Currys Stock

Good morning, everybody. So we're pretty proud of the results that we're going to present today. What they show is a strong and strengthening performance by the group. It's founded in the Nordics by us making sure that we're the beneficiary of a rapidly recovering market. And in the U.K., another year of excellent and strengthening performance. And all this comes, as you'll see today, from a strategy that we've followed consistently and that we believe is clearly working. There is a lot more left in the tank. We're going to cover that today as well, not least under new leadership, and you'll be in good hands with Fredrik and his world-class team, one of whom I will hand over to now.

Thank you, Alex. Good morning, everyone. Let me start with some highlights. So as you will have seen for last year, we had good top line growth, up 4% on a like-for-like basis. That helps us grow our profit before tax to GBP 191 million, up 18% year-on-year. In turn, that drove our free cash flow to GBP 157 million, meaning we finished the year with GBP 176 million of net cash. Our adjusted earnings per share increased by 19% to 13.4p. And today, we are proposing a full year dividend of 3p, which is double the level of last year. Starting at the top line, our sales continue to improve. So within the U.K., as you can see, it's the second year in a row that we've enjoyed like-for-like growth and market share growth. And in the Nordics, a spectacular year last year, up 6% overall and double-digit growth over the peak period.

Going into each of our 2 markets, starting off with the U.K. and Ireland. As I said, strong top line growth, up 3% on a like-for-like basis in the U.K. And I'm pleased to say that our most important sales, our recurring service revenue increased by even more at 7%. That helps us drive our adjusted EBIT margins up by GBP 5 million to GBP 158 million, keeping our EBIT margin percent flat at 2.9%. Operating cash flows increased by GBP 6 million, and our segmental free cash flow increased by GBP 10 million. And that's despite the fact that we invested GBP 27 million in working capital to drive our iD Mobile proposition forward.

In terms of our EBIT margin, as I said, overall flat at 2.9%. And within that, our gross margin was up by 20 basis points. That's the fourth year in a row that we've seen our gross margin step forward, whilst our operating expense ratio declined by 20 basis points. In terms of the drivers of gross margin, no surprises, exactly the same activity in terms of solution selling, driving services and not chasing less profitable sales. And that was critical because it allowed us to offset a big chunk of the government-imposed headwinds. You might remember, we called out last year GBP 32 million of national insurance and living wage headwinds. And certainly, those that appear within gross margin, within our supply chain and service, we've been able to offset.

From an operating expense to sales ratio, as I say, that went backwards by 20 basis points because the same thing, the living wage, national insurance impact on our store colleagues and on our central overheads. And although we achieved significant cost savings, it wasn't enough to offset those headwinds. Moving on to the Nordics. Our Nordics performance was even stronger. Like-for-like, as I've already described, was plus 6%, so very, very strong. And again, our recurring services revenue was up 8%. That drove our adjusted EBIT within the Nordics up by 26%, and our adjusted EBIT margins increased by 40 basis points. Our operating cash flow also increased by 26% and our segmental free cash flow improved by GBP 4 million.

In terms of our EBIT margin in the Nordics, as I said, a 40 basis points improvement overall. If you were to break that down, there's a 60 basis points backward step within our gross margin and 100 basis points improvement within our operating expenses. Now it's really important to drill into this gross margin because on the face of it, it might look like we were losing some of the disciplines that are hard won in terms of focus on margin. And that isn't the case. Pretty much all of that 60 basis points, in fact, 50 basis points of the 60 basis points was caused by foreign exchange.

Our Nordic business buys pretty much all of their products in euros and dollars. And our policy is that our Nordic business forward hedge FX on 80% of those purchases up to 6 months in advance. Now what we saw over the course of the last year was an incredible strengthening of the NOK, which meant that pretty much all of those contracts were under water. And IFRS 9 requires us to post that loss through the same line as the underlying asset, which is why there was a big negative in gross margin.

In terms of operating expenses, the Nordics, again, did a fabulous job at offsetting all inflation with cost savings. So on a local currency basis, the costs in our Nordic business were broadly flat, which means we've achieved that given significant top line growth, which means that operational leverage improved the ratio, as you can see. This is a slide that we've shown the last couple of presentations, and we've used it to demonstrate, number one, the progress we're making within our Nordic business on progression on EBIT margin. The other reason this slide has been important in the last couple of years has been the weakness of the NOK. And therefore, the fact that on a local basis, we've seen good progression in profit, but that's looked understated when you've looked at it from a GBP perspective.

Now the great news in the year that's just finished is that not only has local profits increased, but with the strengthening of the NOK, we've had a double whammy. So a really, really good step forward within Nordic profits.

Moving on to cash. Another great year for free cash flow that stepped forward by GBP 8 million to GBP 157 million. You can see the vast majority of that came through operating cash flow, so higher cash profit, up GBP 34 million. Our CapEx was broadly flat at GBP 79 million as we've maintained the strong discipline, making sure that every pound of CapEx we spend is generating a good return. Adjusting items also flat. So these adjusting items, as you know, are focused on nonoperating properties and also restructuring costs. This is -- the year that we're presenting is the final year where the number will be this large. And going forward, and I'll show you shortly, we expect that number to be significantly lower.

Cash tax is GBP 7 million. That is a surprisingly low number given our profits and the explanation is brought forward losses. Cash interest increased slightly, and that's because of lower average cash holdings during the year. And finally, working capital. Working capital was an outflow of GBP 3 million in the year. But again, let me repeat what I said earlier. That's despite the fact that we invested GBP 27 million of working capital, growing our iD Mobile business. Outside of that, actually, our working capital improved by GBP 24 million through improving stock turns, management of payment days and reducing debt.

What did we do with GBP 157 million? Well, we made GBP 82 million contribution to the pension scheme. So this was the last big payment to the pension scheme as the deficit approaches zero. And I'll show you shortly that, that number going forward will be significantly lower. We made GBP 74 million of payments to shareholders with GBP 24 million of dividend and GBP 50 million of share buyback. And we also made GBP 23 million of buyback for our employee benefit trust. So this is to pay for the long-term incentive and other colleague share awards. And overall, we finished the year with GBP 176 million of cash.

And you'll recognize this slide. This reflects the strength of our balance sheet, and we have continued to improve the position. So this brings together our level of debt and the pension deficit. And you can see as our pension deficit is now just GBP 6 million, it means that we are in a net cash position of GBP 170 million. Moving on to outlook. Obviously, it's very early in the year, but during the first couple of periods, we're pleased to say that our trading has been very solid. And although there remains macro uncertainty, the group is comfortable that we're going to achieve market consensus.

Some headline numbers to help with your modeling. We expect total interest expense to be broadly flat year-on-year between GBP 60 million and GBP 65 million. We're calling out an increase in capital expenditure, an extra GBP 20 million to GBP 95 million. But again, we won't be giving up any of those disciplines in terms of the quality of that CapEx. I reflected earlier that we expect our exceptional cash flows to fall significantly, and we're calling that going from GBP 35 million down to GBP 15 million in this new financial year. The annual pension contribution contractually drops from GBP 82 million down to GBP 13 million. And we're expecting to make GBP 85 million returns to shareholders with the higher cash dividend costing GBP 35 million and repeating the share buyback, so a further GBP 50 million of buyback.

Now you'll see that those 2 combined add up to GBP 85 million. Part of the contracts we have with our pension scheme is any contributions over GBP 80 million, we have to match them. And that's why we're calling out an extra GBP 5 million of pension payments during the course of this year. Now that will fall off future payments towards the end of that contract period.

In terms of our medium-term objectives, no change. Our target is to get to at least 3% EBIT margins. And as you can see, the U.K. has delivered 2.9% again. So we are virtually there. From a Nordic perspective, good progression now for 3 years in a row and moving back to where we were pre-pandemic. And finally, just worth touching on our capital allocation priorities, which at a headline level are unchanged. We will continue to maintain a prudent balance sheet with a year-end net cash of at least GBP 100 million. We will pay the required pension contribution. And as I say, that is contracted now at a much, much lower number. We will then invest to grow in the business, to grow profits and grow cash flow. As I showed you, our expectation is that, that CapEx number will be less than GBP 100 million, but we're not constrained by that. And if we see opportunities for us to invest, to be able to drive profitable or cash flow accretive activity that's in line with our investment criteria, we will do that.

And we'll also look at M&A opportunities, infill M&A opportunities to support and deliver upside to some of our key growth areas. Pay and grow our ordinary dividend. As you saw, we are proposing a 4p total dividend, which equates to a 4.5x cover. And today, we're calling out that we expect to reduce that to 4x cover in '26-'27. Finally, surplus cash will be returned to shareholders. And as I say, we're calling out GBP 50 million of new buybacks that will start from today.

So that's for me. Let me hand back to Alex.

Thanks, Bruce. So the story today is one of the Currys' improving its trajectory on every dimension that matters, whether we're talking about the U.K. or the Nordics, on colleague, customer or financial metrics, on sales, market share, margin, cost efficiency, cash conversion, the health of the balance sheet, electrical and mobile products and services on every dimension that you care to mention, the trajectory is good and is improving. There's one in particular I want to draw out and emphasize upfront today, which is the top line growth and the fact that we've been able to return this business without much help from the market to sustainable top line growth. And in the U.K., the picture you see here is one of us almost trebling the total accessible market that we face.

We have been able to continue to eke out share improvements in our core markets, 60 basis points of growth to show for that. But also, we've been growing this market, as I say, growing it in terms of who we sell to, small- to medium-sized enterprises as well as to consumers as well as what we sell, whether it's the new and emerging categories and solutions and services. These are areas that are adjacent where we've got a great deal or indeed all of what it takes to win, where we start with a lower market share and therefore, have accordingly higher headroom for growth and growing we are, as you see, in all of these areas that we flagged for growth, we are growing at healthy double digits, and it's making a material contribution to the strong and strengthening performance that we've seen today, both in the U.K. and also in the Nordics.

Let's start with what we sell, the new and the growth categories that we're facing. And part of that is new and emerging tech coming from our core categories, so whether it's wearables like the Oura Ring or whether it's glasses like the meta or robots, robot vacuums are flying off the shelves. That's all going well. But it's also adjacent categories, whether it's e-mobility or pet tech, seasonal and impulse categories that allow us to take full advantage of the traffic coming into our sites and our stores. Batteries sounds unglamorous, but a really important contributor for us. And in the Nordics, of course, we have a strong and strengthening kitchens business as well. All of these are in healthy growth, 50% plus and as I say, making a material contribution to the sales and the share growth that you've seen, as is our progress in B2B.

Small-to-medium size businesses share many of the characteristics of our core consumers. Their needs are very similar, and they have, in most cases, the same products, suppliers, channels, services and solutions, supply chain and service operations. We can lean on the core machine in order to serve this adjacent market. And what we do need that's slightly different, we have built, whether it's leadership, whether it's specialism in specialist colleagues in our stores, a tweaked online customer experience or account management skills, those we have built, and we have the strong growth to show for it, 16% up off a big base in the Nordics, 20% up in the U.K. All of this gives us confidence to commit to significant further growth. We're going to at least double the size of the U.K. business in B2B over the next 3 years off a bigger base, the Nordics will grow by at least 40% over the next 4. Big and growing in B2B.

And that's one of the reasons these large accessible sources of new growth where we start with lower headroom, but we've got every right to win, and we're showing strong double-digit growth as proof of that. That's one of the reasons to be confident in the future. But there are many others. And let's zoom back out to the strategy that we've been following in recent years, a strategy that we believe is clearly working. And it starts with the customer. That customer finds the stuff that we sell, tech, exciting, sure, but confusing and expensive, and they need help. They need help to discover, choose, afford and enjoy to the full that technology through the life. And those are needs that we, as the #1, the specialist, the omnichannel at scale and the services provider as well as a retailer, we at Currys are best equipped to provide and so we are.

And we do that by starting with the colleagues. It's very difficult for the experience of the customer to be better than that of the colleague in our space. So we want colleagues who know what they're doing and who want to be here. They, in turn, make us easy to shop for customers. On those foundations, we get more customers to want to keep coming back, customers for life, and that allows us to grow profits and cash. And this strategy has seen us maintain our #1 spot in all the markets that we operate in. We had a bit of a dip, 30 basis points market share decline in the Nordics in the year just passed, but off a very high base, still 28% and way larger than the #2. In the U.K., we saw a significant step forward, 600 basis points of market share improvement in the U.K. And that actually understates our progress.

If you look on the left-hand side here, there's the core market in the, I don't know, orange, red color. And above that, there's the sales that we report as -- it is part of our core market, so-called Currys and core market sales. But our like-for-likes are higher still, as you see. So our market share gains, our stated market share gains understate the true performance improvement of the business because so much of our growth, as we've talked about, is coming from outside of our core areas, coming from new areas. So good, healthy, sustainable top line growth.

I mentioned capable and committed colleagues. It all starts with them. So it's good that we've seen another good year of progress on colleague engagement, up 1% in both of our markets. And in the U.K., we're in the top 3% now. of companies worldwide when it comes to colleague engagement. That's not just our opinion, it's others as well. We've gone from relatively low to top of all 18 major U.K. retailers on Glassdoor as the best place to work, the first retailer to crack 4.0 and first time out in the Sunday Times Best Places to Work, we came top amongst U.K. retailers. And this has real commercial value. It's one of the drivers of improved customer satisfaction as well. Happy colleagues make for happy customers.

And as you see, another year of progress. The Nordics storming ahead to another couple of points to 65 on NPS, which is creating some healthy internal competition in the group as U.K. colleagues are not happy to be 9 points lagging at 56 but still good progress in the U.K., 700 basis points of improvement year on 4. And again, not just our measures, but Trustpilot, the external measure you could all track has seen us in the last 5 years go from poor to excellent from 2.7 to 4.4.

So good progress on customer satisfaction as well. And happy colleagues and happy customers then allow us to make us easier to shop for our customers, too. And that starts with retail fundamentals. Every retailer to be successful, will be well advised to pay attention to having the right range, making sure it's available when the customer wants to buy it, having the right price and having an easy experience in the channels and after the sale. And that we've worked on really hard, and we've talked before about range areas like new categories and about an easy customer experience. We've talked before about how we're showing customer satisfaction improvements at every stage of the journey.

