Comet reports losses of £8.1m

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The Independent Online

Electrical goods chain Comet piled on the misery for the UK retail sector today after crashing to first-half losses of £8.1 million.

Comet, which made a £10.6 million profit last year - said like-for-like sales also plunged 11.6 per cent in the six months to October 31 as the group's owner, Kesa Electricals, reported "extremely difficult" conditions.

Comet joins rival DSG International in the red after the owner of Currys and PC World posted first-half losses of almost £30 million two weeks ago.

Kesa, which halved its interim dividend, warned: "The economic climate across Europe is very weak and we do not expect to see any improvement for the remainder of this financial year."

Comet, like all sellers of "big-ticket" white goods and furniture, has been hit by a plunging housing market and shattered consumer confidence.

The chain, which has 252 stores, said "very aggressive" market conditions had dented margins.

Losses would have been worse without cost-saving measures including 300 job cuts from stores and its head office and the relocation of a regional distribution centre to Harlow, Essex. The company has around 8,500 full-time equivalent staff in the UK.

Kesa, which trades as Darty overseas, said conditions in France gradually worsened over the period but saw market share gains despite a 3.8 per cent fall in like-for-like sales.

Retailing profits were down almost 8 per cent at £40.1 million - but in euro terms fell more than 20 per cent.

Overall profits across the group dropped to £13 million from £45.1 million last year after an £8.7 million loss from Spanish consumer electronics retailer Menaje del Hogar. Spain's economy is also in dire straits after being hit with its own property collapse.

Analysts rushed to slash their forecasts following the gloomy update.

Pali International's Nick Bubb described the figures as "awful".

Shares fell more than 10 per cent as Seymour Pierce's Freddie George added: "Following these figures we will be downgrading our 2008/9 pre-tax profit forecasts from £130 million provisionally to the £85 million level."