Broker snap: KESA's Darty under pressure, says Investec

LONDON (ShareCast) - Investec (Frankfurt: A0J32R - news) says that the third quarter performance from Darty, KESA Electricals (Other OTC: KESAF.PK - news) ' key profit earner, was weaker than expected and has put pressure on the broker's forecasts, which are now placed under review. The group reported a like-for-like (LFL) sales decline of 1.3% for the continuing businesses, which Investec says is "quite modest". However, the surprising strength of 'Other established' and 'Developing' businesses masks a poor performance from Darty, the broker said. Investec also highlights that the Comet disposal, expected to be completed by February 3rd, could cost KESA an additional £10-15m after the division's debt exceeded the agreed threshold with its purchasers. The broker maintained its sell rating on the retailer but put its 65p target under review. "With the core French market under pressure from a weakening economic backdrop and much of the rest of the empire's aggregate operating losses only serving to dilute the sum of the parts, we remain negative on the stock, notwithstanding the potentially imminent departure of the loss-making Comet division," Investec said. KESA's shares were down 5.97% at 73.25p in mid-morning trade. BC