25 July
2024
ANNUAL REPORT 2023/24, NOTICE
OF ANNUAL GENERAL MEETING 2024 AND PROXY FORM
Currys plc (the 'Company') has today
published its Annual Report and Accounts 2023/24 and Notice of
Annual General Meeting 2024. These documents are available to view
on the Company's website at www.currysplc.com/investors.
In addition, they have been posted or otherwise
made available to shareholders depending on their elected method of
communication.
The Annual Report and Accounts have
been prepared using the single electronic reporting format
specified in the UK Transparency Directive European Single
Electronic Format ("ESEF").
In accordance with Listing Rule
9.6.1, the Annual Report and Accounts 2023/24, Notice of Annual
General Meeting 2024 and Form of Proxy have been submitted to the
National Storage Mechanism, where they will shortly be available
for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Company's 2024 Annual General
Meeting (the 'AGM') will be held at 11.00am on Thursday 5 September
2024 at Hilton London Kensington, 179 - 199 Holland Park Avenue,
London SW11 4UL.
Shareholders are encouraged to vote
in favour of all resolutions proposed in advance of the AGM, and to
submit any questions they may have for any member of the Board
to cosec@currys.co.uk.
Please submit your votes and questions before
11.00am on Tuesday 3 September 2024.
The information included in the
Appendix to this announcement has been extracted from the Annual
Report and Accounts 2023/24 and is reproduced here solely for the
purposes of complying with the requirements of Disclosure Guidance
and Transparency Rule ('DTR') 6.3.5 in respect of how to make
annual financial reports available to the public.
The content of this announcement,
including the Appendix, should be read in conjunction with the
Company's Preliminary Results announcement, which was released on
27 June 2024 and is available on the Company's website at
www.currysplc.com/investors.
Together, these announcements
constitute the material required by DTR 6.3.5 to be communicated to
the media in unedited full text through a Regulatory Information
Service. This material is not a substitute for reading the full
Annual Report and Accounts 2023/24. Defined terms used in the
Appendix refer to terms as defined in the Annual Report and
Accounts 2023/24. Page numbers and cross references in the Appendix
refer to pages and sections of the Annual Report and Accounts
2023/24.
Appendix
A. Principal
risks to achieving the Group's objectives (pages 54 to
59)
The Group recognises that taking
risks is an inherent part of doing business and that competitive
advantage can be gained through effectively managing risk. The
Group has developed and continues to evolve robust risk management
processes, and risk management is integrated into business decision
making. The Group's approach to risk management and risk governance
framework is set out in the Corporate Governance Report on pages 81
to 93. The risks are linked to the strategic priorities on pages 14
to 15.
Our
approach to horizon scanning and emerging risks
In order to promote sustainable
success, the business continues to analyse the risks likely to
emerge in the short, medium and longer term that may impact the
delivery of our strategy. To provide a view over the medium to
longer term, a horizon scanning approach is required.
Our approach to undertaking horizon
scanning is based on conducting both reviews of external thought
leadership and also through obtaining the views of key business
stakeholders on emerging risks. The horizon scanning exercise is
updated at least semi-annually to ensure that the horizon is
consistently scanned for developments and changes that may impact
the business. The Risk Committee is asked to review and discuss the
horizon risks and to form a view as to whether any of these should
be considered a principal risk.
Risks and potential impacts
The Group continues to develop its
risk management processes, fully integrating risk management into
business decision making. The risk management process mirrors the
operating model with each business unit responsible for the ongoing
identification, assessment and management of their existing and
emerging risks. The output of these assessments is aggregated to
compile an overall Group level view of risk.
The principal risks and
uncertainties, together with their potential impacts and changes in
net risk since the last report, are set out in the tables below
along with an illustration of actions being taken to mitigate
them.
Key
changes to the Risk Profile
During 2023/24 a number of changes
were made to the Group Risk profile, these included:
·
The supply chain logistics risk has been removed
as a principal risk due to being consistently assessed as low, and
aspects such as rising costs/inflation forming part of the
macroeconomic environment risk. The remaining supply chain sourcing
risk has been renamed to supply chain resilience.
·
The financial services regulation risk has
increased in likelihood due to the heightened regulatory landscape
and associated increase in regulation and legislation.
