Kesa's UK performance suffers in H1 2011

Parent company of Comet sees overall growth despite UK loss

Comet parent company Kesa Electricals has defended its UK arm’s performance, despite it posting a €6.4m (£5.4bn) loss for the six months ended 31 October 2010.

In a financial statement for the first half of its 2011 financial year, the firm said Comet saw a ‘positive start’ to the year with a strong World Cup campaign, but ‘difficult conditions’ in Q2 took over.

The UK business posted a total revenue of €864.1m, a decline of 2.6 per cent in constant currency and a fall of 3.7 per cent on a like-for-like basis.

Online sales for Comet increased eight per cent and now account for 14.6 per cent of all product sales. According to the financial statement, Comet has ‘started to take significant actions to improve its future performance’, including revamping stores, new staff uniforms and renewed advertising campaigns. It also unveiled a new web site last month.

Overall, Kesa Electricals, which owns the Darty brand across Europe, saw a 4.1 per cent increase in group revenue to €2.77bn, compared with €2.44bn in financial year 2010.

Pre-tax profit for the period stood at €25m, compared with €16.4m the previous year. The group has a solid cash position with €120.8m in the bank, a slight drop on the €128.7m cash in 2010.

Brushing off growing rumours of a break-up of the group, Thierry Falque-Pierrotin, chief executive of Kesa Electricals, said: “During the first half we continued to deliver an improved operating performance while taking actions to implement the Darty concept in all our markets.

“We increased profitability at Darty France, continued to successfully grow our web sales, accelerated the growth of Darty Italy and took a number of actions in the UK, Spain and the Netherlands to build longer term performance.

“We have prepared all our businesses for what we expect to be a competitive peak trading period and will continue to implement self-help measures in order to face an increasingly uncertain market environment,” he added.

David Newlands, chairman of Kesa Electricals, added: “The group continues to trade robustly in challenging market conditions and I am pleased that our earnings growth and continued cash generation have enabled us to declare an increase in the interim dividend of 15 per cent to 2.25 cents per share.”