Darty reports jump in profit helped by turnaround plan

By Dominique Vidalon

PARIS, June 16 (Reuters) - Darty Plc (LSE: DRTA.L - news) , recently the target of a fierce takeover battle, reported a 24 percent rise in annual operating profit before exceptionals on Thursday helped by a turnaround plan.

Like larger rivals Metro (Other OTC: MTRAF - news) 's Media-Saturn and Dixons , London-listed Darty has also been battling weak consumer spending and competition from online retailers.

Europe's third-largest electrical goods retailer said its "retail profit", or operating result before taxes and exceptionals, rose to 93.1 million euros ($105 million) in the year to April 30 from 74.9 million.

Operating profit slipped to 53.8 million euros from 60.3 million hurt by 36.5 million euros in exceptional items stemming from asset write-offs, restructuring costs in France and costs tied to a new IT (Other OTC: ITGL - news) system in the Netherlands.

Darty, which has some 400 stores in Europe, has exited loss-making operations in Italy, Spain, Turkey and the Czech Republic to and focus on France, Belgium and the Netherlands.

In France, where it makes 70 percent of its sales, the rollout of a franchise business, acquisition of multimedia website Mistergoodeal and more stores offering kitchen equipment have helped improve performance and cash generation.

Darty said it had cut its net debt by 115 million euros and reported an improvement in cash flow of 150 million.

"These actions created the circumstances that led to the interest in Darty from third parties, culminating in the recommended offer from Fnac," said Darty Chairman Alan Parker.

Last month Darty's board recommended that its shareholders approve a 170 pence per share offer from French book and CD retailer Fnac, valuing it at about 900 million pounds ($1.28 billion).

Darty had also received a bid from French furniture retailer Conforama, owned by South Africa's Steinhoff, but it said it would go no higher than 160 pence.

The takeover battle helped double Darty's share price.

Having paid an interim dividend 0.875 cents per share, Darty (Euronext: DRTY.NX - news) said that given the terms and timing of the Fnac offer it would not recommend a final dividend.

Darty said it expected to complete Phase 2 competition clearance in France regarding Fnac's bid in July and for the offer to be declared unconditional on or before August 5.

($1 = 0.8865 euros)

($1 = 0.7059 pounds) (Reporting by Dominique Vidalon; editing by Jason Neely)