British electricals retailer Currys (CURY.L) warned on Thursday that price rises were inevitable after the government's tax raising budget but still kept its forecast for annual profit growth.
The group, which sells consumer electricals such as computers, televisions, fridges, washing machines and tumble driers, reported a return to first half profit, with robust sales in its home market more than offsetting subdued trading in its Nordics business.
It said that trading since the end of its first half has been consistent with the board's expectations.
"Looking ahead, we're confident of continuing our progress, and expect to grow profits and cashflow as promised this year," CEO Alex Baldock said.
He said this was despite "new and unwelcome headwinds from UK government policy" - a reference to measures in the new Labour government's October budget.
"These will add cost quickly and materially, depress investment and hiring, boost automation and offshoring, and make some price rises inevitable," he said.
Currys, a takeover target earlier this year, makes the majority of its profit in its second half, which includes the key Black Friday and Christmas trading periods.
For the six months to Oct. 26 it made an adjusted profit before tax, its preferred profit measure, of 9 million pounds ($11.5 million), versus a loss of 16 million pounds in the same period last year.
Revenue rose 2% at constant exchange rates to 3.9 billion pounds, with like-for-like sales up 2% - up 5% in the UK and Ireland division but down 2% in the Nordics.
($1 = 0.7822 pounds)