Today, I want to focus on availability. And availability, as you know, is the single biggest driver of lost sales for a retailer. If you're not available, the customer can't buy it. Conversely, if you improve availability, everything else being equal, you will always drive improved sales. Now Currys started from a high and improving level of availability, but we saw an opportunity for improvement. We saw up to 1/3 of customers coming into our stores and leaving -- intending to buy, but leaving empty handed in large part because of availability constraints and something like 28% of our products making it to the store, we're not making it to the shelf. Hence, the big focus on on-shelf availability over the past year. And that's been better analytics and better process at the heart of that. Better analytics, we've got better at zeroing in on so-called AA, AAA product, our highest priority product where -- which is fastest moving, which is most highest selling and highest margin for us.

So the most important product for the customer and for us, we've prioritized for ranging and availability, but better process as well. We've gone from well meaning but not helpful covering of gaps in the store shelves. Colleagues have had focused on making us look as if we had better availability by covering up any gaps. But that covered up real gaps in availability. So we've moved from making us look available to actually being available by a focus on better replenishment, in particular, the daily gap scanning process. All of this has had a happy consequences with an over 60%, 6-0 percent improvement in on-shelf availability in the pilot stores. So some really good improvements off an already strong base when it comes to availability. And availability, by the way, matters particularly in store. It matters particularly for -- when the customer wants something urgently or whether they're picking it up on order and collect.

Stores obviously part of an omnichannel model that we believe gives us a priceless advantage in this market. The customers prefer to shop through both. Still over 60% of customer journeys involve a store purchase. We have both channels at scale in ways that no competitor has. And so it's on us to make the most of that. The fact that customers do prefer omnichannel is also backed up on the right-hand side here. Our omnichannel sales, for example, online, in-store or order and collect, our omnichannel sales are growing faster than our sales overall, grew 9% in the U.K., up to fully 1/3 of our sales in the last year. This is a real advantage that we've got that we intend to continue making more of. Omnichannel includes both stores and online, and we've invested heavily in the year just passed, and we'll continue to invest in improving both channels.

In stores, it's tools and processes have improved. Processes like Sales Floor Leader, which has connected more customers with the right colleague faster, but better tools like headsets that get the right colleague to the right customer faster and also improve security and tools like electronic shelf edge labeling, a Nordics idea that we copied with pride in the U.K. and is now rolled out to all U.K. stores with good consequences. It's a better customer experience. It allows more nimble pricing and it takes away cost. I mean, a significant multimillion pound benefit per annum from that. I think it took out 138,000 hours of the colleagues' most hated task, which is paper ticketing which makes colleagues happier and makes us happier as well.

So that's -- all of these improvements in -- that we're making in our stores are driving good consequences for market share. So another good year for conversion, 50 basis points up overall weighted across the group in stores and another good year in driving sales growth and market share gains in our stores. Not just stores where we're investing, we're also investing online, and we'll continue to make the improvements that we need there, whether it's search, navigation, filtering, product comparison, the more powerful tool deployed there, more reviews, better recommendations, a faster checkout, more payment options, better delivery options and performance. All of these things have stepped on in the year just passed with good consequences, 40 basis points up for online conversion.

Worth saying, in both online and stores, we gained market share. last year. So we're big and improving online. That makes us easy to shop. And on those strong foundations, we can, in turn, build more customers for life, customers who want to keep coming back to shop again and again at Currys. And building stickier and more valuable customer relationships as we want to do, does start with knowing those customers, data in other words. And we've had another year of big advances here. Another step on in Nordics customer club numbers, the numbers -- precise numbers to be confirmed, but we've got a very large consented base of customers in the Nordics now with the top tech stack that we have there and the data and analytics capabilities. This is now enabling us to start personalization at scale. And that's pretty exciting, and we should get to at least 5% of Nordic sales over the next 3 years, driven by personalization at scale.

And the more personalized you are in your appeal to customers, the more relevant you are and the more you will sell. Same true in the U.K., where we've got some pretty big consented customer bases in the U.K., too, whether it's the 2.6 million iD customers, 2.7 million in credit, 8.7 million Perks members or 11.6 million care and repair customers. We've got large data sets of consented customers, and we have now brought them together. The fabled single customer view is now a reality. We can now much more easily segment and target customers based off who they are, what they've bought, when and how they bought it, their attitudes and their behaviors. We can do things that the marketing techies talk about building custom audiences, which is basically taking these segments, cut any which way of customers, pushing them out to the ad platforms in minutes, whereas previously, it would take days and weeks if it was possible at all.

This allows for much greater marketing efficiency and effectiveness. It also, by the way, enables significantly better third-party monetization. Retail media is still a big opportunity largely ahead of this business, but we've got the foundations in place now to make something pretty interesting of it. And it's with that data, it's with those foundations of knowing our customers better that we're able to provide better, more targeted solutions and services to those customers. And we do want to continue providing more complete solutions to customers. When we sell to the customer everything they need - products, accessories, services, the customer is happier because they're getting everything they need and they're getting good value for money if they buy it all at once. We're happier too because it's a significantly more valuable sales.

So it's good that adoption of solutions is growing. It's more than doubled in both markets. We had a dip in the Nordics last year. That's due to in FY '25, an unsustainable spike in screen protection sales, which we are unable to sustain into '26, but still healthy long-term growth trajectory, more than doubled the rate of adoption in the Nordics just as we have in the U.K. to over 40% -- 43% and counting. These numbers look great, but there is more in the tank. To take the U.K. example, 43% looks like a lot. But if you look at complete solutions, if you look at the percentage of sales where we've sold the customer literally everything that's relevant that they could have bought, that's 0.3% of sales. So there is a lot -- and by the way, that's very valuable because those complete solutions come at 8x the margin of a product-only sale.

So there's a lot of value still on the table here at selling more complete solutions, but we should draw comfort from the rate of progress. Important to complete solutions are the services that we offer to customers that allow them to get the most out of their technology to enjoy it to the full. And we've had another good year of growth on those, starting with the credit that helps customers afford sometimes expensive technology. Credit customers, our credit customers are happier, 12 points higher NPS, and we are happier when customers use flexpay as well. They spend more, they come back and shop more frequently, and they have twice the lifetime value of a noncredit customer. They also, by the way, make a meaningful and helpful double-digit straight to the bottom line profit contribution from commissions and also from cost avoidance.

Every time a customer uses flexpay, they're not using a credit card. So it means that we avoid that commission expense. Making a meaningful double-digit million pound profit contribution in its own right and being a significant enabler of retail sales, credit makes everyone happy. And so it's good when we grow it as we are. And as you can see here, healthy growth in credit sales and in credit numbers of customers. And the adoption rate now is not far short of 24%, not far short of 24%. So nearly getting on for 1/4 of Currys' sales are sold on our own flexpay product. We've shown great growth in recent years, much more to come. We're not happy with it starting with the 2. Why should we be? So that's the credit that helps customers afford technology, that's in growth and then helping them get started with their technology, whether it's setup, data transfer or installation, which is illustrated on the slide here. That's all nicely in growth as well. 46% getting on for of big box sales in the Nordics are installed, which is good for the customers and good for us because it's a profitable service.

Catching up in the U.K., but still that number is too low. It's nice that we've grown 700 basis points of adoption on installation over recent years, but there's still a lot more in the tank on that, as you see. And the same with connectivity, another good year, 18% up, I think, in subscriber numbers for iD Mobile in the year just passed, up to 2.6 million and accounting, driven by very high levels of adoption of our app, which is going down well with customers, and you see that in the Trustpilot scores, which are very high for iD. really good source of sustainable free cash flow and profitability for us is iD, and there's a lot more in the tank for that, too.

Likewise, finally, for repairs, arguably the single most important service for customers. It gives their product longer life. It's good for their pocket. It's good for the planet, and it's good for our profits, too. So it's good that it is in growth. And as you see here, it is. Important here, there's a moat around this business. Repairing at this sort of scale leans on capabilities that we have and that no one else is realistically ever going to develop, capabilities like Europe's largest technology repair center in Newark with over 1,000 colleagues repairing or processing, getting on for 3 million devices a year. So good growth across all of the services that power our solutions, and they have another benefit, too. is that to a large extent, those revenues are recurring. And we're now -- we've now gone over 30%, 3-0 of our U.K. revenues that are recurring, building welcome stabilizers into the P&L and making us still less dependent on the vagaries of the U.K. consumer. So nice progress, but still significantly further to go.

So that's on the -- that's on building -- making us easier to shop for customers and then building more customers for life on the back of that. All of this, of course, is in service of more sustainable profit and free cash flow growth. We've talked in the past about -- and Bruce just mentioned the margin and the cost disciplines that have been so important to us, and so they are. We're not going to relax on the margin disciplines that see us monetize an ever-improving customer experience that keep our supply chain and service operations costs down that make us focus on end-to-end profitability. No letup on any of that. Likewise, we've heard about top line growth earlier on. But on costs, there's going to be no letup on any of that either. I touched on the customer and the colleague benefits of electronic shelf edge labeling.

Let's not forget the financial benefits, GBP 6 million a year saved from those 138,000 hours right first time, which is, again, good for customers when we turn up on time with the right stuff and can install it there and then, but it's also good for Currys because we avoid the cost of rework, a GBP 6 million a year cost benefit there. And the cloud migration that we've undergone in the U.K., painful at times, but worth it because it's getting us to an over GBP 10 million a year cost -- annual cost benefit. So plenty to go for on costs as we continue the disciplines there. And that's another good reason to believe in a sustainable future for this business, as is this man behind me. So I've worked with Fredrik very closely for the past 8 years. He's an outstanding leader and colleague. He's got a great track record built up over many roles in many years, most recently in leading the quite remarkable transformation in fortunes in our Nordics business over the past 3 years, where he's more than tripled profits.

And I commend him to you and you'll get to know him really well. And you will see what I've come to see is the quality that he brings to the role. And of course, he's got a world-class team to join too. And between him and that world-class team, I have no doubt that we will be able to continue on the trajectory that we're on, a trajectory, let's not forget, that is seeing this business progress on every measure that matters, whether it's colleague, customer or financial, top or bottom line, products or services, electrical or mobile, U.K. and Nordics. This business is tracking well. And it's on Fredrik and his world-class team to make sure that we maintain and accelerate that trajectory.

Thank you very much. And with that, I think Dan is going to compile your questions.

Thank you. Good morning all. Now time for questions. If you raise your hand, we'll bring a mic to you. And if we could limit it to 2 questions per analyst, we can always come back around if that is not enough. Maybe start with Monique over here.

And thanks, Alex, for your work over the years. You'll be missed. The first question I just had is whether we could touch a bit on the U.K. competitive environment, conscious that JD has launched Joybuy and they have plans, obviously, to acquire someone else in the space, although not directly competing from a geographic perspective at the moment. So do you think it's going to be hard to eke out another 60 bps of market share gains in the U.K. this year?

So we fully expect JD to become a serious competitor. I mean we try to exist in the state of healthy paranoia, which I think is appropriate for a viciously competitive market like ours. But Monique, this is nothing new. I mean we've had Amazon snapping at our heels as the #2 in this market for the last 30 years, trying to take our slot. There are no slouches. And here, we still are market leader, #1 and extending our lead and showing these strong and strengthening results that we're posting today. So of course, we'll take every competitor seriously. But there's nothing new in a hypercompetitive market.

And the advantages that we've got and with plenty more in the tank to build on those, advantages that stem from having the best colleagues who are most engaged, building more satisfaction in our customer base, helping those customers be ever easier to shop, shop how they want to shop, omnichannel, which nobody else, Joybuy or anyone else has got at scale and helping them with the solutions that are valuable to the customer as well as to us that nobody else can provide. If we carry on doing what we're doing and we stick with the strategy that's working and continue to build on that, I think it's for competitors to worry about Currys rather than the other way around.

Excellent. And the second question might be more for Bruce. Just trying to understand, conscious no guidance being given at the moment. But just any moving parts you can give us on gross margin evolution over the year, particularly when we think about the potential for chip shortages and what that might mean for pricing?

Sorry, you're talking about going forward, yes.

Going forward, yes.

Yes. I mean, as you say, we're not giving any guidance going forward. Maybe a couple of points that we've made in the past. First of all, in terms of headwinds, which impact gross margin as well as bottom line. We talked about the GBP 32 million of headwinds from the government last year. That equivalent number in the year ahead is just GBP 5 million. It's GBP 5 million. It's not just 5 million, it's GBP 5 million within a living wage of roughly GBP 10, and we get a small rate improvement. So that's going to help us. And I guess the other key point is we're not going to give up any of the disciplines we've had in terms of not chasing less profitable sales and all of the key drivers of margin that Alex has just been talking about.

And anything to touch on in relation to sort of pricing dynamics, potential chip shortage?

So on chips, probably the first thing to say is, clearly, it's a real thing. It's in the press every day, and it's something that we anticipated carefully. So if you look on our balance sheet, you will see that our stock is GBP 140 million higher than it was the year before. Now that GBP 140 million across both U.K. and Nordics relates, number one, to some buy forwards on laptops and mobile to get ahead of that. And as Alex said, we've probably got enough stock to see us through to September through to the back-to-school period. So that will deal with the first half. We're also driving availability. You heard Alex talk about our AAA products. And clearly, some of the increase in stock is focused around higher rates of sale. But through that investment, I guess you could look at it 2 ways. As a minimum, we've got the stock, and we're able to deliver. If you were being glass half full, you would say we're probably going to be one of the few retailers that got the amount of stock we've got.

We bought it at a lower price. At the higher price, if prices do go up, more customers are likely to shop at Currys than elsewhere because of the higher ticket price. And also, we'll be able to sell more services. So there are reasons to be optimistic on something that is a challenge definitely.

Thanks, Monique. Next could we go down to John.

John Stevenson at Peel Hunt. Yes, 2 questions. Let's start with cash actually. I mean, we talked about this before. I mean you're generating cash on this year's numbers. You sat well ahead of your sort of GBP 100 million requirement. I appreciate it gives optionality. Where -- what would stop you basically redeploying another buyback as we come into the half year? What are the reasons not to do that as the year progresses? It feels like you've got plenty of scope to go further.

And second question, just on -- sort of mentioned the data in the CRM. Is that -- are these improvements actually being employed now to the extent there's a discernible improvement in your marketing efficiency and driving frequency and share of wallet. Can you maybe talk about that?

I'll take the second part first, and then Bruce, you can take the first. Not materially is the short answer. So when we talk about up to 5% of Nordic sales, we expect to be personalization driven within the next 3 years. That's from a negligible base today. But all of the foundations are now in place. It's not -- we're not talking about we're going to do -- we're going to develop a single customer view, which arguably taken us a little time to get here, but we've done it. It's there. So it's ready to be used. So in that sense, it's upside to come.

