Electricals giant announces return to profit with £69.6m

The Europe-wide retailer reported pre-tax profits of 69.6 million in the year to 30 April, against losses of 81.8m a year earlier after improving profits at its Darty business in France and overhauling underperforming operations.

But Comet suffered a 1.4 per cent drop in like-for-like sales after a difficult second half as competition intensified from rivals such as Currys and PC World 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 the impact on prices expected from next year's VAT hike.

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

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

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.

Kesa also outlined plans to roll out a major refurbishment programme and new merchandising ideas. The group will revamp 40 Comet stores this year after successful trials of its new format, with the introduction of laptop and digital camera tables for another 30 outlets.

It is also pushing further cost cutting actions in the UK, following a year in which it merged two regions and closed a distribution centre.

Kesa said Comet outperformed a wider depressed market, which it estimated fell by 2 per cent. The chain had a strong year for large white goods sales although same-store sales slipped from a 2 per cent gain at the half-year stage.

Comet's like-for-like figures were partly hit by the bad UK weather at the start of the year.