Currys surges to three-year high on pensions cash boost and sales uptick

Currys PLC shares surged 17% to a three-year high following the announcement of a new £50 million share buyback program, underpinned by a significantly improved pension position and accelerating first-quarter trading. The company's actuarial deficit reduced sharply from £403 million to £134 million, cutting future annual contributions to £13 million from £78 million, while like-for-like sales grew 3%. This substantial cash flow boost and trading momentum are expected to drive further upgrades to earnings per share forecasts.

Analysis

Currys PLC (LSE:CURY) shares surged 17% to a three-year high of 136.3p, propelled by a new £50 million share buyback program and an encouraging first-quarter trading update. The capital return was facilitated by a significant de-risking of its pension scheme, where the actuarial deficit was reduced from £403 million to £134 million. This development is set to slash future annual cash contributions from £78 million to just £13 million starting in the 2026/27 fiscal year, materially improving the future free cash flow profile. Concurrently, the company demonstrated operational momentum with group like-for-like sales accelerating to 3% growth in the first 17 weeks of the year, up from 2% in the prior full year, driven by strong demand in gaming and AI computing. Analyst commentary highlighted that the pension review outcome and buyback timing exceeded expectations, prompting an immediate 4% upgrade to current-year EPS forecasts and a 9% lift for FY2028, suggesting the market is responding to a structural improvement in the company's financial health and capital allocation strategy.

Key Decisions for Investors

• Given the material improvement in the free cash flow outlook from FY27 and the immediate capital return via a buyback, investors should re-evaluate valuation models for Currys as the stock's re-rating may have further to run.
• Monitor future trading updates closely for any upward revision to full-year guidance, which has so far remained unchanged despite the accelerating like-for-like sales growth and improving gross margins.
• Assess the sustainability of the current 3% sales momentum, particularly its reliance on specific categories like gaming and AI computing, to determine if it reflects a durable shift in consumer demand or a temporary product-cycle-driven boost.