Yes. Thank you, John. So in terms of our cash, I think the first thing to say is we're very comfortable with the strength of our balance sheet. Given the uncertainty of macro level, political level, having a stronger balance sheet is clearly better than having a weaker balance sheet. And I'd remind you that the GBP 100 million that we talk about in terms of a cash number isn't a target. It's a base. We will have at least GBP 100 million of cash within the business to protect us against downside risk. But as you correctly reflected, one of the reasons that we're comfortable holding that level of cash is to give us that optionality to give us a series of choices. So if further opportunities come up to invest, we talked about GBP 95 million of CapEx in the year ahead. If further opportunities came to give us a really solid return, we would spend more than that. M&A is another great opportunity.

So you saw those TAM areas that Alex talked about in terms of mobile services, B2B, new categories. If there was an opportunity to do some small infill acquisitions that gave us new capabilities to be able to progress those areas at a faster rate, we've got the optionality to do that as well. Now if neither of those things comes true and you stick the numbers we presented here in your model, you're right, our level of cash would probably step forward from GBP 176 million in the year that's just finished to a bigger number at the end of the year that's just started. And that's, I guess, where our capital allocation policy is clear. We are going to progress the dividend. And if we've got excess cash that we can't find a better use for, we'll do more buybacks.

Thank you, John. That's Adam.

Adam Tomlinson from Berenberg. First question is just can you maybe just comment, Alex, on how that's improved. So I think Currys people used to associate it with a lot of cyclicality. But in the current -- in the U.K., tough consumer backdrop, you're delivering positive like-for-like growth, very -- you've commented current trading has been very solid. So I would think that flat to even slightly down would be understandable in this environment, but the strength of that trading, just perhaps about how the resilience of the business has improved. And a bit of color on that would be great, please.

And then a second question just on CapEx, which I think the guidance is to step up a little bit this year, still below that GBP 100 million. But if you could just maybe talk about where that additional CapEx might go? And if that includes anything for -- you mentioned some infill M&A as well. So just a comment on that would be great.

Yes. So let me take the resilience point first. You're right to point it out, Adam, and we just finished with John's question on cash in the bank. I mean having GBP 176 million of net cash even after GBP 150-odd million of shareholder returns and substantially dealing with the pension deficit is clearly a comfortable place to be. And it's good that we've taken the end of GBP 1 billion of debt out of this business over the past 5 years. So I'm sure you'll draw plenty of comfort from that. That's the first answer to the question. But more than that, I mean, when we're talking about growing the business, we're talking about growing the business on strong foundations. It's the very foundations that we built of discipline on margin and cost that have given us the license and the bandwidth to go after these profitable growth opportunities. And as you've heard from Bruce, we have no intention of relaxing those margin and cost disciplines. Why should we?

They've served the business really well. But now we do have these profitable growth opportunities that are proving themselves. They're not speculative. They're driving healthy double-digit growth. And as you say, in a U.K. technology market that went backwards by 1.3% last year to be posting 3% like-for-likes isn't nothing. And we've done that, yes, by eking out some share growth in the core, the 60 basis points of improvement that we talked about, but also by going after a much broader range of growth opportunities where we still have every right to win. These aren't random growth opportunities, they're ones that grow from our core, like small- to medium-sized businesses where our core business that we've established to serve consumers has so much of what it takes to serve small-to-medium size businesses as well.

And what we don't have, we've built, and we've got 20% growth to show for it. But it's not just B2B, there's the new categories and the new -- and then finally, there's solutions and services. Of course, it's good for customers and good for us that we're building out the solutions and the services that are such an important part of them. It's good for everybody. They rest on capabilities that we've got that nobody else has got or will have. So there's a competitive moat angle to these services. And they're a source of higher-margin recurring revenues. And that's the last part of the answer. When you've got 30% and growing of your revenues that are recurring, that starts to build stabilizes into the P&L.

Thanks, Adam. So you're right. Our expectation is to grow CapEx in the year ahead. Our CapEx falls into 3 broad buckets: investing in our stores, investing in our supply chain and investing within systems. I think the first point to say is that as we've got behind us some of the maybe risks or challenges, so the GBP 32 million of government headwinds, the big contributions we were paying into the pension scheme, the ongoing high cash exceptionals that we were aware about, as those go into the rearview mirror, so we've got more flexibility. So we're able to step up the level of CapEx. I think another point, you will have noticed that the capital expenditure in the year that's just finished, particularly in the U.K. was lower than we originally forecast. The reason for that, we talked about moving some of our technology into the cloud. And we had a few problems, which caused some of the cash outflow within our exceptionals. That caused us to put the handbrake on some of the tech development. So again, that has drifted into the next year.

If we could go to Richard at the front.

Richard Chamberlain, RBC. Maybe a couple, I think, probably both for you, Alex, if that's all right. So you mentioned in your presentation about there's an availability opportunity using gap analysis and so on. And I wondered if you could give a little bit more color on that. Is that around trying to change the kind of culture of colleagues in store a little bit to improve that? Or have you got some new tools, maybe AI related or something to help with identifying gaps in availability and presumably that could actually be a nice like-for-like sales driver in the year ahead. So that's the first one.

And then the second one is on sort of cost savings. I know you've got the statutory cost headwinds sort of falling away or they're going to be less of a headwind. Are there any other kind of company-specific headwinds or cost opportunities that you'd highlight, any particular buckets that you'd highlight going forward?

Bruce, do you want to deal with the cost one first?

Yes. No, absolutely. So I mean, our cost saving opportunities, I guess, fall into a number of buckets. One is tech. So we talked about moving some of our technology into the cloud, but there is still a number of areas where we've got legacy systems, legacy data, where through AI, there's an opportunity to unlock value and deliver synergies. So that's certainly a big opportunity for us. Within our stores, you heard Alex talk about electronic shelf-edge labels. He talked about, again, some of the AI deployment into our stores. And again, we look at processes. And AI, I think, by itself is a great opportunity, for example, within our contact centers. For example, being able to register and track the types of calls we're receiving, that used to be a burden activity. And also, we're putting tools into colleagues' hands in the center, which again will allow people to be efficient.

On the availability point, there's a few things in there. You mentioned culture, and you're right, too. I mean, well-meaning colleagues who like the shelves to look good would often cover up gaps in availability by putting other stock in there and taking the tickets of the missing product away, which makes the place look better, but it makes it harder to spot gaps in availability and then drive replenishment. So yes, there's a cultural aspect to this, which is to trust that we would -- if there's a gap in the shelf, we leave it there. And what we focus on is replenishing it rather than making it -- covering it up to make it look better. But that's one -- there's only one aspect of it.

There are other -- there's hard process behind this. And I mentioned daily gap scanning, which is a discipline that we put in place that wasn't there before and that's had a really, really big effect. But the other part of it is this is the analytics side, the AA, AAA tool. Good example, by the way, of best practice sharing across the group and how that can work. It was originally a Nordics tool that the U.K. team cheerfully copied, improved to a better state than it was being used in the Nordics, which made Fredrik cross.

So he took it back and now the Nordics are developing that even further. And what that does is it simply identifies the most important products, the fastest moving, the highest selling and the best margin for us and just make sure that we don't come out of stock in those products, make sure we've got the depth of range in those products and the depth of availability. And those things together, better analytics and better process are having quite a big impact. And I mentioned over 60% improvement on-shelf availability. And if we can make a meaningful dent in that 1/3 of customers, up to 1/3 of customers coming into our stores and leaving empty handed in large part because of availability issues. That's -- I mean we know it's already made -- good luck taking the sugar out the tea, but we know it's already made a meaningful impact to sales growth, market share growth and driven by conversion improvements in our stores in the year just past, but there's significantly further to come here.

Thank you, Richard. And could we come to Nick.

Nick Barker from BNP Paribas. Firstly, you continue to target long-term EBIT margins of 3%. And as you say, you're sort of almost there in the U.K. But what sort of time frame do you see for meeting the target in the Nordics? And is there a ceiling at 3%? Or can we go higher?

So there is no time frame on the basis. Clearly, we're pushing as hard as we possibly can to go as quickly as we can. And you saw on the slide that from a Nordic perspective, we've traded successfully over 3% for the best part of the decade. In terms of the target, I mean, our position is really clear. It's not 3%, it's at least 3%. And if we hadn't faced into the much talked about this morning, government headwinds in the U.K., for example, we would have been well north of 3% in the year that's just finished. So there's no headroom and there is no constraint in our ability to push on.

And my second question is just in terms of that sort of your current trading comment is starting very well for the year, which is great. Is there any comment you can provide on sort of product mix or what the drivers behind that have been for the start of the year?

Very solid. I think is the phase that we're sticking to. Yes, it's a satisfactory start to the year. We're not going to provide a great deal of color on it, Nick. I mean I would say that there is a World Cup going on at the moment, which Currys Group has 2 remaining interested countries. So we'll be maturing on Norway. Norway England final would do us nicely for telesales. But it's not just about TVs. It's also about barbecues and home beer pumps and the like, which are selling really nicely. But clearly, TV is at the heart of it. And the super sizing trend continues to give. I think we more than doubled our sales of 90-inch plus TVs in the year just past. It's creating a bit of a supply chain headache, the supersizing trend because we've got 130-inch TVs coming and 150-inch TVs on the way, which weigh in at 256 kilos, which if you're doing a wall mount on that, has a bit of challenge. But the news is good, right, because it plays to our strength because we are the ones to come to when you want the best TV.

We are the ones to come to when you want delivery and installation. And so the more the merrier when it comes to this trend. All that said, we'll be happy about England and Norway going further for TV sales, but we're less and less dependent as a business on these big events now. And we've built out a much broader-based set of growth drivers as we talked about today, whether it's the return -- strong return of mobile in the U.K., whether it's the new categories, which are such growing so nicely, 52% up in the U.K. or the big and still relatively untapped opportunity of selling to small-to-medium size businesses as well as to consumers. And then the services that drive that 30% of revenue now recurring. All of these things make us less dependent on things like the World Cup, welcome than they are.

Any further questions? Ben, at the end there.

Firstly, thanks for your insight over the years, Alex, and best of luck in your future. Just going back to Nick's question, it feels like you're sort of approaching the up and there we said, with good top line momentum. As you said, Bruce, the inflation headwinds are falling away. If pressed, though, and so it feels like there's quite a bit of margin tailwinds or slack, if you like. But if pressed, what would your preference be to perhaps bank that margin or to maybe go for that market share more aggressively if you could reinvest back in the proposition? That's the sort of first question, I guess.

Yes. I mean our position, I think, has been consistent over the last 3, 4 years. We solve for cash. So chasing sales for the sake of chasing sales or chasing market share for the sake of market share is not the way we operate. Hopefully, we can achieve both. And I think we've been able to demonstrate, particularly over the last 12 months that we have been able to achieve both by picking products or picking categories or introducing new categories that are margin accretive. So that's, I think, our secret sauce, the fact that we stay disciplined because anybody can sell stuff for nothing. That's not what we do.

And then just second question on more technical. There's a bit of a step-up in the EBT purchases expected for this year. I presume that's a bit of catch-up and perhaps the share price going up. But how should we start to think about that on a sort of ongoing basis? Is that sort of normal run rate, GBP 40 million? Or would that start to normalize back in the outer years?

Yes. So our policy on the EBT is to hold sufficient shares to cover for the next year. So right now, the shares that we're buying are for FY '28 to make sure that we've got sufficient shares in the bank to cover that. And clearly, our goal is to make sure that shareholders aren't diluted so that we have enough in the bank. I mean we can think internally in terms of whether we can provide any guidance, but I think the GBP 30 million that we're calling out, I think you should assume that's maybe the run rate for the next couple of years.

Thank you, Ben. Can we come to Charles at the front here?

Charles Allen from Bloomberg Intelligence. Can I just come back to the chip price rises? How aware are consumers of the rising chip costs? And do you think people are bringing forward purchases just to make sure that they're not hit by 20% and 30% price increases?

We're not seeing enormous levels of awareness on this, and we're not anticipating a massive forward pull either to answer your question directly. I think there are reasons for that. I mean one of the reasons is that we are intending to shield the consumer from as much of these price rises as possible. And as #1 in the market with the biggest heft with suppliers, we're best placed to do so. And particularly, as you heard from Bruce before, as we were on this at least, we are prescient enough to do significant forward buys. So we've locked in supply, and we've locked in stock. So we're not going to face the immediate availability challenges that some of our competitors might. So that's the one first thing.

Second thing is consumers have kind of got used in computing to year-on-year value for money improvements. because they get more specification for their pound of purchase price every year. The rate of that improvement might tail off somewhat this year. So the specification improvements might be lower this year than they've seen in previous years. Most consumers, that's not very important too. And for all consumers, it will have the happy consequence of dampening the price rises. So we haven't -- we're certainly not giving up on protecting consumers from these price rises. But you ask us what we expect. We expect that inevitably some of these cost price inflation drivers will make it through into the purchase price, but we're working hard to avoid that.

Thank you, Charles. Adam?

One more question for me, please. So I think a lot of people have said it already, but congratulations, Alex. I think it's been a fantastic turnaround. You mentioned some of the things you've achieved, but I think it's often overlooked that, that has been against the backdrop of COVID, supply chain disruptions, wars. So personally, I think one of the best retail turnarounds over the last decade. So congratulations on that. You've always been very quick to praise the teams around you and the teams you've built. So just a final thought from you on that, if we could. Just firstly, around the operational teams, the confidence that gives you going forward. But I suppose to my mind, one of the -- one of perhaps your biggest legacy is the step-up we've seen in the workforce in terms of in-store colleagues, the repair center colleagues, so the engagement levels, the service levels they offer. And ultimately, those are the first point of contact many customers have with the business. So just great to get your thoughts on that, please, and how that gives you confidence going forward?

Thank you. I mean look, I mean, you're right to point to the team because no Chief Executive achieved anything on their own, and that's doubly true in a retailer like us at the scale that we've got. And I'm incredibly fortunate with the world-class team I've been lucky enough to surround myself with and which Fredrik is inheriting, many of whom you've met. So that's -- there's no better way to ensure the sustainable success of the business than having people around the table who are expert in their fields and work really well together and really care about what they do and really bust the gap for each other, for customers and for the business. And we're fortunate to have that here, not just around the executive table, but being recognized as the #1 retailer employer in the U.K. by Glassdoor and the Sunday Times really matters. I mean there's a commercial -- it's not just because we're lovely people, it's a commercial imperative to having people here who really know what they're doing and want to be here. And it's been an essential foundation of the business' success.

