Comet stars as Kesa improves profits

Electricals group Kesa delivered improved half-year operating profits today after benefiting from a strong performance by flagship UK chain Comet.

Kesa, which has more than 600 outlets in seven European countries, said Comet overcame fierce price competition to help group profits before exceptional items to improve by 3.6% to £54.7m (€80.4m) in the six months to July 31.

The former division of B&Q business Kingfisher said it gained share in all its electrical markets, although continental retailer BUT was a drag on profits.

Kesa described trading in August and the early part of September as variable but added there had been an improved trend since then as the company prepares for the all-important Christmas trading season.

In its outlook statement, Kesa pointed out its focus on cost control and efficiencies meant it was confident of a “satisfactory” second half.

At Comet, Kesa said turnover from the 250-strong portfolio rose by 7% to £637.7m (€937.9m) in the six month period – helping profits at the UK retailer to jump from £1m (€1.47m) last year to £5.9m (€8.6m) this time.

The company said changes to Comet’s mix of products, coupled with cost controls, had allowed the retailer to face off competition from “mass merchandisers”, particularly in the area of digital products.

Kesa said Comet saw strong sales demand for multi-media items, while flat-screen televisions, and digital radios also sold well.

At the bottom-line Kesa reported pre-tax profits of £42.8m (€62.9m), down from the £46.7m (€68.6m) seen last year after the results were boosted by £9.9m (€14.5m) of exceptional items.