News Column

Darty's Annual Profit Boosted By Market Share Gains

June 19, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Electrical products retailer Darty PLC Thursday posted a significantly higher profit for its last financial year, as the group shed its loss-making businesses and revenues were boosted by gains in market share.

Darty posted a pretax profit of EUR25.3 million for the year ended April 30, up from only EUR4.0 million a year earlier, which it said was driven by market share gains, lower exceptional costs and revenues increasing to EUR3.58 billion from EUR3.56 billion the prior year. Revenues were up 1.7% on a like-for-like basis.

"We have seen overall market share gains, delivered positive like-for-like sales growth and improved our profit performance for the first time in three years," said Chief Executive RÉgis Schultz in a statement.

The company said it expects market conditions to remain challenging in the year ahead, but said it is well placed to deliver growth.

"Our aim over the medium term is to build our market share in France and increase retail profitability," said Schultz.

The company maintained its total dividend for the year just ended at 3.5 cents per share.

In a statement last month, Darty said its overall group gross profit margin was flat in the final quarter of its financial year, hit by promotional discounting, while revenues and like-for-like sales in its core French business were flat with a decline in gross margin. It said sales were hit by significant sales decline in its Czech Republic and Slovakia businesses, as well as weakness in Belgium and the Netherlands.

Darty said Thursday that its business has improved, having eliminated losses in its non-core markets with the managed closure of Spain and the sale of its Turkish business.

During the year, the group's French subsidiary, Etablissements Darty et Fils, known as Darty France, acquired French deals website from M6 Group for EUR2 million cash. The company said its existing service infrastructure will be used to offer customers additional services on a pay-as-you-go basis. It said that, together with its superior buying terms and supply chain, is expected to create a profitable channel by year two of ownership.

It also sold its Turkish operations to Turkey-based specialist technology retailer Bimeks, the same group that agreed to buy the ElectroWorld chain in Turkey from Dixons Retail PLC for GBP2 million in cash.

"I am encouraged by the early results of our initiatives for future growth - the launch of our franchise business, building on the acquisition of and expanding our successful kitchen offer," said Schultz.

Darty shares were trading 4.8% higher early Thursday at 92.25 pence.

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Source: Alliance News

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