So of course, I take a lot of pride in everything the team has done here. And it gives me a lot of pleasure to -- if I have to leave here when everything is heading in the right direction and everything is tracking in the right direction. But I will be a loyal Currys' customer shareholder and advocate my whole life. I'll be cheering Fredrik and the team on from the sidelines even if I won't be up here. And I'm confident that they cannot just continue but accelerate this momentum.

Thank you. I think that's a good point at which to finish.

Good morning, ladies and gentlemen. We're pleased with our strong performance and accelerating growth this Peak with the U.K. growing profitably in the areas that we targeted and the Nordics keeping its hard won margin and cost disciplines as the market and our sales growth both come back strongly. Everywhere, you can see a strategy that's working and a business that's on a really good trajectory with colleague, customer and financial metrics all in growth, growth in sales, market share, profits, free cash flow on resting on a strong balance sheet and able to produce increasingly healthy shareholder returns.

I'll say more on how we've delivered this improving performance, and then we'll take your questions after Bruce has taken you through the numbers.

Thank you, Alex. Good morning, everyone. So let me start by reminding you about our half 1 performance, which showed growth across the Board. Group revenue was GBP 4.2 billion, up 8% year-on-year. Adjusted EBIT was GBP 54 million, up 32%, which gave us an adjusted EPS of 1.6p. Our free cash flow was GBP 84 million, up 68%, leaving closing net cash at GBP 133 million. And finally, shareholder returns in the first half were GBP 46 million, of which GBP 16 million was dividend and GBP 30 million of buyback.

Moving on to Peak like-for-like sales. We enjoyed growth in both of our segments with Nordics improving rapidly. Starting with U.K. and Ireland, Peak like-for-like was plus 3%, and that follows the plus 4% like-for-like we saw in H1 and the year-to-date, therefore, is now plus 3%. So we're now enjoying 2 years of consistent growth. In the Nordics, sales accelerated over peak. We enjoyed double-digit like-for-like growth at 12%, which means that year-to-date trend is now plus 7%.

Moving on to outlook and guidance. Now that we're through Peak trading, we're able to share our full year expectations. So for the current year, we expect group profit before tax of between GBP 180 million and GBP 190 million. That would be an increase of between 11% and 17% year-on-year. At the top end, we're 5% above the consensus of GBP 180 million, and we're 10% above the consensus pre our interim results. Within those numbers, U.K. adjusted EBIT is broadly stable year-on-year, and that's despite the government's inflationary headwinds.

Nordic adjusted EBIT, we expect to grow significantly year-on-year, and interest expense will be between GBP 60 million and GBP 65 million. Given the strong trading, we expect year-end net cash to finish above our GBP 100 million target, and that's despite GBP 82 million of pension contributions and GBP 75 million of returns to shareholders.

Finally, and quickly, just to reiterate our capital allocation priorities, which remain unchanged. Our balance sheet is strong. And I guess there are just 2 points to highlight. The first, to remind you, in December, we declared a 0.75p interim dividend. And today, we will restart the GBP 50 million buyback, of which GBP 30 million was completed in the first half. I'll hand back to Alex.

Thanks, Bruce. Yes, strong peak period and some highlights from it. I mean Mobile was the category, the star of the show, continued its profitable growth and share gain, up 10.6% in the U.K. with iPhone and iD to the 4. ID, our own MVNO, has added 1 million customers over the past 2 years.

In Appliances, coffee, we talked about in December as being a growth driver. So it's proved plus 31% with premium bean-to-cup coffee machines flying off the shelves. Robot floor care has been really strong, plus 65%. And then in the new categories that are doing so much to grow our total accessible market. We've seen some success in toys, in health and beauty tech and in wearables, smart glasses that is a form factor whose time has definitely now come with Meta Ray-Ban and Oakley up 270%, for example, as well as a bunch of successes on gifts.

So we'll talk a little bit more about how we've pretty much tripled our total accessible market a little later and some of these products are driving that growth. And those are the highlights from a strengthening performance that's down to a strategy that we've stuck to for some time and that's clearly working. It rests on the fact we exist to help everyone enjoy amazing technology. Technology for many people is exciting, but it can be confusing, and it's often expensive, and they do need help. They need help discovering it, choosing, affording and enjoying to the full the benefits of technology.

And Currys as the #1 specialist omni-channel retailer and services provider is best placed to help with all of that. How have we been doing so? Well, first of all, it starts with colleagues. Happy colleagues make for happy customers, and those happy colleagues in turn can make it easier for customers to shop and then build customers who keep coming back, customers for life, in other words, so growing profits and cash flow.

And as the market leader, the #1 in every market, we're best placed to do all of this for customers. And one sign that we are doing it is that we're extending our lead and growing share. U.K. share was up 60 basis points at peak. Nordics, we're still waiting for the final numbers, but share grew there as well. And this is -- this picture of share gain in our core markets, encouraging though it is, does understate our progress.

Our like-for-likes are growing faster, including as they do growth in some newer categories like wearables and newer customers like SMBs. For example, on the left-hand side of this chart, you see the U.K. The bottom line is our core market. The middle is our core sales, which are beating that market, but not as much as the top line, which is our like-for-likes includes all the products that we sell, all the customers that we sell to, and that's growing even faster.

And we owe this #1 position to progress on every leg of our strategy, progress on colleague engagement, where the group engagement was up again to 82%, Nordics at 79% and the U.K. in the top 3% of companies worldwide, up again 2 points to 84%. This is the fruit of all the investment we've made in tools, learning, development, reward, well-being, leadership, communications, culture, listening and acting to colleague feedback on pain points. And all of this has seen us climb up the ranks of U.K. retailers as a great place to work and Glassdoor is the transparent measure of that. And we're pretty proud of this chart.

Currys has gone from the bottom quartile of retailers and moved to #1, top of the 28 leading retailers in the U.K. as a place to work as of this January. And happy colleagues, as I say, make for happy customers, and we've seen another year of progress on customer satisfaction, whether it's in the U.K., and nudging up again to 56, a new record NPS. And by the way, our Trustpilot in the U.K. over 5 years has gone from poor to excellent from 2.7 to 4.4.

The Nordics, even better. They've come in -- as they converted to NPS. They've come in at 64, 8 points higher than the U.K., which is leading to some mostly healthy internal competition, which I thoroughly welcome. Customer satisfaction, of course, is the product of more than just colleague engagement. It also comes from how easy we're making it for customers to shop, how they want to shop, which in technology retail is omni-channel. Customers prefer to shop for technology in both online and stores. Currys is big in both. So it's on us to make the most of it, and we've been working hard to do so.

For example, in stores, we've introduced new tools into the U.K., like electronic shelf-edge labels, which improve the customer experience, enable more nimble pricing and take cost out. We've introduced headsets. All colleagues are now connected for faster customer service and better security. And you'll hear more on all of this at the U.K. stores event in March. We've made big improvements online as well, whether you're in site speed, discovery, search, navigation, comparison filtering, checkout, everything from richer content to better recommendations, better search accuracy, more better reviews, better product descriptions, better labeling, better sought by options, faster payments and so on. And all of this is leading to our growing market share in online as well as our growing market share in stores and to higher conversion.

Good progress, much more to do, including in how we make both channels work together. And so a customer can easily shop across both, for example, ordering online and collecting in-store, a good double-digit growth, both the U.K. and the Nordics on that. So likewise, helping the customer in a store shop from the full online range also in growth. And our omni-channel sales, the sales that touch both channels in this way, is growing fastest, which another sign that customers prefer our model and a big part of making us easier to shop.

And it's on these foundations that we can then build more customers for life, customers who keep coming back to shop at Currys. And this is built on solution selling. We want to sell customers a complete solution, not just the product on its own, but the product, the accessories, the services, giving them everything they need and good value for money. And of course, Currys makes more profit when we sell that full solution. So it's good for everyone when we sell more solutions and as we are, adoption is growing fast. I mean the Nordics doubled adoption rates to over 25% year-to-date, even if we couldn't quite sustain last year's sugar rush of mobile screen protection. It's still, as I say, double where it was 3 years ago. Likewise, more than doubled in the U.K. to 43% solution adoption.

Good progress, but still a lot further to go. And a big part of those solutions are services because customers need to enjoy their technology right the way through its life. And for us, services produce high margin and often recurring revenues that we are best able to generate better than any of our competitors.

Services like credit. Customers like credit because it helps them afford sometimes expensive tech that we sell. It's why credit customers' NPS is 12 points higher than noncredit customers. And it's good for us because credit customers spend more, they shop more often and they have twice the lifetime sales. Plus, on the right-hand side, you'll see the nontrivial direct P&L benefit from commission, which is back into growth with lowering base rates and also avoided card acquirer fees and circa 50 basis points of cost avoided on over GBP 1 billion of sales, it adds up. So low double-digit millions straight to the bottom line and which is gratifying, but part of the benefit of credit to us.

So it's good for everybody when credit grows, and it is. We're up to 24% sales. 24% of our sales are on our own credit product in the U.K., 25% it was over peak, over 2.9 million credit customers. And we're now quite a big credit provider, #3 in retail credit now. We've overtaken Argos behind only Next and Very, but still with plenty of headroom for further growth.

The services that help customers get started with their tech was also growing nicely. For example, installation up to over 1/3 of our big box sales in the U.K., but it's not high enough. In the Nordics, it's 46%, which gives us our U.K. colleagues something to go for, and we're working hard to achieve that just as we are to grow repair, possibly the most important service of all to our customers. Customers like giving their laptop longer life. It saves them money, and it's also good for sustainability. And it's important to us, too, that we repair plans are profitable, and they also help with cost avoidance.

So again, it's good for everybody when repair is in growth as it has been. And good not least, because competitors can't follow us here. No one else has or realistically ever will build what we've got, for example, in Europe, Europe's #1 biggest repair center for technology with 1,200 colleagues and 3 million devices a year going through it, 3 others like it in the Nordics. We've got assets here that are unique to Currys, which we intend to continue to exploit.

And lastly, under services, connectivity, helping customers get the most out of their tech. And iD is a big example here, 1 million customers added to iD in the last 2 years. We grew customer numbers by 19% year-to-date, over 2.5 million customers now. We're already at our full year target, helped by a good contract, which allows us to price competitively and an improving customer experience.

The iD app now has more than 2 million users and iD's Trustpilot up over -- broken 4, now 4.1 and still climbing. We're building a valuable asset here in iD, and it's part of a Mobile category that's itself back into profitable growth and share gain, plus 300 basis points year on 3. And one big thing we like about services is that many of them have recurring revenue, which was up 11% to 30% of sales and increasing share of the overall.

Services also drive higher gross margins along with being able to charge more for a better customer experience, along with not chasing less profitable sales and along with making our supply chain and service operations more efficient. And we've worked hard on costs, too. We've had to, as Bruce said, we're facing some unwelcome government cost headwinds. And you see on the left-hand side, a bunch of the initiatives in the U.K. that add up to nearly GBP 40 million of mature annual cost savings. We won't get them this year, but we will ultimately, and that will counter those unhelpful cost headwinds. And so it's on the back of those margin and cost disciplines that we've got the license and the bandwidth to go for profitable growth, selectively go for profitable growth.

And we've been getting behind some growth opportunities for the past couple of years that we've told you about, and now we can tell you about our progress against them. And the growth areas that we've targeted, not just in our core market, the GBP 17 billion plus you see on the left-hand side here, but new products, new services and new customers, areas that effectively multiply our total addressable market by 3. And we are growing in all of the targeted areas, whether it's in our core and mobile that we talked about, but AI computing is another good example, whether it's in new products, up 42% this peak, our sales in categories that are adjacent to our core, like health and beauty tech, like seasonal, outdoor, accessories, wearables, robots. And the new products, as you see, it's a pretty big market, GBP 12 billion and growing, and we've only got a 50 basis point share.

So we intend to do something about that. Plenty of headroom for profitable growth there. And then, of course, there's new customers, particularly small and medium-sized businesses. And that's a big opportunity. I mean SMBs alone grow our total addressable market by 60% and plenty of headroom, it's only 8% of our sales today. And we have a right to win with SMBs. I know this is a question on some of your minds. And so we can come back to this in Q&A, if you like. But think about 1 to 50-seat small- and medium-sized businesses, which is our bull's eye target, they're the same customers. They're already coming to Currys in their capacity as consumers. These are the same suppliers, the same products, often the same solutions, the same channels that we serve it through, the same supply chain and service operations.

We've already built all this, and we can leverage it for this adjacent market. And the bits on the right-hand side here, you see that we lacked, whether it was the right leadership or specialisms in the stores, online presence or account management, we've built, and we've added those missing pieces. And the proof of it is that we are growing fast. I mean, 21% up in the U.K., 25% up in the Nordics, B2B, this speak, a big part of getting the group back to profitable growth. And all this allows us to look ahead with confidence finally. I mean we're on a good trajectory as a business. I mean the improving results for colleagues, customers and shareholders within the financial results.

We've got growth in sales. We're gaining share against the competition. We're doing it profitably. We're generating more free cash flow. And in every market and across every product in all categories, we've got profitable growth growing. So it's on these foundations of a net cash balance sheet that we can be confident in returning more cash to shareholders. We know how to do it, and we're going to keep doing it.

And this is where I'll close. Just by reminding, we believe that we've shown sometimes uncooperative markets that we've got plenty of opportunity for steady but reliable growth from lots of different sources, not least from the Nordics, from credit and from iD. And when on the resting on a strong balance sheet and keeping to our discipline on margin and our cost disciplines, that gives us confidence in growing the free cash flow that in turn allows accelerating shareholder returns. And with that, thank you, and we can go to your questions.

[Operator Instructions]

And we will begin with John Stevenson of Peel Hunt.

We start with the U.K., please delve a little bit into the U.K. performance. I mean, I suppose how would you rate U.K. confidence when you look at things like sort of ASP, [indiscernible] levels, general spending?

And then secondly, how easy are you finding it to drive awareness and discovery in the new product categories? And then finally, can we talk through the sort of GM improvement that came through on peak? And in light of that and the sort of moving parts for the year ahead, do you feel confident that the U.K. can move profits forward next year?

Bruce can take your last question on GM, and then I'll pick up the other 2, John.

