Kesa Electricals Reports First-Half Loss as All Units Worsen
Kesa Electricals Plc (KESA), the European electronics retailer that’s selling its U.K. Comet chain, reported a first-half loss after sales deteriorated in all its main divisions, and said market conditions remain “tough.”
The adjusted pretax loss was 13.6 million euros ($18 million) in the six months through Oct. 31 compared with a 25 million-euro profit a year earlier, London-based Kesa said today in a statement. The dividend was held at 2.25 cents a share.
Kesa agreed last month to offload its money-losing Comet unit to focus on markets such as France, where the consumer- electronics market declined more than 5 percent in the first half. Sales at the French Darty chain, which will represent more than two-thirds of the group total after Comet is sold, fell 2.4 percent as the unit increased its leading share of the market.
“Kesa is a pure play on the European consumer, and France in particular,” Kate Calvert, an analyst at Seymour Pierce said in a report. “The European financial crisis and the implementation of austerity packages across its markets means consumer demand has already started to weaken.”
Kesa fell 4.2 percent to 78.2 pence at 9 a.m. in London trading. The shares have fallen 51 percent this year, about the same as U.K.-based competitor Dixons Retail Plc.
The sale of Comet to investment firm OpCapita LLP will go ahead as planned on Feb. 3, subject to shareholder approval, Chairman David Newlands said on a conference call. OpCapita has an agreement for the 40 million-pound asset-backed lending facility needed to complete the deal, he said.
Finance Director Dominic Platt said there will be no further cash contribution to OpCapita to supplement its working capital. The retailer is paying the investment firm 50 million pounds ($78 million) to take on the 248-store chain.
Comet’s loss widened to 25.7 million euros in the first half, from 6.4 million euros a year earlier, Kesa said.
So-called retail profit at the French Darty chain fell 27 percent to 43.5 million euros. Promotions are increasing, though the situation is “manageable,” Chief Executive Officer Thierry Falque-Pierrotin said on the conference call.
Profit on the same basis at Kesa’s other established- markets unit, which includes BCC, Vanden Borre and Datart, fell to 3.7 million euros from 4.7 million euros last year. The loss at the developing-markets division, which includes Darty Italy, Turkey and Spain, widened to 22.1 million euros.
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