Tempus: Electrical fault

Two casualties of the high street consumer downturn spelt out their difficulties this morning as shoppers cut their spending on household items.

Kesa Electricals, the owner of the Comet retail chain, halved its dividend after posting a half-year loss of £102 million and delivering a bleak outlook for the second half.

The stock dipped by 10.75p to 91.25p — a fall of more than 10 per cent — in early trading amid fears over the outlook for the new year.

Meanwhile shares in Carpetright lost more than 15 per cent in morning trade after the retailer issued a profit warning and chopped its dividend by 80 per cent.

The flooring group, run by Lord Harris of Peckham, reported a 67 per cent fall in first-half profits to £8.4 million from £25.5 million last year and gave warning that full-year profits would fall well below current expectations of £32 million. Its shares fell 15.23 per cent, or 60p, to 334p on the news.

It cut the interim dividend from 22p to 4p.

Carpetright has already lowered profit expectations twice in the past two months, and its shares have lost more than half their value in the past year.

The company has been suffering from the property slowdown, along with other home furnishing and DIY retailers.

Kesa, which also owns Darty, the French electrical retailer, said that trading conditions in all its main markets, particularly the UK and Spain, were "extremely difficult", with Comet dipping into the red and suffering an 11.6 per cent fall in like-for-like sales.

It said that it expected the peak Christmas and new year period to be tough, adding: "We do not expect consumer confidence to improve in the rest of the financial year."

But, unlike some big retail names, Kesa was able to reassure investors over its financial position. It had strong cashflows and an unleveraged freehold property portfolio and had recently extended its revolving credit facility from 2010 to 2013.

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