Survival is the priority for us, says Kesa chairman
Survival is our top priority, says chairman Kesa
Comet owner Kesa’s chairman laid out the harsh realities of life as a retailer yesterday.
“Our main task is to survive,” said David Newlands after the publication of annual results that were as bad as the city had expected.
Kesa cut its overall dividend by 65 percent after an “extremely difficult year” in which the group crashed at a loss.
Struggling: Kesa owns Comet, which recently saw its shares fall 74%
Europe’s third largest retailer of electrical goods has been hit hard by the downturn in the consumer market. It said conditions would not improve any time soon and it had projected a 6 percent decline in underlying sales for 2009.
Although it has no debt, it has been burning up its cash reserves at an alarming rate – they fell from £46.5m to £7.5m in the space of 12 months.
Newlands said: ‘In circumstances that remained extremely difficult throughout the year, I am very pleased that the group has once again demonstrated the strength of its cash-generating business model.’
The company cut costs by laying off 300 of Comet’s 10,000 employees during the year. The cost of redundancies and restructuring meant that Kesa posted a loss of £81.8 million compared to a profit of £127.9 million a year earlier.
Shares rose 6¾p to 109½p despite the dividend cut from 14.4p to 5p.
Conditions have been particularly difficult for the Spanish company and it is in talks to sell its Swiss operations for £11m.
Nick Bubb, retail analyst at Pali International, said: “Kesa has delivered a triple disappointment, in the form of a disappointingly large dividend cut, a disappointing miss in underlying earnings for the year ending April and a disappointing lack of anything new in the market. . business strategy.’