Electricals retailer Darty, which sold the Comet chain for £2 in February, has pledged to eliminate losses at its non-core operations after falling into the red during the first half of the year.
The group, formerly called Kesa, agreed to sell its Italian business last month and today said it was turning its attention to other areas as it posted an adjusted pre-tax loss of €10.8 million (£8.7m) for the six months to 31 October, compared with a €12.1m profit a year earlier.
Chairman Alan Parker said: “We will strengthen our position in France, Belgium and the Netherlands and drive greater efficiency at reduced cost across the group.
“We will deliver a step change in performance, and eliminate the losses in our non-core markets of Italy, Spain, Czech Republic and Slovakia. We continue to keep Turkey under review.”
Total revenues at Darty’s core operations in France, where it has 231 stores, suffered a 3.9 per cent drop in revenues to €1.3bn and its retail profit slumped 44 per cent to €24.4m as margins came under pressure from competitive market conditions.
Parker added: “Current market conditions remain challenging and have been deteriorating in recent months, but we have taken short term actions and continue to plan prudently.
“Our plan will nevertheless deliver an improvement in earnings over the medium term and in the light of this the board has declared an interim dividend of 0.875 cents and, subject to full-year performance, intends to maintain the dividend for the full year.”
Seymour Pierce analyst Freddie George said: “We see the disposal of the Italian business announced in November as a major step in the right direction to creating longer-term shareholder value, but to become more positive on the shares, we need to see a stabilisation in the profitability of the core French operations.”
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