Kesa year profit in line with forecasts

By James Davey

LONDON (Reuters) - Kesa Electricals, Europe's third-biggest electrical goods retailer, said 2008-09 profit had met expectations, despite sales falling at a faster pace in the first months of 2009 than at the end of last year.

Kesa, which owns French market leader Darty, Britain's second-biggest electrical goods retailer Comet, and trades in another 10 countries, also said Thursday it had a net cash position.

Sales at stores open at least a year fell 7.5 percent in the January 9 to April 30 period. That followed a 5.5 percent fall in the 10 weeks to January 8.

"During the period, overall the group traded in line with its markets. A strong focus on managing gross margin and costs helped us deliver a cashflow and retail profit performance for the full year (to April 30) in line with expectations," said chief executive Thierry Falque-Pierrotin.

Pierrotin said he 2009-10 would likely be another "challenging year."

Kesa shares, which had fallen nearly 20 percent this month, were up 2.6 percent at 110.25 pence at 0720 GMT

Prior to Thursday's update analysts were forecasting an underlying pretax profit of 66.2 million pounds ($100 million), according to Reuters' Estimates, down from 128.5 million pounds in the previous year.

Darty's like-for-like sales fell 5.8 percent with gross margins stable, while Comet's like-for-like sales fell 7.3 percent with its rate of gross margin decline significantly easing during the period.

At Kesa's other businesses division, which comprises BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland, Darty Turkey and Menaje Del Hogar in Spain, like-for-like sales were down 12.4 percent.

Kesa said Menaje Del Hogar saw "another significant fall" in revenue, reflecting extremely difficult market conditions in Spain and would post higher than anticipated full-year retail losses of 26 million euros.

It said restructuring plans to reduce losses were in progress, including the closure of one warehouse and distribution centre, streamlining head office functions, store closures and staff reductions.

These actions, which will necessitate a 10 million euro (8.9 million pounds) exceptional charge, will generate annual cost savings of about 11 million pounds, said Kesa.

(Editing by Rhys Jones and Dan Lalor)

($1 = 0.6592 pound)

($1 = 0.7377 euro)

Article Published: 14/05/2009