London (Reuters) - British Kesa Electricals retailer warned Wednesday that annual profits will be at the lower end of expectations of investors due to winter weather conditions and increased competition in key markets.
"Adjusted pre-tax profit (is) currently should be before last year and towards the lower end of market expectations," the group said in a trading update.
Market expectations are currently an annual profit of 98 million and EUR 119 million.
KESA said group sales on a like-for-like basis, the effect of the new floor, surface pickling sank by four per cent between November 1st and January 18, 2011.
The group, whose businesses include retail chains electric Comet in Britain and Darty in France, adverse weather conditions in major markets said had affected sales by approximately two per cent.
"In a context of increased competition, France Darty and other businesses delivered a robust performance, offset by a milder commerce Comet and companies developing," Chief Executive Thierry Falque-Pierrotin said in the statement.
"We remain confident in our strategy and commitment to our plans to implement the Darty concept in all our markets and we have implemented a number of additional measures to improve revenues and reduce costs," he added.
But the Comet would perform poorly this year, partly because of the recent UK Government VAT tax hike.
"Since the introduction of the increase in VAT on 4 January we have so far seen trends sales soften," said Kesa.
"In light of these factors, we expect now that the comet will deliver a loss of small detail for the year".
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