John, [indiscernible]. Yes. So when you look at our first half performance, we showed gross margin percent falling by 40 basis points. All of that was caused by the government-imposed inflationary headwinds, so living wage, national insurance. Our underlying gross margin actually stepped forward in the first half. Now when we look at peak, actually, the underlying activity that Alex just described in terms of solution selling, services, et cetera, the upside from that exceeded the inflationary headwinds. And therefore, net-net, we saw a step forward in our gross margins.

John, on your question on confidence, I mean, the -- if you look at the headline U.K. consumer confidence and GFK is the best single source for this, and it's been bumpy and it's still low by historical levels at minus 17%. And we've seen that translate into a declining core technology market. We was declining at 1.2% in the first half and 2% over peak.

So on the other hand, within the consumer confidence is the major purchase index, which is probably the better measure for Currys, and we've seen a steady climbing of that, and that's back into positive territory, which is good. And of course, the consumers might be sitting on their cash, but at least they've got the cash and households in aggregate now are saving more than they're borrowing.

So yes, of course, there's still caution about the outlook on inflation, on jobs, on interest rates from consumers. But there are also reasons for cautious optimism for the year ahead. But I mean the point is that's not what we're depending on. So we don't need or expect market growth. We plan super prudently. And I think what we've demonstrated with the strong and strengthening of results this peak, what we've demonstrated with the accelerating like-for-like performance, 6% over peak, up from 4% in the first half is that we -- on the back of these strong margin and cost disciplines, which we're not going to let go of we've identified, are getting behind and successfully a series of profitable growth initiatives.

I mean the biggest of these is credit with up to 25% of our sales. There's iD is up to 1 million extra customers over the past 2 years and 19% growth over peak. And then there's the Nordics, which is over 40% of our business and grew at 12% over peak. There are others as well. I mean we're selling other services to customers. We're selling to new customers like small and medium-sized businesses. We're selling new products, new categories to the customers that we've got. But there's -- when we talk about our confidence in steady growth, I think we're just talking about what we're already doing rather than what we intend to do.

Finally, you asked about how we build awareness and discovery amongst the new product categories. It's a good question. But I mean here, we -- in simple terms, we benefit from being #1 and we benefit from the omnichannel model that we've got. Because we're #1 in the market, we don't have to try too hard to go looking for new products. They come to us. I mean suppliers know that if they want to sell in the U.K. and the Nordics, we're the place to start. And so things like the UFI X10 vacuum robot, I mean, the supplier comes to us and pitches their wares.

So I mean I'm not saying commercial teams don't work hard. Of course, they do, but we have an easier time of it than also around retailers defining the new stuff. Then when it comes to presenting it to customers, of course, we benefit from our channels, in particular, from being an omnichannel retailer at scale. So we can display -- we've got the number of stores and the space in the stores and the expert colleagues and the investment in the fabric of the stores to display all of this new product to best effect.

And you'll see more space in a Currys store, just as you'll see plenty of space in an UpShop store devoted to these new and growth categories. It's good in and of itself because it's a meaningful growth driver. It also helps drive traffic into the stores when customers who might have a spare 15 minutes on a retail park know that they can head to Currys and find something new and interesting. So I hope that answers your questions, John.

Yes, that's really helpful, Alex. I mean just back on the conferencing, I guess it was a very roundabout way of saying what was happening with basket and ASP. Did you find that people have been spending more, I guess, at Curry's, I guess, through credit, they probably have been?

John, as you know, we don't break that out. So no, we're not going to comment on that.

We don't break out the ASP, no, as Bruce says. I mean if you're asking about credit as well, John, of course, we do talk about that. And the credit adoption year-to-date is up 200 basis points and just shy of 24% of our sales are on our own Flex Pay account. And that was -- at peak, that was 25%. First time we've reached 1/4 of our sales on our own credit products, which is good for customers, and it's obviously very good for Currys.

Next question will be coming from Wayne Brown of Panmure Liberum.

Well done on the statement. You've given some really interesting news slides on the market and TAMs, et cetera, which are very clear. I suppose mine is more qualitatively around those, and it's more about what competitors are able to do and what they are doing. So if you can just expand, you've got new categories, which are clearly driving quite a bit of growth and you're expanding into new TAMs. Are these less or are they more competitive than the core categories? Are your competitors able to respond in kind? And of course, you've got that service overlay too, which is helping drive growth.

But I'm just wondering, are competitors actually able to kind of respond in a competitive way? And therefore, if they aren't, should you expect market share gains to continue -- that's really nice progression that they are? So just a little bit of color around that would be lovely.

Yes. It's a good question, Wayne. I mean if you cast your mind back to that slide where I showed the expanding TAM that we're playing in. I mean, clearly, things like mobile handsets are a competitive market. The mobile network operators have got strong retail arms of their own. I mean in new categories, what Currys isn't the only place you can find wearables or coffee machines or smart tech or the like.

That said, I come back to what I said about the suppliers beat a path to our door because they know that 80% of consumers are our customers. They know that we're the #1 in the market, and we're extending our lead with the market share gains that we're talking today. They know that we're a very big online player as well as a store player. So they know that the new products are going to get a prominent outing by thinking about stocking in us first.

So that's the first thing to mention. I think that as to the competitive environment, you're right to point to the fact that some of these areas, the competition is much more fragmented and arguably weaker than it is in our very competitive core market. And B2B is the best example of that.

When we focus on serving 1 to 50 employee small- to medium-sized businesses, we're deliberately pitching that at the area that is, yes, it's adjacent to our B2C core. So we can leverage all of the things like supplier relationships, like the channels, the supply chain, the service operations, as I say.

So we start with a big advantage from our core B2C business in serving SMBs, but also the competition is significantly weaker and more fragmented. And there's a lot of local independence and from whom that we are already taking share with the 21% growth that we've just posted in B2B. We've said publicly that we can double the size of our B2B business in the U.K. within 3 years. You can be sure that we're going for more than that. And so this is an area that we're particularly excited about, and we would expect B2B to account for significantly more than 8% of share of our sales in the future.

Finally, the bigger point here, Wayne, is back to this promise of steady growth. When you look at -- yes, we're gaining share in our core that we don't forget about that. But when we -- and we're gaining share, including in Mobile in our core, but we're also growing in services like credit. We're also growing, as I say, in B2B. We're also growing in new categories, and that should give -- it gives us some confidence because there's no room for complacency, but it gives us some confidence that we can continue the steady growth.

That's very clear, Alex. I just got one further question. Delivering amazing service at scale, we know is incredibly difficult and very expensive and few people pay a premium for it. So the question is really about engineering the best service at the lowest cost. And you've done some great work in the cost side of the business over the last few years in outsourcing and AI, et cetera. Are there any other big projects that we can look forward to in the next 12 months? Or is it much more of the same or anything else that you can point to on just trying to obviously maximize the service and bring down the cost side of things?

Wayne, So Alex had a slide in his deck, which I think largely touches the same 4 groupings of area of cost opportunity that we have been talking about for the last 3 or 4 years. So we put electronic shelf edge labels within our store. That obviously allows us to reduce our cost base.

From an IT perspective, we're moving some of our data centers into the cloud, which allows us to reduce overall levels of cost, very focused within our supply chain and service operation about getting things right first time. And from a back-office perspective, it's about driving efficiency. So very similar, same kind of buckets, but there are always new opportunities that we're going after to make our business more efficient and more effective.

The one build on that, Wayne, I think you said that the customer won't pay for superior service. And of course, the customer has got a keen sense of value for money, and we wouldn't be growing our market share if the customers didn't and growing customer satisfaction if the customers didn't find us good value for money. That said, I mean, we -- installation is a good example of a service as it's got better, as our service delivery has got significantly better in recent years.

So we've been able to charge more for it and the customer is still getting good value for money for a better service, and we make more money. So it's a win-win. I mean in repair, we're able to give the customer a better service at lower cost to us. Repair Live is an example of a good innovation that we've already got a market-leading 7-day promise for repair that no competitor can match. Well, we're taking that down in some cases to 7 seconds from 7 days to 7 seconds. If the customer is on a VC with one of our experts and they can diagnose a fault in the customer's laptop remotely and instantly. That's great for the customer. They're getting unmatched service. It's also fantastic for us because we avoid the cost of having to ship the product, having to ship the product back and forth. Two examples of where the customer -- you can make more money out of better service.

Next question will be coming from Richard Chamberlain of RBC.

Ask you just a bit more about the Nordics, if that's okay. I mean it looks like the relative outperformance, the market share gains accelerated over peak. And I just wondered how you would go about explaining that. And then in particular, I guess it sounds like you've been performing very well in Mobile in the Nordics. Can you just talk to whether you sort of over-index in that category, I guess, with sort of for mobile, for estate and so on? And any particular development sort of upgrades in Mobile that you've seen over peak?

Thanks, Richard. I mean on the Nordics, we've obviously had a tough 2 or 3 years in that market. But the last year has seen a really strong return of the market and of course, a significant improvement in our own performance within it. So the fundamental facts of the Nordics being healthy, wealthy markets haven't changed. And what we've seen with the macro improvement, so interest rates and inflation are coming with the exception of Norway, I mean the interest rates and inflation are under 2% for all of the markets now, and the markets have come back really strongly.

Consumer confidence has rebounded. The market is back into healthy growth. And we've kept our margin and our cost disciplines that have been hard won during the tougher times, and we've applied that to a more buoyant market. And we're rewarded with a very profitable 12% like-for-like growth in the Nordics over peak as a result.

I mean a couple of things that are worth bringing out. I think you mentioned building on the market share gains. Actually, we lost a bit of market share in the Nordics in the first half, you'll recall. That was the one sort of blemish on an otherwise splendid first half performance in the Nordics.

Well, we're back into share growth over peak. We haven't got the final numbers yet, but it will show market share growth. So that final box has been ticked. And the Nordics is back to being a really strong contributor to this business, which is great because it's 40% of the whole. On Mobile, I think that Mobile, again, we've had some well-publicized issues in the past in this category. They're well behind us now. And yes, our market share in mobile is smaller than it is in the core electricals product, but it's growing fast.

And we're back into profitable share gain in Mobile, and you ask what's behind it. And the biggest single thing is iD. I mean, iD, our own mobile virtual network operator is back into healthy subscriber -- is in healthy subscriber growth. We've added 1 million subscribers over the past 2 years. It grew at 19% at peak. And there's every reason with the good contract that we enjoy, the better customer experience that we're providing that we'll keep continuing that. That's what we intend to do as we build a valuable asset.

We now move to Alison Lygo of Deutsche Numis.

So 3 for me, if that's okay, please. The first is just on B2B. So clear that you're leveraging a lot of the same capabilities that you've built and you've got through the stores and omni-channel. But interested in terms of how you're working to really grow the kind of customer base in terms of building awareness and acquiring customers. If you could share a bit more detail on that, that would be great.

And then the second one is on the Nordics, and I appreciate it's very early days with your virtual mobile network over there. But just interested as to how you're seeing kind of the competitive landscape in that market and kind of the addressable opportunity you think you're running out there?

And then the final one, just on any update on the migration to the new cloud-based system. If you could just remind us on what's actually being transitioned there, maybe some of the benefits you're expecting and anything we should be watching out for?

Yes. So to take your B2B question first, I mean, the simple answer to how we're growing awareness of the proposition is through our existing channels and with existing customers. So when we serve 80% of households, most SMB owners are already Curry's customers. So in one sense, our challenge is easier. When they come to Curry's channels, stores or online in their capacity as consumers, we just need to let them know that we can serve their business needs as well. So -- and we're getting better at doing that.

So again, that's a very low cost of customer acquisition. if we can do all of our marketing to existing Currys customers and existing channels, that will make me happy. We have to spend a bit on top of that, but we're being quite careful in sort of stand-alone B2B marketing. You'll see a bit of it, but mostly, we can lean on the B2C machine for customer acquisition as well. It's worth saying that we now have over 50, I think it's near 60 B2B hubs in Curry's stores in the U.K. And so this is the most prominent way of showing customers that we serve the B2B market.

When we have dedicated specialist expert Curry's colleagues in a very visible B2B hub in the store, that's not only a way of building awareness, but it's also a good way of converting them and serving existing customers to build the share of wallet there. So that's the B2B answer.

I mean Nordics Giga, our new MVNO in Finland is small. It's had a good start. We're not breaking out too much detail on its early performance, but it's ahead of what we targeted, which is a nice start. And we chose Finland because as you see on the chart, our market share in mobile in Finland is the lowest of our markets in the Nordics. And of course, Finland is a relatively small market. So it's a relatively low-risk place to test something.

If we are happy with how it works, then it's not impossible that we might see an MVNO in other markets. But let's see. I mean at the very least, what this is doing is making sure that our valued partners in the mobile networks in the Nordics know that we've got alternatives, which always improves your negotiating position. So that's -- and plus we're building a valuable asset there as well as we've done with iD in the U.K.

I mean we haven't got too much more detail to announce on the migration to the cloud in the -- at the moment, except to say we did delay it during the peak trading period. It's back underway now. And we intend to get it landed in full as soon as possible in 2026, not least because we want the benefits, and you asked about those that they are basically in 2 parts. I mean, first, there are security benefits to migrating to a secure cloud.

But second, there's a significantly lower cost, and we talk about a GBP 10 million mature and at least a GBP 10 million mature annual benefit of getting that up and running, which is -- which we're keen to get after. So we're doing it as fast as we can.

Next question will be coming from Ben Hunt, Panmure Liberum.

Just on the Nordics, obviously, a very strong performance. You've referenced a bit of gross margin investment. Was there anything that sort of held back potential profitability there, be it investment in marketing, gross margin investment, as I said? Or is it a case of maybe keeping your powder dry? And I guess added to that, is there any reason why you couldn't see margins now go back to prior highs in quick succession?

Well, let me kick off with your first question, Ben. So again, I'll remind you, in the first half, the gross margins within the Nordics were flat. We saw the opportunity for us to accelerate our sales in what was becoming a very buoyant market over the November and December period. But I think it's critical to say, as Alex reflected, that we maintained our margin discipline. I think we've got a very good handle using our end-to-end knowledge of profitability to understand where we might want to turn up the dial, whether it be promotions or marketing or advertising or even price investments to be able to profitably grow our margin and our cash flow. So that's very much what we did.

So when you look at the 12% like-for-like, a component of that has come through our investments. And certainly, once we get to see the final market share numbers for the Nordic business, we expect to have benefited from that. I think in terms of more broadly, in terms of being able to get the Nordic margins -- EBIT margins back to where they were, I think we've been consistent with what we said that our goal is to get to at least 3% EBIT margins.