Principal risks and
uncertainties
|
1. Business
Continuity/IT disaster recovery
|
Risk owner:
Chief
Operating Officer
|
Risk Category:
Operational
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
Yes
|
What is the risk?
A major incident impacts the Group's
ability to trade and business continuity plans are not effective,
resulting in an inadequate incident response.
|
|
What is the
impact?
• Reduced revenue and
profitability
• Deteriorating cash flow
• Reputational damage
• Loss of competitive
advantage
|
|
How we manage
it
• Business continuity and crisis
management plans in place and tested for key business
locations.
• Enablement of home working for
office based and contact centre colleagues.
• Disaster recovery plans in place and
tested for key IT systems and data centres.
• Cross functional crisis team to
manage response to significant events.
• Major risks insured.
• Business Continuity
Policy.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
2. Business
transformation
|
Risk owner:
Chief
Information Officer
|
Risk Category:
Strategic
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
Yes
|
What is the risk?
Failure to respond with a business
model that enables the business to compete against a broad range of
competitors on service, price and/or
product range.
Failure to optimise digital
opportunities.
Failure to respond to changes in
consumer preferences and behaviours.
|
|
What is the
impact?
• Reduced revenue and
profitability
• Deteriorating cash flow
• Reduced market share
|
|
How we manage
it
• Continued strengthening of digital
expertise as part of omnichannel capability.
• Transformation Programme office
established and delivering key strategic objectives.
• Development of customer credit
propositions.
• Enhancement of data analytics
capabilities.
• Robust portfolio
governance.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
3.
Crystallisation of legacy tax issues
|
Risk owner:
Chief
Financial Officer
|
Risk Category:
Financial
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
No
|
What is the risk?
Crystallisation of potential tax
exposures resulting from legacy corporate transactions, employee
and sales taxes arising from periodic tax audits
and investigations across the
various jurisdictions in which the Group operates.
|
|
What is the
impact?
• Financial penalties
• Reduced cash flow
• Reputational damage
|
|
How we manage
it
• Board and internal committee
oversight actively monitors tax strategy implementation.
• Appropriate engagement of third
party specialists to provide independent advice where deemed
appropriate.
• The Group remains committed to
achieving a resolution with HMRC in relation to open tax
enquiries.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
4. Data
protection
|
Risk owner:
Chief
Information Officer
|
Risk Category:
Regulatory
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life
Considered in the Viability
statement:
No
|
What is the risk?
Major loss of customer, colleague or
business sensitive data.
Inadequacy of internal systems,
policy, procedures and processes to comply with the requirements of
EU General Data Protection Regulation
('GDPR').
|
|
What is the
impact?
• Reputational damage
• Financial penalties
• Reduced revenue and
profitability
• Deteriorating cash flow
• Loss of competitive
advantage
• Customer compensation
|
|
How we manage
it
• The operation of a data management
function to ensure compliance with GDPR operational processes and
controls.
• The operation of a data protection
office to ensure appropriate governance and oversight of the
Group's data protection activities.
• Control activities operate over
management of customer and employee data in accordance with the
Group's data protection policy and processes.
• Investment in information security
safeguards.
• IT security controls and
monitoring.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
5. Financial,
liquidity and treasury
|
Risk owner:
Chief
Financial Officer
|
Risk Category:
Financial
|
|
Risk movement:
Stable
Link to
strategy:
Grow
profits
Considered in the Viability
statement:
Yes
|
What is the risk?
Failure to manage Currys' access to
sufficient liquidity at any given time may impact our ability to
meet our obligations and business growth plans.
|
|
What is the
impact?
• Committed funding facilities could
be fully utilised if not monitored limiting our ability to invest
in the business, pension scheme or distribute to
shareholders.
• Knock on detrimental impacts on
other areas of liquidity, for example credit insurers decreasing
cover which could result in working capital outflow or suppliers
reducing payment terms.
• Given the external lending
environment, the ability to raise further funding could be more
difficult.
|
|
How we manage
it
• Regular monitoring of cash and
liquidity levels takes place at the Tax and Treasury
Committee.
• Bank facility and covenant cover
levels are reviewed and negotiated.
• Capex prioritisation sessions are
undertaken by the Executive Committee to identify cost saving
initiatives.
