Financial Highlights

• Group revenue increased by 6.1% to £2,044.2 million (2006: £1,925.9 million), by 7.2% in constant currency¹ and by 3.9% on a like for like basis.
• Group retail profit² fell to £38.2 million (2006: £48.0 million). Underlying group retail profit³ grew by 13.8% to £55.9 million.
• Net capital expenditure and investment increased to £76.1 million from £57.0 million.
• Cash generated from operations was £66.2 million (2006: £56.4 million).
• Net debt on 31 July 2007 was £155.4 million, down from £240.9 million on 31 July 2006.
• Basic earnings per share of 4.5 pence (2006: 5.2 pence).
• First interim dividend increased by 7.7% to 3.5 pence per share.
• After the period end, the acquisition of Menaje Del Hogar in Spain was completed for €100 million plus approximately €35 million of net debt.

¹ Constant exchange rate of £1 = Euro 1.4777
² Retail profit is defined as total operating profit before the share of joint venture and associates’ interest and taxation, the Demerger Award Plan charge and valuation gains / losses on options to acquire minority interests. The comparative amounts have been restated to include the gains and losses on the disposal of property, plant and equipment.
³ Underlying retail profit is calculated as follows:

Jean-Noel Labroue, Chief Executive, commented:

"I am pleased that all our businesses delivered good revenue performances against the very strong comparatives of last year. Sales were helped by the continued high demand for new technologies, particularly flat screen televisions and laptops, and increased sales of white goods. As anticipated we saw an easing of the negative mix effect on margin.

"Although underlying retail profit improved, new developments across the group impacted our first half profitability but are central to our longer term success.

"Trading conditions for the second half of the year are uncertain, particularly in the UK. As always, our full year performance is reliant on our key peak trading period in the fourth quarter of the year and we will remain focused on cost control, cash and margin management and operational efficiencies.

"I am delighted that we have completed the acquisition of Menaje Del Hogar which provides us with a solid platform for entry into the Spanish market."

David Newlands, Chairman, commented:

"I am satisfied with these results which represent solid performances from all our businesses. Whilst we saw a decline in reported retail profit, I am pleased that underlying retail profit grew by 13.8 per cent.

"The strong cash generative nature of the group continues to allow us to invest for the future and has also enabled us again to increase the interim dividend, up 7.7 per cent to 3.5 pence per share."

ENDS

Enquiries

Press:

Kesa Electricals plc

Annabel Donaldson - +44 (0) 20 7269 1400

Guy Lavaud - +33 (0) 1 43 18 52 00

Finsbury

Alex Pettifer - +44 (0) 20 7251 3801

Euro RSCG

Benjamin Perret - +33 (0) 1 58 47 95 17

Analysts:

Kesa Electricals plc

Simon Herrick - +44 (0) 20 7269 1400

Simon Ward - +44 (0) 20 7269 1400

There will be a presentation today to analysts and institutions at 09.30am at The Conference Centre, Merrill Lynch, 2 King Edwards Street, London, EC1A 1HQ.

This announcement is available on the KESA Electricals website: www.kesaelectricals.com. A live webcast of the presentation to analysts and institutions will also be available on the site at 09.30am, and recorded for access later in the day.

As previously announced Kesa Electricals has changed its year end to 30 April. Summary unaudited financial information for the year ended 30 April 2007 is available on our website.

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward looking statements

KESA Electricals is a specialist electrical retailer. It employs more than 28,000 people and trades in ten countries and has an annual turnover of approximately £4.5 billion. KESA Electricals is a member of the FTSE 250. Its ordinary shares are listed with the UK Listing Authority and trade on the market for listed securities on the London Stock Exchange under the symbol KESA.L. It is also listed on the Premier Marche of the Paris Stock Exchange. For further information, please visit the company’s website, as above.

GROUP OVERVIEW

Results as reported in sterling

Results as reported in local currency

*Includes BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland and Darty Turkey.

Financial Highlights

Group revenue was £2,044.2 million, up 6.1 per cent on last year (7.2 per cent in constant currency) and up 3.9 per cent on a like for like basis.

