CAN KESA SUSTAIN ITS DRIVE FORWARD IN TOUGH MARKETS?

PHILIP DORGAN| ALTIUM
Comet was hit by the costs of store refits and a rebranding exercise, but it is difficult to see much in the way of margin improvement over the next 12 months. The Darty story remains strong. We maintain our ‘buy’ recommendation on the view that the shares are not expensive on fundamentals and have reasonable upside on an alternative scenario.

RAMONA TIPNIS| SHORE CAPITAL
The elimination of losses in Kesa's developing markets is continuing apace (as it is at Dixons). We retain forecasts for now and reiterate our ‘sell’ recommendation as performance across the group has been as expected. The UK accounts for over 25 per cent of sales but is a very small portion of profits and this needs to show a step change.

KEITH BOWMAN | HARGREAVES LANSDOWN
When balancing recent share price strength against still intense competition and accompanying cautious management comments, market consensus opinion currently denotes a ‘hold’. Half-year profits have exceeded forecasts, aided by a management focus to increase online sales. A previously announced strategy to emulate many of the initiatives being pursued by rival DSG has also played its part.