• Triennial pensions revaluation
process.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
6. Financial
services regulation
|
Risk owner:
Chief
Commercial Officer
|
Risk Category:
Regulatory
|
|
Risk movement:
Increased
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
Yes
|
What is the risk?
Failure to manage the business of
the Group in compliance with FCA regulation and other financial
services regulation to which the Group is subject in a number of
areas including insurance operations and consumer credit
activities.
|
|
What is the
impact?
• Enforcement action by the
regulator
• Loss of authorisation and inability
to trade regulated products
• Reputational damage
• Financial penalties
• Reduced revenues and
profitability
• Deteriorating cash flow
• Customer compensation
|
|
How we manage
it
• Board oversight and risk management
structures monitor compliance and ensure that the Company's culture
focuses on good customer outcomes.
• Regulatory Compliance Committee,
Product Governance and other internal governance
structures.
• Financial Services Risk Management
Framework in place.
• Compliance monitoring and internal
audit review of the operation and effectiveness of compliance
standards and controls.
|
|
Changes since last
report
This risk
has increased in likelihood over 2023/24.
|
|
|
|
| |
|
7. Health and
Safety
|
Risk owner:
Chief
Operating Officer
|
Risk Category:
Operational
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
Yes
|
What is the risk?
Failure to prevent injury or loss of
life to customers, colleagues, contractors, franchisee partners,
agency staff and the public which may have serious financial and
reputational consequences.
|
|
What is the
impact?
• Employee/customer illness, injury or
loss of life Reputational damage
• Financial penalties
• Legal action
|
|
How we manage
it
• Group Health and Safety
strategy.
• Comprehensive Health and Safety
policies and standards supporting continued improvement.
• Operational Health and Safety teams
located across business units.
• Risk assessment programme covering
retail, support centres, distribution and home services.
• Incident reporting tool and
process.
• Health and Safety training and
development framework.
• Health and Safety inspection
programme.
• Audit programme including factory
audits for own brand products and third party supply
chains.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
8. Information
security
|
Risk owner:
Chief
Information Officer
|
Risk Category:
Technology
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
Yes
|
What is the risk?
Inadequate governance and control
around information security could result in an information security
breach compromising the confidentiality, integrity and/or
availability of customer, colleague or supplier data.
|
|
What is the
impact?
• Reputational damage
• Financial penalties
• Reduced revenue and
profitability
• Deteriorating cash flow
• Customer compensation
• Loss of competitive
advantage
|
|
How we manage
it
• Significant investment in
information security safeguards, IT security controls, monitoring,
in-house expertise and resources as part of a managed information
security improvement plan.
• Information security policy and
standards defined and communicated.
• Technology Risk Forum with
responsibility for oversight, co-ordination and monitoring of
information security policy and risk.
• Infosec training and awareness
programmes for employees.
• Audit programme over key suppliers'
information security standards.
• Introduction of enhanced security
tooling and operations.
• Ongoing programme of penetration
testing.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
9. IT systems and
infrastructure
|
Risk owner:
Chief
Information Officer
|
Risk Category:
Technology
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
Yes
|
What is the risk?
A key system becomes unavailable for
a period of time impacting our ability to trade and continue
operations.
|
|
What is the
impact?
• Reduced revenue and
profitability
• Deteriorating cash flow
• Loss of competitive
advantage
• Restricted growth and
adaptability
• Reputational damage
|
|
How we manage
it
• Ongoing IT transformation to align
IT infrastructure to future strategy.
• PEAK planning and preparation to
ensure system stability and availability over high-demand
periods.
• Individual system recovery plans in
place in the event of failure which are tested in line with an
annual plan, with full recovery infrastructure available for
critical systems.
• Long term partnerships with tier 1
application and infrastructure providers established.
• A mature IT service design and
transition process controls and manages the transition of new and
changed services into production.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
10. Macroeconomic
environment
|
Risk owner:
Chief
Financial Officer
|
Risk Category:
Strategic
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
Yes
|
What is the risk?
The external macroeconomic
environment in which we operate remains challenging with a range of
existing, evolving and new emerging risks driving pressure on our
financial performance.
|
|
What is the
impact?
• The potential for increased
operating costs to Currys plc
• The potential for external factors
to impact consumer demand which may in turn result in electrical
spend by customers
|
|
How we manage
it
• Rolling forecast to analyse future
expected performance across the financial year.
