Kesa profits boost but Comet has rocky trail

Europe-wide retailer Kesa reported profits of 69.6m in the year to April 30, up from losses of 81.8m after improving profits at its Darty business in France and overhauling underperforming operations.

But its UK arm Comet suffered a 1.2 per cent drop in like-for-like sales after a difficult second half as competition intensified from rivals such as DSG International and new entrant Best Buy.

Kesa joined other retailers in cautioning over the outlook for consumer markets.

It said it would stick to its strategy plan announced last December to bolster profits and focus more on web sales – a tactic that helped annual online revenues leap by 8.9 per cent in the Comet business.

Kesa chief executive Thierry Falque-Pierrotin said the group would remain competitive with rivals despite Tuesday's VAT hike.

"We will whatever happens follow the market trend in terms of pricing, but we also have to keep in mind that in electrical retailing we have substantial deflation," he said.

The group is braced for similar tax increases across its European markets as other countries follow suit with austerity measures.

"We are really planning for challenging markets ahead," said Mr Falque-Pierrotin.

The World Cup has given Kesa a welcome boost so far in the current year, with recent television sales up by 30 per cent to 35 per cent across main markets.