DSG, Kesa profits to reveal impact

By James Davey

LONDON (Reuters) - European electricals goods retailers, DSG International and Kesa Electricals, will both reveal a slump in annual profit next week, showing the impact of recession on discretionary spending.

DSG, Europe's no 2 electricals retailer, is forecast to report a 79 percent fall in full-year profit Thursday, while Kesa, Europe's no 3, is expected to report a 46 percent fall on Wednesday, reflecting reduced demand for products such as washing machines, fridges and computers as cash-strapped European consumers rein-in spending.

DSG, which runs Currys and PC World stores in Britain, Elkjop in the Nordic region and UniEuro in Italy, is expected to report profit before tax and one-off items of 43.1 million pounds for the year to May 2, according to a Reuters Estimates consensus of analyst forecasts, down from 205.3 million pounds the previous year.

The group said in April its underlying profit would be "no less" than 42 million pounds. DSG also forecast losses from businesses to be closed and charges before tax of 195 million to 215 million pounds.

The retailer's April cash call raised 311 million pounds to strengthen its finances, accelerate its store revamp plans and beef-up its advertising.

"We expect DSG to report that UK like-for-like sales growth has improved slightly in May and June," said analysts at JP Morgan in a research note.

KESA PROFITS HALVE

For Kesa, analysts are forecasting a consensus underlying pretax profit of about 69 million pounds for the year to April 30, according to Reuters Estimates, down from 128.5 million pounds in the previous year.