• Business plan updates to the
Executive Committee to analyse the investment initiatives taking
place and progress against delivery and financial benefits,
alongside more detailed daily and weekly training
performance.
• Cost flexibility in operating
model.
• Hedging strategy in place (for
foreign exchange and energy).
• Expanding the availability of our
credit and service offerings for customers.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
11. Product
safety
|
Risk owner:
Chief
Operating Officer
|
Risk Category:
Operational
|
|
Risk movement:
Stable
Link to
strategy:
Customers
for life
Considered in the Viability
statement:
No
|
What is the risk?
Unsuitable procedures and due
diligence regarding product safety, particularly in relation to OEM
sourced product, may result in poor quality or unsafe products
provided to customers which pose risk to customer health and
safety.
|
|
What is the
impact?
• Financial penalties
• Reduced cash flow
• Reputational damage
|
|
How we manage
it
• Factory audits conducted over OEM
suppliers.
• Technical evaluation of OEM products
prior to production.
• Product inspection of OEM products
prior to shipment.
• Monitoring of reported
incidents.
• Safety governance reviews conducted
by internal by Technical and Business Standards teams.
• Establish protocols and procedures
to manage product recalls.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
12. Supply chain
resilience
|
Risk owner:
Chief
Operating Officer
|
Risk Category:
Operational
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life, Colleagues
Considered in the Viability
statement:
No
|
What is the risk?
Failure to actively understand,
manage and deepen key supplier and
brand relationships who contribute
materially to our business weakens
our ability to respond to external
shocks.
|
|
What is the
impact?
• Disruptions to supply of
goods
• Pricing and stock availability terms
could worsen, leading to deceasing sales/reduced margin
• Reduced revenue and
profitability
• Deteriorating cash flow
• Reduced market share
|
|
How we manage
it
• Ensuring alignment of key suppliers
to future strategy and meetings with strategic suppliers'
management.
• Continuing to leverage the scale of
operations to strengthen relationships with key suppliers and
maintain a good supply of scarce products.
• Working with suppliers to ensure
availability of products through key supplier group engagement
programme.
• Ethical supply chain due diligence
over our supplier base.
• Control structures to ensure
appropriate supplier relationship management for GFR, GNFR and
OEM.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
|
13.
Sustainability
|
Risk owner:
Chief
People, Communications and Sustainability Officer
|
Risk Category:
Strategic
|
|
Risk movement:
Stable
Link to
strategy:
Easy to
shop, Customers for life
Considered in the Viability
statement:
No
|
What is the risk?
Our commitment to sustainability and
being a good corporate citizen is either not delivered or not
adequately communicated to, or recognised by, customers and
investors.
|
|
What is the
impact?
• Reduced cash flow as customers shop
elsewhere
• Reputational damage
• Loss of competitive
advantage
|
|
How we manage
it
• Roadmap to Net Zero by
2040.
• Commitment to EV100.
• Oversight from the Group
Sustainability Leadership Team, ESG Committee, ExCo and the
Board.
• Group ESG strategy regularly
reviewed
• Independent reviews on environmental
practices e.g. CDP.
• Partnerships with reputable external
agencies Circular Electronics Partnership (on circular economy),
British Retail Consortium (on climate change), Digital Poverty
Alliance.
• Management reporting on progress
against target for e-waste and emissions with metrics for both
included in annual bonus scorecard.
|
|
Changes since last
report
This risk
has remained stable over 2023/24.
|
|
|
|
| |
B. Responsibility Statement
(page 142)
We confirm that to the best of our
knowledge:
•
the financial statements, prepared in accordance
with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit
or loss of the Company and the undertakings included in the
consolidation taken as a whole; and
•
the Strategic Report includes a fair review of the
development and performance of the business and the position of the
issuer and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and
Accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Group's position and performance, business model and
strategy.
By Order of
the Board
Alex Baldock, Group Chief
Executive
Bruce Marsh, Group Chief Financial
Officer
26 June 2024
* The directors of Currys plc as at
26 June 2024 are listed on pages 74, 76 and 77 of the Annual Report
and Accounts 2023/24.
ENDS
For further information:
Dan Homan
Investor Relations Director
+44 (0)7401 400442
Sarah
Thomas Deputy
Company Secretary
+44 (0)7401 373
188