Currys beats profit estimates on strong demand for mobile and computing products

By Raechel Thankam Job

(Reuters) -British electricals retailer Currys beat market expectations for annual adjusted pre-tax profit on Thursday, having raised its guidance three times over the year as it navigated cost pressures, driving its shares up nearly 10%.

Currys said its mobile business - which includes smartphones, gaming, computing and related services - remained one of its top-performing categories, with consumers rapidly adopting AI-powered products as prices decline.

"We're coming up to the COVID era replacement cycle for laptops. Five years in, people are replacing their laptops," CEO Alex Baldock said on a media call, noting that rising demand for AI and gaming was also fuelling growth for computing.

The retailer has also been expanding into grooming and pet care products, where it sees opportunities to gain market share.

Currys shares, which have risen nearly 25% this year, hit their highest level in over 3-1/2 years on Thursday.

"Every part of the business is heading in the right direction, the balance sheet has not been this strong in a decade", analysts at Panmure Liberum said in a note.

Last month, peer AO World posted record annual profit helped by a growing customer base.

Currys has been ramping up automation and moving more business processes to cheaper overseas locations, in addition to price hikes, to save almost 10 million pounds ($13.7 million) in annual costs.

Increases in employer social security contributions and minimum wages under the UK's Labour government, along with rising economic uncertainties, have prompted British companies to step up cost-saving measures to shore up profits.

Early trading in the current financial year has been in line with expectations, Currys said, adding that it remained comfortable with market consensus for the year ahead.

It posted adjusted pre-tax profit of 162 million pounds for the year ended May 3, above analysts' estimate of 159 million pounds, according to a company poll.

($1 = 0.7332 pounds)

(Reporting by Raechel Thankam Job in Bengaluru, additional reporting by Yamini Kalia; Editing by Rashmi Aich, Vijay Kishore and Emelia Sithole-Matarise)