The CEO of Currys, Alex Baldock, is determined to maintain the company’s growth trajectory despite looming financial challenges.
- Currys faces a £32 million increase in tax bills starting April next year, impacting the company’s financial plans.
- National Insurance contributions and National Living Wage increases are among the new cost pressures for the retailer.
- Baldock reported a reduction in pre-tax losses and a slight sales increase despite tough economic conditions.
- The retailer is exploring further cost reductions and views price increases as a last resort.
Currys, a major player in the electrical retail sector, is bracing for significant financial challenges as it anticipates a £32 million rise in its tax obligations starting in April next year. In a recent statement, CEO Alex Baldock expressed his commitment to ensuring that the company’s growth remains unaffected by these pressures.
The anticipated financial strain is attributed to changes in employers’ National Insurance contributions and rises in the National Living Wage, coupled with inflation-based business rate increases. Baldock stated, “We’ve already got plans to deal with about half of these headwinds, and we’re working hard to get after the rest, which will inevitably mean further cost reduction.”
Despite these challenges, Currys showcased resilience by narrowing its pre-tax losses from £44 million to £10 million in the half-year leading to 26 October, with a modest sales increase of 1%, reaching £3.9 billion. “We’ve got growing momentum at Currys. We won’t allow this to be interrupted,” Baldock asserted.
However, Baldock cautioned that the added costs might lead to inevitable price increases, although he emphasised that this would be a last resort for the company. He acknowledged the complexity of the fiscal environment, noting, “It was an unhelpful budget for jobs, prices, investment and growth, but I also understand that the government have difficult decisions to make, and my job is to make sure that Currys is successful whoever’s in power.”
Currys is not alone in facing these new economic challenges, as other retailers, such as The Entertainer, also experience concerns over tax increases impacting their growth prospects and operational viability.
Currys remains steadfast in its strategy to weather upcoming financial challenges, with an eye on sustaining growth and operational resilience.