We're really pleased with the trajectory that we've seen over the course of this year and particularly over peak period. Now we are assuming in the profit guidance we've given in terms of the balance of the year that we expect sales to be in line with the first half. That's a prudent assumption. And I guess we'll talk more about expectations for next year as we get towards year-end.

All right. Great. And just on the new categories, how many extra SKUs are now in the business, compared to 18 months ago? And do you actually have any sort of anecdotal evidence perhaps of the cross-sell ability from those new categories that's coming in and people moving on to your core categories?

Yes, we haven't broken out the SKU count in quite that way, Ben, nor have we given numbers on the cross-selling. I mean what I would say is a couple of things. I mean, firstly, we are bringing more stock. We have judiciously invested in some more stock in the business, particularly in these new categories. But one of the things that we're pleased about is that we've come out of the peak trading period very clean on that stock. So it's sold through, which is tick.

Second, if you go into the Currys stores, one thing you will see is a greater number of the newer, more frequently purchased, more innovative categories in those stores. And that's one of the things that is important for driving traffic, driving footfall into the stores as well as for the sales of those categories.

Batteries, for example, was one of our best-performing accessories. It doesn't sound like the most exciting category, but it's a great thing to sell. Everyone needs them. And we shifted large numbers of Duracell over peak, and it gives customers a reason to come into the Currys store.

So the third thing I'd say is that it's worth remembering that we do have a stockless model for the long tail, so-called SBRE, we call it, range extension. And what that allows us to do is to experiment on the long tail without taking the stock risk ourselves. And if we can -- if we like it, it can come into stock a little bit later. I mean the overall SKU count in the U.K. is 24,000, which is up 7,000 year-on 2. But a big part of that, as I say, is drop ship.

Okay. And one final question, if I may. It's a bit cheeky, but I mean, quite a decent step-up in market share in the core category, 60 basis points. Who are you taking it off?

Yes, GFK, you don't break that out for us. So I mean I can't tell you precisely. I think you can draw your own conclusions from the fact that omnichannel wins in our market. And so you can draw your own conclusions about who we might be taking market share away from. I mean what's really clear is that customers prefer shopping through a mix of online and stores, and they value the specialism that we can provide as the specialist retailer in the category, and they value the services that we can provide that others cannot.

So we're big online and big in stores, we've gained market shares in both. We've seen the growth in recurring revenues that services provide up to 30% of our sales over peak, and that's a reflection of how appealing these services are to customers. So I would look to those who don't have the omnichannel offer at any scale. I would look to those who don't provide the services at any scale. And those are probably the ones who are doing less well.

[Operator Instructions]

We'll now go to Nicholas Barker of BNP Paribas.

So I want to start with credit adoption. So that's grown quickly in the U.K. and it's now 1/4 of sales. So how do you see credit adoption progressing from here? And what's the ceiling for it as a percentage of sales? And then my second question is take them one at a time.

No, no. Go ahead.

My second question is, you've already met your year-end target of 2.5 million iD mobile subscribers. Are you setting a new target at year-end? Or are you pausing here to regroup? How do you see things playing out for the rest of the year?

Let me take the iD one first, Nicholas. Neither of the above. We're neither publicizing a new target nor pausing in any way. The fact that we hit the full year target at this stage of the year is pleasing. But on we go and the profitable growth of iD continues.

As to your first question, I mean, we don't provide -- we don't set a ceiling on our credit adoption either. I mean we've got a slide in the pack that shows us overtaking some other people's credit adoption, but there's still an extra 1/3 of their sales are on credit. I mean we don't necessarily need to get to various 90% plus, but there's still significantly further headroom for growth here. I mean we're showing this growth time after time when we come back and talk to you in 200 basis points increase in adoption.

Customers find it compelling, particularly in this category. They obviously find our offer compelling enough. I mean the NPS is 12 points higher and they wouldn't be taking it. The adoption wouldn't be growing if they didn't. And of course, we've got every interest -- we've got every interest in continuing to grow it with a 10% higher spend on average from a credit customer with a 27% greater likelihood to return and shop in the following 12 months of a credit customer with the over to 2x lifetime sales as well as the healthy nontrivial direct profit contribution from credit.

So it's in everyone's interest to continue to grow it, including our partner bank because we're super responsible in who we lend to and how much we lend. So we've been able to grow this book clean. We could have grown it faster if we've been less discriminating, but we've been very picky to everyone's benefit and very, very careful on growing this book. So no, I mean, there's significantly further to go here. And I would expect and hope to be talking about further credit growth when we next get together.

Next question will be coming from Vandita Sood of Citi.

I've got two. Firstly, you flagged about GBP 40 million or so of cost savings on an annualized sort of mature state. This year, obviously, you had material headwinds around GBP 30 million. I know it's early, but any view into how these inflationary headwinds could look like going into next year? Could we be looking at sort of a net positive impact as a result of all your good work?

And secondly, just a quick one. Do you have a view of -- in the new categories, are you seeing a completely different profile of customer coming in? Or are you growing share of wallet with your existing customers? And are there more new categories in the pipeline that you wish?

So on your cost question, we were, I guess, pleased with the budget in that it wasn't as bad as we saw last year. So as you say, GBP 32 million worth of cost headwinds. The equivalent numbers for next financial year in terms of headwinds is high single-digit impact, a negative impact from living wage. But with the rates reform, the changes to the multiplier, et cetera, we are expecting to see a mid-single-digit upside year-on-year in terms of our rates bill. So net-net, you can see that we are expecting a negative impact from inflation, but it will be much smaller than we saw in this financial year.

And on the new categories you talk about, I mean, I think the short answer is that we serve 80% of U.K. households. We're the market leader. Our -- the distribution of our customers by socioeconomics and by age is pretty representative of the country as a whole. I mean that said, at the margin, as you might expect, when we look at things like smart wearables like the Oakley and Ray-Ban Meta AI glasses, they might -- they attract a slightly younger than overall. As we get bigger into categories like toys, whether it's Tony or LEGO or the others, again, that tends to attract younger parents.

But overall, I think one of the things about our scale is that we can bring these products to everybody. And everyone in that sense is our target customer. So -- and you asked about new versus existing and think about it as pretty broad-based. I mean clearly, we've got serving 80% of U.K. households, but only having 24% market share, we've got share -- we've got room to grow -- we've got headroom to grow our share of wallet, but we're also attracting new customers, too.

As to what's coming down the track, I mean, in one sense, we don't need to know because as soon as anyone has anything innovative, they bring it to us, whether it's a new supplier or an existing one with the first place they come to. So we can be -- we don't need to pick trends in advance. We can just exploit them as they develop, which gives you less to believe that we're going to pick up any new trend. That said, there are -- we do keep our eyes open, clearly, and the AI-powered technology in its various guises is going to continue to become a bigger thing.

There's real utility for customers. They're seeing it and they're increasingly asking for it. And that utility is making itself felt across a number of different product categories. It's driving the replacement cycle in premium mobile phones as customers really enjoy having an instant assistant, instant translate, the creativity and the productivity benefits that AI can provide them with, they're really beginning to see the benefits of.

Likewise, in computing, we've got 75 -- getting on to 75% market share of AI laptops. And as an increasing proportion of laptops are AI suitable, then more of that's going to come to us. I've talked already about wearables like the AI glasses, the meta glasses. Robots is a very rapidly growing category across the whole of our group, Nordics as well as the U.K. with things like floor care and, again, AI powered, which are all to the good.

So I would expect to see new form factors, new applications of AI, new types of device emerge and possibly quite rapidly as AI adoption and appreciation of its utility takes root. And we -- that's why we've invested so much and so carefully to build ourselves as the home of AI in customers' eyes, and we expect to benefit disproportionately as this trend continues.

Our next question will be coming from Adam Tomlinson of Berenberg.

Hope you can hear me okay?

We can.

So just first 2 questions, just a couple of general ones on the Nordics, if that's okay. So I think when we speak to people in the market, I still think that the quality of your Nordics franchise is somewhat underappreciated. So the first question is just, could you just give us a reminder, a quick recap on just what makes that such a high-quality asset and maybe with reference to its market share and its strength versus your U.K. operations? That's the first question.

The second question on the Nordics is in terms of the growth opportunity, you showed that helpful slide. I think it was just on the U.K. and Ireland, where you showed the new categories offering 3x or tripling your market size. I think that was just the U.K. and Ireland, but I'm just wondering how you think about the Nordics in that respect and the opportunity for new categories there?

Second question on the Nordics -- and then a third question, if I can, just on the U.K. Just pulling out that Glassdoor review improvement that you showed on the slide. I know analysts and investors do look at that, so I really hope that gets noticed, but really strong improvement there. So can you just give a summary of over the last few years, just how you've, I suppose, improved that colleague satisfaction. And obviously, that's been reflected in the Glassdoor review, but that would be great.

Thanks, Adam. So I'll take those in turn. We're delighted to take the opportunity to point to the quality of our Nordics business. I mean perhaps not everyone does notice that it's over 40% of the group. And it's -- we had, of course, a tough 2 or 3 years recently. But the long-term trend has been a business that's grown sales, grown customer satisfaction, growing profits and growing cash flow dependably over a decade prior to the recent problems and is back into that long-term trend. So -- and you asked about the quality measures. I mean it starts with market share. We've got 28% of the market in the Nordics, which is higher than our market share in the U.K. We're the market leader in both, of course, but we're more than twice the size of the nearest competitor in the Nordics.

We're significantly bigger online than anybody else as well as big in-store. And you get down to the bottom line, Nordics historically has been over the 3% EBIT margin target that we're we intend to do at least as well as that for the group. So you can conclude where we intend to get it back to. So that's on the financial side. But this is a business that deeply embedded into the fabric of the Nordics. It's one of -- you go to Denmark or Sweden or Norway and the Elgiganten and Elkjop brands are some of the most well-known brands in any category in those markets.

So you only have to go there to appreciate that. And the colleague engagement and the customer satisfaction, which are 2 really important lead indicators are also high and on the rise in both of those markets. So that's the short version of the quality of the asset.

Thank you for giving me an opportunity to draw everyone's attention to it. I mean in the U.K. and Ireland, you asked about the yes. That was the third one, I think, wasn't it. You asked about the growth and the TAM in Nordics and are we seeing the equivalent in the Nordics? The short answer is yes. I mean B2B is a bigger part of our Nordics business than it is in the U.K. It was the Nordics example that inspired our focus on B2B in the U.K., and it's still growing faster, 25% in the Nordics compared to 21% in the U.K. over peak.

So we've got some healthy internal competition on this dimension as well, which is -- as well as some meaningful collaboration on a joint initiative on this one. So that's all to the good. But when you look across new categories, B2B, I've just talked to Mobile, of course, and on services, you can think about a similar scale of opportunity relative to the core in the Nordics as with the U.K.

On the third, on Glassdoor, yes, thank you for picking that up, Adam. Not everyone does. But we pay a lot of attention to colleague engagement and capability, and we have done for some time. And it's not just because we're lovely people, it's because it's a commercial imperative. I mean in our category, it's very hard for the experience of the customer to be better than that of the colleague, which is why we pay so much attention to giving the colleagues good tools to work with, like electronic shelf-edge labels and headsets, why we invest a lot in their training so that when they talk to a customer about AI, the customer finds someone who knows what they're talking about, their careers. We give them career development options as we do now in the U.K. by filling 50% of corporate roles internally.

We give them good reward. I mean base pay is up 32% in the U.K. year on 3. We invest on well-being. We have over 1,000 mental health coaches and representatives available to our colleagues. We invest in better leadership so that they're well led and better communication so that they know what they need to do to do a good job and they're motivated to do it. And we invest in a growth mindset and performance-oriented culture, and I could go on.

And we do all of this, as I say, not just because it's the right thing to do, but because it has real commercial benefits. And you see -- and those improvements have come through particularly in the past 2 or 3 years and why we're really proud that amongst some really good top-tier retailers, we're currently at least rated as the best place to work, and we intend to keep that.

As we have no further questions, Mr. Baldock, I'll turn the call back over to you for any additional closing remarks.

Very brief closing remarks for me. Thank you, everybody. Strong peak trading and an upgraded profit outlook, resting on accelerating growth, good margin and cost disciplines, which is all translating through to improving free cash flow and shareholder returns. That's a good trajectory that we're on. We're happy with the trajectory, not yet with the score, plenty more in the tank, and we aim to get back to work right now to deliver it. Thank you all.

Good morning, and welcome to Currys Interim Results. We're joined today by Currys Group Chief Executive Officer, Alex Baldock; and Bruce Marsh, Group Chief Financial Officer.

Now I turn the call over to Alex. Please go ahead, sir.

Thank you. Good morning, everybody. A few words from me before I hand over to Bruce to take you through the numbers, then I'll be back with a short update on the strategic progress behind these numbers.

But of course, the full strategy update will come in January as usual. And they're promising numbers, too. I mean we're pleased with the strong results and a good trajectory. It's healthy growth that we're posting in sales, profit, free cash flow and shareholder returns and, of course, all resting on a net cash balance sheet. And this is driven by strong underlying performance in the U.K. and Ireland in the face of some quite strong headwinds.

We're growing revenue and market share and growing in the areas we said we'd grow with good margin and cost discipline, all of that offsetting most but not all of some unhelpful government cost headwinds. In the Nordics, meanwhile, we're pleased with the accelerating performance in a rapidly recovering market, showing big jumps in profit and cash flow and also showing good sales growth with discipline on margin and on costs. And all of this stems from a consistent strategy that's clearly working, as I'll say a bit about later. But now I'll hand over to Bruce.

Thank you, Alex, and good morning, everyone. So stepping through our first half financials. Group performance continues to strengthen, and we've seen growth across the board. Group revenue was GBP 4.2 billion, up 8% year-on-year and up 4% on a like-for-like basis.

Our adjusted EBIT stepped forward by 32% to GBP 54 million, giving an adjusted EPS of 1.6p. Our free cash flow at GBP 84 million was up by 68%, meaning that we finished the half with closing net cash of GBP 133 million. And finally, our shareholder returns in the half were GBP 46 million, which is GBP 16 million of dividend and GBP 30 million of share buyback.

So stepping through each market, starting with the U.K. U.K. revenue was strong, plus 6%, driven by our core strategic initiatives, and that resulted in U.K. like-for-like of plus 4%. We were pleased to see our recurring services revenues up by 11%, driven by iD Mobile.

