UPDATE 2-Retailer Kesa sees difficult trading conditions
(Adds management conference call, analysts' comment)
LONDON, March 19 (Reuters) - Electrical goods retailer Kesa (KESA.L), owner of French group Darty, reported a rise in group profit in line with expectations for the last financial year and said it expected trading conditions in 2008 to be difficult.
Chief Executive Jean-Noel Labroue also confirmed Kesa plans to carry out a share buyback, but said it was too soon to give details. Finance Director Simon Herrick said any buyback -- which analysts say could be as much as 200 million pounds ($402.8 million) -- would take place after June.
Kesa shares were down 2 percent at 0943 GMT, underperforming a 1.4 percent fall in the DJ Stoxx index of European retailers .SXRP.
Kesa's share price has slipped more than 10 percent in the past month on fears of a fall in consumer spending.
Kaupthing analysts said they expected the buyback could be as high as 200 million pounds, but is more likely to be around 150 million pounds.
"We expect at least half to be used to pay down debt and create a fund for opportunistic bolt-ons in regions like Spain and Central Europe," the brokerage said in a note.
Labroue said consumers were starting to feel the impact of the credit crisis, with sales of large white goods slowing, particularly in Britain where it owns the Comet chain.
In France, where Kesa owns Darty stores, Labroue said there was a "disconnection" between national indicators of consumer confidence at 20-year lows and what was happening in stores.
Darty, with around 200 stores across France, will account for 70 percent of group profit after the finalisation of the sale of its BUT unit at the end of March.
CONFIDENCE DECLINES
"As consumer confidence declines, we are anticipating difficult trading conditions ahead. We will be more focused than ever on margin optimisation and cost control," Labroue said in a statement.
But Labroue added that he expected "the negative cycle will not last for long".
The comments were echoed by Next (NXT.L) Chief Executive Simon Wolfson also on Wednesday who said the outlook for this financial year was "tough but not dire". [ID:nL19481906] Continued...
