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Comet sales weakness takes the shine off Kesa Electricals
Wednesday, 22nd June 2011
Electrical retailer Kesa Electricals Statement said it made further progress in the year to end-April and overall gained market share whilst gross margin remained stable. There was a significant increase in web generated sales. Kesa said improved profitability at Darty France and Vanden Borre reflect the strength of the Darty concept, while strong turnaround plans have commenced at Comet.
Group revenue increased 2.2% to €5.917bn (2010: €5.789bn), an increase of 0.7% in constant currency terms and a decrease of 1.8% on a like-for-like basis.
Group retail profit declined 2.7% to €107m (2010: €110m), a decline of 2.9% in constant currency.
Adjusted group profit before tax increased 2.3% to €93.2m (2010: €91.1m).
Adjusted EPS increased 2.8% to 10.9 cents (2010: 10.6 cents).
Free cash flow was €112.3m (2010: €165.4m) with net cash at the year end of €121m (2010: €91.1m).
The Board is recommending a final dividend of 4.75 cents per share, bringing the total dividend to 7.0 cents per share, an increase of 6.1% on last year's 6.6 cents per share.
In France Darty had a strong start and end to the year in the World Cup and digital switch over periods. Overall Darty outperformed a market estimated to be slightly negative with market share gains particularly in vision. Total revenue grew by 4.6% compared to the same period last year, and by 2% on a like-for-like basis.
Comet saw a positive start to the year with a strong World Cup campaign and successful delivery of a one-off multi-media initiative. The record trading over the Christmas and New Year period failed to offset the earlier weakness in the market and tougher trading conditions in the final quarter, post the VAT increase. Overall Comet lost a small amount of market share in a market estimated to have been flat, particularly in large white goods against a very strong performance in the prior year. As a result total revenue was £1.537bn, a fall of 6.8% in constant currency compared to the same period last year and a fall of 7.7% on a like-for-like basis.
Thierry Falque-Pierrotin, CEO, commented: "We have made progress against our strategic agenda despite the challenging market conditions. Overall we remained ahead of our markets, successfully grew our profitable web sales, improved the results of Darty France and have taken actions to improve performance at the other businesses.
"We anticipate all our markets will be challenging for the current financial year, particularly in the first half against the World Cup comparatives of last year. However from improved market positions in most of our markets, further cost measures in all countries with specific restructuring at Comet, BCC and Darty Spain and the strength of our cash generation and balance sheet, we are well prepared for these conditions. We remain focused on delivering our strategic plan - further rolling out our specialist business model and improving profitability across the Group. "
David Newlands, Chairman, commented: "Overall the Group continued to demonstrate its resilience to difficult market conditions and I am pleased that our earnings position and continued strong cash generation have enabled us to recommend an increase in the total dividend for the year of 6.1% to 7.0 cents per share.
"We have a strong turnaround plan for Comet to restore its profitability in the medium term and in parallel we are examining strategic alternatives to ensure the best overall value for shareholders."
Story provided by StockMarketWire.com
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