Our adjusted EBIT in the U.K. did step back. It stepped back by GBP 4 million due to the government-imposed inflationary headwinds, but that was offset by volume and cost savings. And our adjusted EBIT margin stepped backwards by 20 basis points to 0.8%. Operating cash flow was relatively flat at GBP 33 million, and our segmented free cash flow was GBP 53 million, driven by lower cash profits and increase in adjusting items.

Looking at the U.K. EBIT waterfall. As I've said, the U.K. EBIT margin was down by 20 basis points, with gross margin down by 40 basis points and operating expenses favorable by 20 basis points. In both buckets, we were negatively impacted by the government's inflationary headwinds. And you'll remember, at the year-end, we talked about both National Insurance and National Living Wage giving a full year negative impact of GBP 32 million for this year.

So stepping through, gross margins, as I've said, backwards by 40 basis points in the U.K. All of that decrease is driven by those increase in colleagues costs across our supply chain and our service operation. Our actual underlying gross margins in the half were positive. Our operating expense to sales ratio was up by 20 basis points, and we saw cost increases and increased marketing across both iD Mobile and B2B, but these were more than offset by operational leverage and cost savings.

Moving on to the Nordics. We've seen strong performance across the board. From a revenue perspective, we've seen a big increase in sales. Our reported year-on-year was 11%, on a currency-neutral basis, plus 7%. And like the U.K, like-for-like was plus 4%. Our recurring services revenue were up by 4% on constant currency basis. And we're really pleased to say that our adjusted EBIT almost doubled to GBP 35 million, driving our EBIT margins up by 90 basis points to 2%.

Higher profit drove increases in operating cash flow to GBP 43 million, and our segmental free cash flow increased by GBP 44 million, and that's despite the fact that we doubled our spend on CapEx. In terms of the EBIT bridge for the Nordics, you can see that the whole of the 90 basis points improvement in EBIT came from operational leverage.

Overall, Nordics gross margins were flat year-on-year as we've continued to maintain a profit-focused discipline of not chasing less profitable sales. Operating expense to sales, plus 90 basis points as we maintained high cost control despite increases in volume. The cost in absolute terms were up just by single digits of millions, but we enjoyed significant operational leverage.

Moving on to group free cash flow. We enjoyed improved cash generation driven by increases in profit and working capital inflow. Operating cash at a group level was GBP 76 million, up GBP 15 million. Capital expenditure increased to GBP 31 million as we've invested in both stores and IT, although we've maintained tight control over spend. Exceptional items doubled to GBP 20 million, and these relate to restructuring and property costs, all of them are one-off in nature. And cash tax stayed low at GBP 2 million. Cash interest paid was broadly flat at GBP 7 million.

And finally, working capital. Working capital was an inflow, driven by volume, thanks to negative payday stock and tight control, meaning that overall inflow of GBP 68 million in the half, which gives free cash flow of GBP 84 million. The strong free cash flow was used for pension payments and shareholder returns. Dividend -- the final dividend for last year that was paid in H1 was GBP 16 million. Purchase of our own shares. Of the GBP 50 million that we've announced, we did GBP 30 million of share buyback in the first half. We also purchased our own shares for our employee benefit trust, which was a further GBP 13 million.

From a pension perspective, we made the final payment under the old arrangement before the actuarial review, which was a contribution of GBP 82 million. All of that was paid in the first half, and there will be no further pension payments in the second half. And overall, it gives a movement in net cash outflow of GBP 51 million and closing net cash at the end of the year -- sorry, at the end of the half of GBP 133 million.

In terms of our balance sheet, our balance sheet continues to strengthen. We've now improved by over GBP 900 million over a 6-year period, and we have no gearing. We finished the period with net cash of GBP 133 million, and our pension deficit dropped to GBP 16 million. Our capital allocation priorities remain unchanged. Our first priority is to maintain a prudent balance sheet. And as we've said previously, our year-end net cash will be at least GBP 100 million.

We will then pay required pension contributions, and the contributions for the coming years will be just GBP 13 million. We will then invest to grow profits and cash, and capital expenditure for this year will be around GBP 90 million, and looking forward, will be less than GBP 100 million. We will pay and grow ordinary dividends. As we've talked in the past, we will have a progressive dividend policy. And today, we're declaring a 0.75p interim.

And finally, any surplus cash flow will be available for share buybacks. And as I've said, of the GBP 50 million that commenced on the 4th of September, we've completed GBP 30 million in the first half, and we will resume the balance of that after our close period finishes on the 21st of January.

So finally, current year outlook and guidance. We continue to expect our full year profit and cash flow to grow this year. And trading since the end of the half 1 period have been consistent with Board's expectations. And as usual, we'll provide a full update on peak trading on the 21st of January. We're providing some specific updated guidance.

Total interest expense will be between GBP 60 million and GBP 65 million. Capital expenditure will be GBP 90 million compared to the GBP 95 million that we've said previously. And we are guiding to higher exceptional cash outflows that we expect to be around GBP 40 million on a full year basis compared to the previous guided GBP 30 million. And this relates to a delayed IT project where we've got dual running costs, and Alex will talk more about that in a moment.

In terms of shareholder returns, our total cash dividend payment for this year will be GBP 25 million, which includes the GBP 16 million final payment for FY '25 and the GBP 8 million interim dividend I've just described. And finally, the GBP 50 million share buyback program underway, we will complete the balance that is outstanding.

I'll now hand back to Alex.

Thanks, Bruce. And as usual, more to come in January on the strategy that's behind these results. But for now, I'll just say a few things. I mean, this is a clear strategy that we've been following consistently for some time that is evidently working. And it's a strategy that's based off having colleagues who know what they're doing and want to be working at Currys, who in turn make it easy for customers to shop and then get more of those customers to stick around us in stickier and more valuable customer relationships, Customers for Life in our language, which in turn drives higher profits and cash flow.

So starting with colleagues, I mean, we do have more capable and committed colleagues. Our engagement is firmly established in the top 5% of companies worldwide. And we've just become the first U.K. retailer to break 4.0 in Glassdoor, which is good. And that's translating into a better customer experience, and we're making it easier for customers to shop, in particular, the omnichannel model that customers prefer that we have and competitors don't and that we're investing in. And we can talk in Q&A, if you like, about the investments in stores and better tools and processes like electronic shelf-edge labels, headsets, sales floor leaders, which will drive lower cost and higher conversion.

And we are building stickier and more valuable customers, Customers for Life, particularly through the services and the solutions, which are so valuable to customers and to Currys. Services like installation, which is up in both the U.K. and the Nordics, in credit, in iD MVNO, and in the Nordics Customer Club, where customer numbers up 11% to over 10 million members now who account for more than half of Nordics revenue. And all of this is translating into higher profits and cash, as you've heard from Bruce, the good margin and cost discipline. But importantly, we're also now back into growth in areas like kitchens in the Nordics, new categories in the U.K. and B2B in both.

Let's take a quick closer look at the U.K. and Ireland. And there is good underlying momentum here with healthy sales growth of 6% in a market that's been going backwards by 1.2%, which means share gains -- healthy share gains of 60 basis points and with margin and costs well controlled. Now I said we're growing where we said we'd grow and B2B is a good example of that. B2B, as you know, the SME market is an adjacent one to our core B2C market and grows our total accessible market by 60%. So it's good that we're growing by 16%, 1-6 percent in the first half in B2B, and we're nicely on track to double the size of this business within 3 years.

And new categories, areas where we've historically been underweight, we're paying more attention to now. And so it's gratifying to see that grow by 35% in the first half, areas like health and beauty, up fully 69% within that. And growth in services and solutions, which are good for sales and margins and recurring revenues, which, by the way, are up 160 basis points now to over 30% of our sales. And services and solutions like credit, where we've had another strong half, adoption is up to over 23%, up 160 basis points. And this is good. It's good for customers, but it's also good for Currys. Credit customers spend more, they shop more often and they're twice the lifetime value.

iD Mobile had another good half. Subscriber numbers up 21% to 2.4 million. We'll now handily beat our full year 2.5 million subscriber target. And iD has inspired the launch of our first Nordics MVNO in Finland. So good momentum. Still in the interest of balance, not everything is going our way. We've mostly but not entirely been able to offset the government cost headwinds that you heard about from Bruce. We've worked hard to do that, but we haven't entirely offset it.

And equally, we haven't got everything right. I mean Bruce talked about a delayed IT program, which is disappointing. I mean we've had to pause the completion of the IT cloud migration into the new calendar year. It's a good project. It's well worth doing, migrating on-premises data centers to Microsoft Azure will in time yield a double-digit millions reduced cost -- total cost to operate, a mature annual cost benefit in the double-digit millions. It also future-proofs the business.

We have 90% completed this migration, but it should by now have been 100%. We've had some teething troubles. And so we chose to pause it in October to protect the peak trading period. It's the right decision, but it does -- delaying completion to 2026, it does mean dual running costs for a time, which will show up in the exceptionals.

One disappointment in a first half of many successes, but we do like to be self-critical, though it's hard to be too critical of our Nordics colleagues with their accelerating performance in a market that's coming back quite rapidly now. Their only blemish is a nudge down in H1 market share. But even with hindsight, we wouldn't do much differently. I mean we won't chase unprofitable sales, and we won't match some competitors in their aggressive promotions and store openings. We're not solving the market share, but we're solving for sustainable free cash flow, and we're happy with the healthy revenue growth that we've seen also in the targeted areas.

I mean, B2B in the Nordics grew at 12%. It's the #1 group-wide growth opportunity. But also kitchens, we have an Epoq kitchens brand in the Nordics, which is growing nicely at 30%. So good revenue growth, good margin, cost discipline, good cash conversion, which means those profits up by 94% and free cash flow up by 65%. A strong first half with more to come from the Nordics, which is on a good trajectory with accelerating performance.

So still, I mean, having said all of that, we do enjoy the benefits of scale. And we like being more than 2.5x the size of our nearest competitor. We get hard benefits from that. So we'll keep a close eye on market share trends, and we expect that to stabilize in the second half.

So in summary, not a first half without blemish, opportunities to learn and keep improving, but also plenty more to come, good opportunities for more quality growth to keep profits and free cash flow heading in the right direction with good continued margin and cost discipline, good opportunities to build on the strong momentum we've seen in a successful first half and a strategy that's working, that's allowing better shareholder returns and that's seeing business on a good trajectory, one that's on us to keep going and we can see how.

Finally, before I hand over to Q&A, I wasn't going to pass up the advantage of having all these affluent and time-poor consumers on this call. No doubt so busy that minds are only now turning to Christmas presents.

But never fear, we've got you with some amazing techs and astounding deals, and I'm hurry before we come to our senses on some of the pricing. I mean, on 2 examples I'll pick out, happy to take any more on Q&A, the aptly named De'Longhi Magnifica, an excellent bean-to-cup coffee machine, mere GBP 365 with GBP 165 off, pay nothing for 12 months and get it exclusively at Currys.

And while stocks last, I would tuck into the Shark CryoGlow face mask, only GBP 299 -- GBP 269, I should say. The -- in case anyone knows someone whose faces have blemishes, lines, wrinkles, tired eyes, well, the dual tech LED and cold tech will sort it out part of an electrification trend in health and beauty, which is bringing that category increasingly into our wheelhouse, showing 69% growth to show for it. So shop in-store or online, the U.K.'s #1 tech retailer this Christmas, a retailer whose performance continues to strengthen. We're pleased with today's promising numbers and trajectory, and we're determined to keep it going.

With that, I will pass to you for Q&A.

[Operator Instructions] Our first question this morning will be coming from Monique Pollard of Citi.

I also enjoyed the slide with the Christmas product. Maybe I can look into the LED mask. My first question was just on the U.K. budget and business rates. I'm just wondering what the net impact of that will be and whether that is actually a small tailwind for the business from April 2026.

The second question I had was on iD Mobile. Basically trying to understand a bit more why you're gaining share in a declining market, do you think? And then the final question I had, coming back to the budget. UK&I B2B sales up 16%. Obviously, you said you want to double that business in 3 years, you're targeting SMEs, taking learnings from the Nordics. Just wondered if there was anything either in the macro environment or specifically in the budget that may make that plan of doubling that business in 3 years more challenging to achieve?

Let me cover the first one for you in terms of the budget. So obviously, this financial year based on the budget 12 months ago was a very significant impact with, as we've described, GBP 32 million of headwinds. The good news is that the headwinds are significantly smaller as we look ahead to next financial year.

Taking each component in turn, first of all, in terms of the living wage, it's broadly where we anticipated it would be, very high single-digit millions impact year-on-year next year. The good news was that the changes that the Chancellor made to rates, both in terms of the plus and minus GBP 0.5 million ratable value, but also the changes to the rating values meant that we are expecting next year to see a small benefit year-on-year, let's call it, mid-digit single millions. So when you bring those 2 together, the overall net impact is single-digit mid-millions next year of headwinds. I hope that makes sense.

And let me take the next few questions, Monique. So on mobile, I mean, you rightly pointed out, we've got a growing share -- growing sales and share in a declining market. I think there's a couple of things behind that. I mean, first of all, we've had our historical troubles in this category as anyone who's been following us for long will know.

But those are behind us now. And we've got this back into profitable growth. We've got this -- we're leaning much better on the Currys machine and the scale that we enjoy across electricals as well for effective cross-marketing. We've got good partnerships with the handset manufacturers to whom we matter a lot more than just in mobile, the likes of Apple and Samsung and Google.

We have much broader partnerships with them. And so we're able to get preferential treatment. And we've got a good partnership with the network operators like Vodafone and Three. We also have got the power of iD behind our mobile growth.

And as you know, this is an MVNO that's growing very nicely for us, 21% growth in subscribers to 2.4 million and will handily exceed, as I said, our 2.5 million subscriber target for the full year. And here, very simply, we've got very good terms that we've secured for longer, thanks to the CMA that allow us to price quite aggressively, but still very profitably in this market. And that's the principal enabler of this healthy growth in iD alongside customer experience improvements like the app, which [ has got -- had ] good take-up.

So that's -- I mean that's the story in mobile. And we're in an area where we're underweight but catching up fast, and we see further headroom for growth even without any help from the market. Your last question was on SMEs. And no, we don't see an impact from the budget here on our plans. I mean, clearly, a better macro picture will be better all round. But our plans are independent of that.

And that's because this is a market where we are significantly lower in our starting market share than in our core B2C market. If you think about our market share in B2C is 24% and our market in B2B is nearer 4%, you won't be far off. So there's a lot more headroom for growth. But we've got everything it takes to be successful in this market with our suppliers, the products, the services, the solutions, the supply chain and service operations, the channels and the colleagues.

