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Comet is Kesa’s “laggard” as overall profits grow

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Retail profits at international electricals retailing group Kesa increased by 19.6 per cent to €32.4 million (£27.3 million) in its first half, according to results published today.

Its French retail business Darty was the star of the six months to October 31st with its profits rising 13.3 per cent to €59.8 million, whilst UK based Comet was the only loss making area of the group as profits fell €6.4 million compared to €1.8 million during the same period in 2009.

Group revenues rose 4.1 per cent in H1, profit before tax grew 78.9 per cent and online sales increased 23 per cent as Comet launched a new e-retail platform.

Investec Securities retail analysts David Jeary and Katharine Wynne have said that “Comet remains a laggard” in the Kesa Group.

Kesa announced a rebranding of Comet in September which included a new logo, strap-line and in-store approach but Jeary and Wynne believe it is yet to have an effect.

“It is clear from the figures below that Darty remains the jewel in the crown. While other established businesses delivered a profit, both Comet and developing businesses continue to act as a value drag,” they said in a report today.

“It is too early to discern any improvement at Comet from its ongoing rebrand exercise.”

Comet has reduced its store portfolio by two properties in the last year and has managed to increase its revenues by 1.5 per cent to €864.1 million despite falling profits.

David Newlands, Chairman of Kesa, commented: “The group continues to trade robustly in challenging market conditions and I am pleased that our earnings growth and continued cash generation have enabled us to declare an increase in the interim dividend of 15 per cent to 2.25 cents per share.”

Published on Wednesday 08 December by Editorial Assistant

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