Currys has agreed a covenant relaxation deal with the trustees of its defined benefit (DB) pension scheme, agreeing to reduce the contributions to the scheme over the next two years as part of this.

The group’s latest financial update explained that trading conditions have deteriorated, particularly in the Nordics, revealing that, at year-end, net indebtedness leverage was 2.91x and total indebtedness fixed charge cover was 1.42x, outside of the group's targets.

In an effort to address this, the group confirmed that it has taken action to reduce costs and capital expenditure, cutting pension contributions from £78m to £36m and £50m in 2023/24 and 2024/25 respectively.

Contributions will then resume at £78m per annum until December April 2028, with a final payment of £43m in 2028/29, when the deficit is scheduled to be closed.

The decision was made following completion of the triennial valuation as of 30 March 2022, which revealed "substantial improvement" in the scheme's funding, as the deficit fell from £645m in March 2019 to £402m as of March 2022.

The trustee attributed this improvement to the £164m in company contributions, and investment outperformance, offset by changes in inflation and other assumptions.

The accounts also confirmed further improvements since this, as further company contributions and favourable movement of scheme assets and liabilities saw the actuarial deficit cut to £300m as at end of April 2023.

As part of the triennial valuation, Currys also agreed to matching on shareholder distributions such that distributions above £nil for 2023/24, above £12m for 2024/25 and above £60m for 2025/26 onwards will be matched be equal additional contributions to the pension scheme.

Consistent with these actions and cognisant of the uncertain economic outlook, the board also decided not to declare a final dividend for the 2022/23 financial year.

Commenting on the annual report, Curry’s group chief executive, Alex Baldock, stated: "We've had a very mixed year. Our strengthening UK&I performance shows our strategy is working well. But our long track record of success in the Nordics was brought to an abrupt halt.

“Our market has been tough everywhere, with depressed demand, high inflation and unforgiving competition. I'm proud of how our colleagues rose to this challenge, continuing to bring the benefits of technology within easy reach of millions of customers - to you all, thank you.

“Looking ahead, we're wary of optimism about consumer spending power. Accordingly, we're being prudent in our planning, and in further strengthening our balance sheet. Our focus is on continuing a very encouraging trajectory in the UK&I while we get the Nordics back on track, and being attentive to mitigating any downside risk.

"We may be cautious in our promises for the short-term, but our confidence is undimmed as we build a stronger and more resilient business that is fit to prosper in the longer term."

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