Kesa has reported an £81.8m full year loss and said that it does not expect a recovery this year.
Kesa chief executive Thierry Falque-Pierrotin said that the UK and Spanish markets had been particularly impacted by the recession and the downturn in spending on electricals.
Current trading has been challenging in recent weeks said Falque-Pierrotin.
In the 12 months to April 30, Kesa said pre-tax losses were £81.8m versus a profit of £128.8m the year before. Sales dropped 6.2 per cent on a like-for-like basis, but total sales grew 9.8 per cent to £4.95bn. At constant exchange rates the European group reported group sales declined 1.2 per cent.
Profits were also impacted by £150.9m of exceptional costs including the writing down of its Spanish business Menaje del Hogar.
Retail profit was £77m, down from £141.3m, in line with expectations and largely due to the profit fall-off at UK operation Comet and losses at Menaje del Hogar. The results are flattered by the strengthened Euro which increased retail profit by £14.4m.
Total sales at Comet fell 4.7 per cent to £1.7bn. Like-for-likes dropped 7.7 per cent. Profits dropped 76.5 per cent to £10.1m.
Falque-Pierrotin added that the retail group’s Darty business in France and its divisions in Belgium, the Netherlands and Czech Republic improved gross margins and maintained their market positions.
Kesa added that its Italian and Turkish operations were making progress.
He said: “Actions have been taken on costs across the group, and particularly in the UK, to mitigate the impact of market conditions.”
The group will continue to manage costs, which has included cutting 100 staff in Comet stores and 200 at its head office. It will also lower its capital expenditure.
Pali analyst Nick Bubb said: “Today’s finals from Kesa have brought a triple-whammy of disappointment, in the form of a disappointingly big dividend cut, a disappointing miss on underlying profits for the year ending April and a disappointing lack of anything new on company strategy.”
Rival DSGi is to report its prelims tomorrow.