We built all of this. And we've got the 16% growth in the first half to show for it. So this is an adjacent market where we've got every right to win with much more fragmented competition. And we've built some momentum here. So there's a lot more to come in this space, irrespective of the policy and the macro environment.

Our next question will be coming from John Stevenson of Peel Hunt.

Just 2 questions from me. Just you mentioned in the strategy update, I don't know if you can talk a little bit more about the in-store service and operational improvements, particularly in light of higher staff costs. Is there still sort of tasks to take out of store while maintaining and driving service? And then secondly, I don't know if you can comment a little bit on the U.K. consumer. Obviously, the market gone backwards, you're taking share, but any sort of highlights, particularly as we're moving towards peak?

Yes. So let me start with in-store. And you're right to point out that we've had to work very hard to offset some, but not all of the headwinds we face. And that includes in-store. So store productivity has been significantly improved through initiatives like electronic shelf-edge labels, headsets and sales floor leaders. So what do I mean? So electronic shelf-edge labels rather than paper ticketing that we used to have with an innovation we started in the Nordics, it worked very well.

So we've rolled it out to now all stores in the U.K. And that improves the customer experience. It allows for significantly more dynamic pricing and allows us to make many more price changes much more often than previously. And it, of course, reduces costs. So that's one good example. Another good example is on the sales floor leaders and the headsets. What this basically means is a customer coming into a Currys store will be greeted more quickly and allocated to the right colleague immediately.

So it reduces wait time, it increases conversion and ATV because we've got the right colleague with the right customer and reduces downtime and therefore, colleague productivity. So we've worked really hard in the stores to achieve this. It's not just in the stores, though, but across the supply chain and the service operations, the right first-time initiative, for example, making sure that when we turn up to install a washing machine in a customer's home, we do so with the colleagues and the parts so we can do it there and then without incurring the cost of having to come back a second time.

That continues to bear a lot of fruit. And we've had to take some tough decisions here at head office. We've reduced our central overheads by 10% during the course of the year as well as right across the business going harder on areas such as automation, offshoring and outsourcing. So there's a lot going on in short, John, on the operational improvement front.

Second, you asked about the U.K. consumer. I mean it is muted, the confidence and spending both. And of course, we are in the box seat to see that serving as we do 80% of U.K. households. What we're seeing is consumers some concerns on employment, but more concern on a tax burden that's -- increasing tax burden from an already high base that's weighing down on real incomes. The best data on this will be the GFK Consumer Confidence tracker, as you'll know, and that's at historically low levels and has decreased further. It's decreased from minus 17% in October to minus 19% in November.

And our own market, as you pointed out, the technology market declined by 1.2% in the first half. So a muted consumer environment for sure. I think there's a couple of things to say though. I mean, one, we're planning cautiously. So when Bruce talked about expected a healthy growth in profits and free cash flow this year, we're not assuming any improvement in the consumers' outlook. So if we're surprised, it will be on the upside.

Second, importantly, we've built a business that's less dependent on the U.K. consumer. So over 40% of the group is now in the Nordics. It's going well, and it's an accelerating performance in a rapidly recovering market. And in the U.K., areas such as B2B and services and solutions are important in this context, too, because B2B operates on a different cycle from the U.K. consumer.

And of course, recurring revenues that come from areas such as our services and solutions, credit and iD, necessarily are less susceptible to swings up and down in consumer confidence. And when we've set out to grow in areas where we're underweight, areas such as mobile, such as new categories as health and beauty, those -- we have more headroom to grow again without being dependent on the underlying consumer confidence.

So we do believe, and we can see that we're building a more resilient Currys as well as a more successful one. And the evidence for that, we think, is in the results, I mean, healthy growth in sales, profit, free cash flow, shareholder returns. And in the U.K., we're growing sales at 6% in a market going backwards at minus 2% and building on 4 years of profit growth in the U.K. without any help from policy or from the market. So I hope that answers your question, John.

[Operator Instructions] We'll now go to Richard Chamberlain of RBC.

Three for me, please, if that's not too greedy. A couple on the Nordics then, just a follow up there. I see -- I think you've seen a little bit of share loss, albeit off a high level. I presume that's to the likes of the pure-play online retailers.

But I wondered if you're seeing overall kind of rational market in terms of competitive behavior and the margin situation there. And then again, on the Nordic, what are you seeing in terms of big ticket sales? I think you mentioned strong kitchen sales. Has that been driven by any -- there's some good innovation coming through in that business. I wonder what you're seeing there.

And then finally, on the stock intake. I think that's higher. To what extent is that just the sort of comps thing as a result of sort of disruption and so on last year? Are there some timing impacts there that are driving that higher stock intake?

Thanks, Richard. So I'll let Bruce take the stock question first, and I'll come back to the Nordics.

Yes. There are 2 factors that are causing stock to be up compared to last year. The first is, the impact of week 53 last year. So we had 53 weeks last year, which means this year, every week, it's bumped along. So our half year was much further into the peak cycle than it would have been 12 months ago. So that just naturally has increased our stock holding as our stock builds. The second is driven by volume. Obviously, we're showing healthy growth in both the U.K. and the Nordic business. And on that basis, to maintain availability, we've increased our overall levels of stock. So those would be 2 reasons.

On the share loss in the Nordics, Richard, you're right to observe, we did shave 60 basis points of market share off in the first half. I mean it was pretty evenly spread between categories. It was particularly concentrated in Finland, but we did see some in other markets as well.

And I think -- I mean, the short version is even with the benefit of hindsight, and we -- as you imagine, we look at this pretty carefully, we wouldn't do very much differently. We're not going to chase unprofitable sales. We're not going to price unprofitably on [ base or ] promotions. We're not going to open stores without prospects of paying back.

I mean we're solving for sustainable free cash flow here. And as long as we've got healthy growth in sales, profit and sustainable cash flow, then overall, we're reasonably happy.

Now that said, we like the benefits of scale that we get in this business, and we like being more than 2.5x the size of our nearest Nordics competitor. We get hard benefits, not least with our suppliers from that. So we keep a very close eye on this, but I wouldn't say we're happy to shed any market share. But -- it's not what we're solving for. But in an ideal world, we have a [ row of cherries ] and we have that heading in the right direction, too.

Now as it happens, we expect to see a stabilization of Nordics market share in the second half. So we'll come back to that a little later in the year. When you asked about the competitors, I mean, there is some aggression. And I mentioned some aggressive promotions and some store openings, but nothing irrational on the scale that we were seeing a few years ago.

And that's the main point to make here. I mean this is a market that's coming back. It's coming back on the bottom line as well as on the top line. So it's part of a big driver of the accelerating performance that we're talking about today in the Nordics and our confidence in the trajectory and that we will keep going on it.

You asked specifically about big ticket in the Nordics. We're quite pleased with Epoq and our kitchens business. It's a big kitchens business in the Nordics. If you're there, you'll see it everywhere and some really, really pleasing growth in kitchens, up 30% in the first half. I suppose one interesting thing about -- a couple of interesting things about kitchens.

Firstly, they tend to pull along MDA sales. So major domestic appliances like washing machines and fridge freezers and ovens and the like, they're pulled along when you sell a kitchen and vice versa. And second, kitchens is quite a useful lead indicator of consumer confidence, which is rising in the Nordics.

The markets are growing in the Nordics. And when it almost invariably either discretionary or house move-related kitchens sales are on the increase as healthily as they are, that's usually quite a good lead indicator for the future health of the consumer, one reason for our confidence in continuing the trajectory in the Nordics.

Next question will be coming from Nick Barker, calling from BNP Paribas.

Congratulations on the numbers. I was hoping you could just give me a little bit of color around looking into the full year. So with kind of approximately GBP 10 million beat in the first half and no change to full year guidance at this stage, that kind of implies flattish H2 profits year-on-year. Can you talk me through the puts and takes of this? That's my first question. And then my second question is about the new MVNO in Finland. It'd be great to hear a bit more about that and the thinking and rationale behind it.

I'll take the second part of your question first and then hand over to Bruce. It's very simple on the MVNO. I mean we've -- one of the benefits of having a group in a relatively homogenous category like technology is that we can try something in one country and be reasonably confident that if it works in Denmark, it will work in Ireland. And so it's proved many times in our business.

MVNO is the latest example of this. We've got a very successful and fast-growing MVNO in the U.K. We're building something that's a valuable asset, by the way, as well as an important and profitable part of the customer experience, up to 2.4 million customers in the U.K., and we're keen to try it elsewhere.

And Finland was the right place to start. It's a small market, so the stakes are lower. So it's a good place for trials. And it's also -- it's probably not the market in the Nordics where we have the strongest relationship with the mobile network operators. So for all of those reasons, it was a good place to try. I mean its relatively small scale. Subscribers are in the tens of thousands at the moment rather than anything bigger than that. But it's off to a good start, and we'll see where it goes from here.

Yes, as you probably expect me to say, we're not sharing any numbers in terms of guidance on a full year basis right now. We'll be back on the 21st of January. That session will cover all of peak trading, and we will guide you both profit and cash for the year.

[Operator Instructions] We'll now go to Wayne Brown of Panmure Liberum.

Can you hear me?

We can.

Great. So my question is the following. So Currys has come a long way in the last few years. And it was pretty obvious that there were some really things at the top of your agenda that needed sorting out a few years back. And I'm not going to go through the list but high debt pensions, et cetera. Obviously, the business is now in really good shape, much better shape. But if we had to take a step back and think about what's the 1 or 2 things that warrant most of your attention currently within the business?

Gosh. That's a big question, Wayne. So thank you for it. I mean there's a few things. I think the -- I mean, I won't repeat everything you've heard about the much better state that the business is in now and the strong foundations that we've built and the good momentum, as you know, that we're on with.

I mean there's a few things. I think that there's a -- this is an opportunity-rich environment for us. And one of the things that we're very focused on is making sure that we've got profitable growth in the business now, and we want to keep that going. I say profitable because it's really important that we maintain our margin and cost discipline, but we've done that. And there are some very, very opportunity-rich areas in the business.

B2B is the obvious example. Sorry to belabor the point, but it is really important. I mean this is our #1 growth opportunity in the Nordics and in the U.K., grew it by 12% in the Nordics, 16% in the U.K., but so much more to go. If we've got 4% market share in an area where we have just as much right to win as we do in the area where we have 24% market share, that gives you a sense of the kind of headroom -- long-term headroom that we're thinking of.

And it's not just the fact that we've got everything it takes to be successful ourselves, it's also the case that it's a much less competitive market where the competition is much more fragmented. So this is an area of real opportunity for us, which is why we're putting so much emphasis behind it. And that's one area of business.

But as you know, it's not the only growth area where you might say belatedly, but in any case, we are catching up in areas where we've historically allowed ourselves to become underweight, whether it's new categories like gaming or health and beauty or accessories. We are -- that's a catch-up game. But then there's new technology that's emerging and AI, rather surprised we've got to this stage of the call without it being mentioned, but here it is.

AI computing is a trend that's really biting. And we saw that in the 12% growth in AI computing in the first half. And it's an area that we are making our own. We need to maintain it. We're not getting complacent, but 70% plus market share in AI PCs, being the #1 partner for the likes of Microsoft and Google testify to that. So those are all the growth areas that we're focused on. That's kind of one way to answer your question.

The second thing that we're really focused on is building this business out into a true solutions provider. So much for the buzzword, but what does that actually mean? Well, we don't want to be sitting just between a powerful supplier and an occasionally flighty customer shifting a box and just selling a product.

Clearly, that's the heart of what we do for customers is to sell products. But it's not the only thing that we want to do. And increasingly, we've been able to help the customer not just periodically with a product sale, but all the time, through services and solutions right the way through the life of that product, solutions that allow them to afford the products in the first place with areas like credit to get started with it, in installation to give it longer life through repair and to get the most out of it through various subscriptions.

And that's not just nice for the customer that we're helping them and helping them in areas where they need help, it's also very good for us because it's an area of growth, it's high-margin growth, and it's also recurring revenues that now up to 30% of our sales that are being very good for Currys as well as being very good for the customer.

So those are 2 areas I would pick out, Wayne, as we need to keep this profitable growth going, and we believe we can because there's a lot of opportunity there. And we need to build -- continue the markets that we're on, again, with a lot more headroom to go on building out the growing high-margin recurring revenue-rich services and solutions that we are uniquely well placed to provide to customers. None of our competitors can do what we can do here as well as customers value it and are willing to pay for it.

We have another question just came in now. It's coming from Kate Calvert of Investec.

Just a quick question on future cost-saving opportunities in the U.K. You've obviously talked this morning about investing in the likes of electronics, shelf pricing, use of headsets, et cetera. And you mentioned that when you finish off this migration, it will give you some nice sort of cost saving benefits. Where is next really that you need to go to in terms of continuing to improve the efficiency of the business?

Well, I think you've used the word in your question, Kate. It is all around efficiency. So over the course of the last 4 or 5 years, I think most of the heavy lifting that we had in terms of fundamental fixes and maybe taking huge amounts of waste out of our organization have been dealt with.

So we're now looking at how do we fine-tune the business and get more effective from a process perspective, whether that be within our stores, whether it be on our online business, within our supply chain and service operation or indeed in our center and our IT costs. So a lot of our focus right now is looking at process, looking at end-to-end process which obviously is a bit of a longer term, but it's both about refining our cost base, but also refining the way that we work so we can be more effective.

As we have no further questions, Alex, I'd like to turn the call back over to you.

Yes. Thank you. And thank you very much for your attention this morning. I mean we are pretty pleased with the trajectory of the business. We're pleased with these strong results.

We're pleased with -- on every level with sales, profit and free cash flow and shareholder returns, all heading in the right direction of a base of engaged colleagues and happy customers.

More than that, we can see how to continue doing it. Some help from the policy and the market -- policy and market environment might be nice, but we don't need it. We don't need it to keep -- to show the healthy growth in profits and free cash flow for this year that we've talked to.

I will leave you not just with a happy Christmas, but with an encouragement to the -- as I say, to the cash-rich and time poor on this call to get yourself to a Currys store or online immediately to take advantage of some of these absurdly generous deals that we have on offer at the moment and will provide fantastic Christmas gifts for your loved ones. So happy Christmas, everyone, and look forward to picking it up with you in the new year.

Thank you very much. Ladies and gentlemen, that will conclude today's conference. Thank you for your attendance. You may now disconnect. Have a good day.