●    Pension contributions of £36m (unchanged)
 ●    Depreciation & amortisation of around £310m (unchanged)
 ●    Cash payments of leasing costs, debt & interest of around £270m
      (unchanged)
 ●    Cash interest of around £25m (previously £30m)
 ●    Cash tax payments of around £10m (unchanged)
 ●    Group to finish the year with net debt slightly worse than last year's closing
      position of £(97)m (previously better than last year's closing position). The
      reduction from previous guidance is due to the continued growth of iD Mobile,
      which creates a short term drag on net cash, but is a growing source of
      recurring, predictable revenue and cashflow

 

Following the disposal of Kotsovolos, the Group will report full year adjusted
results on a continuing operations basis (excluding Kotsovolos), the guidance
below is presented on this basis. Note this is not pro-forma guidance as
certain cashflow items, notably interest, will be impacted by the receipt of
proceeds.

 

 ●    Group adjusted profit before tax is expected to be at least £105m
 ●    Capital expenditure of around £50m
 ●    Net exceptional cash costs of around £50m
 ●    Pension contributions of £36m
 ●    Depreciation & amortisation of around £280m
 ●    Cash payments of leasing costs, debt & interest of around £250m
 ●    Cash interest of around £20m
 ●    Cash tax payments of around £10m
 ●    Group to finish the year in a net cash position

 

Longer term guidance

 ●    Group continuing to target at least 3.0% adjusted EBIT margin with focus on
      sustainable free cash flow generation
 ●    Exceptional cash costs expected to fall significantly from 2024/25 onwards
 ●    Scheduled pension contributions will rise to £50m in 2024/25 and to £78m for
      the following three years before a final payment of £43m in 2028/29 within
      the current agreement. Pension contributions will cease when the actuarial
      deficit reaches zero

 

Next scheduled announcement

The Group is scheduled to publish a pre-close full year trading update on
Tuesday 14 May 2024.

 

For further enquiries

 Dan Homan                  Investor Relations        +44 (0)7401 400442
 Carla Fabiano              Investor Relations        +44 (0)7460 944523
 Toby Bates                 Corporate Communications  +44 (0)7841 037946
 Tim Danaher, Sofie Brewis  Brunswick Group           +44 (0)2074 045959

 

Further Information

Information on Currys plc is available at www.currysplc.com
(http://www.currysplc.com)

Follow us on X, formerly known as Twitter: @currysplc

 

About Currys plc

Currys plc is a leading omnichannel retailer of technology products and
services, operating online and through 720 stores in 6 countries. We Help
Everyone Enjoy Amazing Technology, however they choose to shop with us. In the
UK & Ireland we trade as Currys and operate our own mobile virtual
network, iD Mobile. In the Nordics we trade under the Elkjøp brand. We are
the market leader in these markets, employing almost 25,000 capable and
committed colleagues.

 

Our full range of services and support makes it easy for our customers to
discover, choose, afford and enjoy the right technology for them, throughout
their lives. The Group's operations include state-of-the-art repair facilities
in Newark, UK, a sourcing office in Hong Kong and an extensive distribution
network, enabling fast and efficient delivery to stores and homes. Our vision,
We Help Everyone Enjoy Amazing Technology, has a powerful social purpose at
its heart. We believe in the power of technology to improve lives, help people
stay connected, productive, healthy, and entertained.

 

We're here to help everyone enjoy those benefits and with our scale and
expertise, we are uniquely placed to do so. We're a leader in giving
technology a longer life through repair, recycling and reuse. We're reducing
our impact on the environment in our operations and our wider value chain and
we will achieve net zero emissions by 2040. We offer customers products that
help them save energy, reduce waste and save water, and we partner with
charitable organisations to bring the benefits of amazing technology to those
who might otherwise be excluded.

 

Certain statements made in this announcement are forward-looking. Such
statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from any expected future events or results referred to in these
forward-looking statements. Unless otherwise required by applicable laws,
regulations or accounting standards, we do not undertake any obligation to
update or revise any forward-looking statements, whether as a result of new
information, future developments or otherwise. Information contained on the
Currys plc website or the X, formerly known as Twitter, feed does not form
part of this announcement and should not be relied on as such.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DISSFWFSSELSESL