Kesa’s profits slump as sales at Comet, BUT slow down

LONDON: Annual profits of Kesa Electricals Plc., owners of consumer electronics chain Comet and French market leader Darty, slumped 19 per cent as its sales were affected both in Britain and France. The company said its net income for the year ended 31 January stood at 94.2 million pounds against 115.7 million pounds a year earlier.

Annual sales grew 3.6 per cent to 4.1 billion pounds, it said.

Kesa Electricals had on 14 March rejected a takeover bid from an unnamed private equity fund for 1.72 billion pounds in cash. The company had been facing price deflation, and its Comet chain had been struggling to ward off competition from supermarkets and online retailers.

The company, however, maintained that overall trading since the end of 2005 has improved, through it is too early to predict whether the trend will continue.

Chief executive Jean-Noel Labroue said the sales have been led by increasing demand for new technologies, particularly flat screen televisions, MP3 players and DVD recorders, while sales of high-margin goods like refrigerators remained weak. The sales mix had a negative impact on profit, he said, in spite of cost control measures and margin management by category.

Profit at Comet saw a 21.4 per cent slump, while at Darty it fell 7.3 per cent and at the BUT furniture and electricals chain in France 17.6 per cent. BUT faced intense competition from rivals like Ikea and PPR SA’s Conforama unit.

During the fiscal, the company reduced its debt by 44.4 million pounds to 166.3 million pounds.

Kesa is raising its dividend by 10 per cent to 12.1 pence a share.

The company’s shares closed at 325 pence Tuesday valuing the company at 1.72 billion pounds.