Kesa Electricals Plc, the 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 continue to be “tough.”
The adjusted pretax loss was 13.6 million euros ($18 million) in the six months through Oct. 31 compared with a profit of 25 million euros a year earlier, London-based Kesa said today in a statement. The interim dividend was held at 2.25 cents.
Business in France, Spain and Italy has declined as consumers across Europe rein in spending on non-discretionary items such as electronic products and kitchens. The retailer announced plans to exit the money-losing Comet chain on Nov. 9 through a deal with OpCapita LLP in which it pays the investment firm 50 million pounds ($78 million) to take on the 248-store chain.
In France, Spain and Italy “political risk is rising, austerity measures are growing and consumer confidence is fading,” Citigroup analyst Ben Spruntulis said in a report before the release. “This weak macro environment drives clear downside risk for calendar 2012 earnings.”
Kesa fell 6.1 percent to 81.7 pence in London trading yesterday.
Excluding Comet, Kesa’s retail arm made a profit of 16.5m euros in the six months to the end of October, compared to a profit of 38.8m euros a year earlier.
Chief executive Thierry Falque-Pierrotin said there was some positive news from other European economies: “A strong performance in Belgium and… an improving trend in Turkey, the Netherlands and Spain.”
He said the company was “well prepared” for the peak season and had cut its costs by 7%, the benefits of which would be seen in its next half-year results.
Although revenues at the group fell 7.9% to 2.57bn euros, gross margins improved due to a strategy of focusing on small domestic appliance sales that are more profitable, the group said.
The BBC reports on the diposal of Comet by Kesa in the following video which interestingly raises the fear that stores may be closed in aas little as eighteen months.