Group retail profit was £38.2 million, down 20.4 per cent on last year. Underlying retail profit, before the impact of new developments and lease premiums, grew by 13.8 per cent to £55.9 million.

The net interest charge was £4.2 million (2006: £7.0 million). Profit before tax and after interest was £32.4 million compared to £39.3 million last year.

The effective tax rate including the share of joint venture and associates’ tax was 32.9 per cent, 34.9 per cent for the same period in 2006.

Cash generated from operations was £66.2 million, up from £56.4 million last year.

Net capital expenditure and investments increased to £76.1 million from £57.0 million.

In line with the seasonal profile, closing net debt was £155.4 million, up from £75.4 million at the end of last year but down from £240.9 million at 31 July 2006. Net assets have increased from £316.1 million at 31 July 2006 to £347.3 million at 31 July 2007.

Basic and diluted earnings per share were 4.5 pence (5.2 pence in 2006).

The Board has declared a first interim dividend of 3.5 pence, an increase of 7.7 per cent. The ex dividend date will be 7 November 2007, the record date 9 November 2007 and payment date 7 December 2007.

Trading Highlights

Against tough comparatives market conditions in Europe were slightly positive. Overall group revenue was driven by the high demand for new technologies and increased sales of white goods. As anticipated, the negative mix effect on margin eased.

In France, revenue growth at Darty was up 7.2 per cent in local currency, up 4.1 per cent on a like for like basis. Developments to enhance the customer service proposition, including Darty Box, the Darty Card and a new fitted kitchen offer, impacted profitability. Before taking into account the Darty Box losses, retail profit remained stable.

Comet’s revenue increased by 3.3 per cent, up 0.9 per cent on a like for like basis. Against a strong retail profit performance in the first half of 2006 (£4.8 million), which benefited from a one-off £3.5 million net lease premium, Comet reported a small loss of £1.0 million. During the period Comet accelerated its mezzanine store opening programme.

BUT successfully built on the initiatives put in place last year to improve its sales and profitability. Total store revenue grew by 6.4 per cent in local currency and retail profit grew by 14.9 per cent.

Total revenue at the other businesses, BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland and Darty Turkey, grew by 22.8 per cent in local currency, up 11.1 per cent on a like for like basis. Retail profit was €5.9 million for the established businesses. Start up losses were €12.3 million for our developments in Italy, Switzerland and Turkey.

In September, Kesa completed its acquisition of Menaje Del Hogar in Spain for €100 million in cash together with the assumption of approximately €35 million net debt. The business provides the group with a solid platform for entry into the fifth largest electricals market in Europe.

Outlook

The economic climate in Europe for the second half of the year is uncertain, particularly in the UK. We anticipate that sales will continue to be driven by the strong new technology product cycle and sales of white goods should remain positive in Continental Europe.

The second half of the year is always the key period for the group and we will stay focussed on cost control, operational efficiencies and cash and margin management.

The group’s plans will progress as planned with emphasis on Darty’s customer proposition, Comet’s property portfolio and services development, the new market start-up operations and the acquisition in Spain. These developments will impact on profitability in the short-term but are central to securing the future growth of the business.

DARTY

Darty’s total revenue increased by 7.2 per cent in local currency compared to the same period last year, up 4.1 per cent on a like for like basis. Sales continued to be driven by the high demand for new technologies and increased sales of white goods. As anticipated, the negative mix effect on margin eased.

During the period Darty continued to invest in Darty Box and its store portfolio and launched a new fitted kitchen range. Consequently, retail profit was €49.1 million, a decrease of 17.5 per cent on the previous year. Before taking into account losses on Darty Box of €10.9 million, €0.9 million in 2006, retail profit remained stable.

Darty continued to enhance its customer proposition. The ‘Darty Card’, enabling us to keep track of customers’ transactions and after sales service requirements, was launched in March and over 1.8 million cards have already been issued.

Darty Box, introduced towards the end of last year, showed a very encouraging launch period but sales slowed during April and May. The single play proposition was launched in June. Independent research has confirmed that customers highly rate both the technical quality of Darty Box and the associated after-sales support. At the end of July subscriber numbers totalled 66,000. It is too early to assess seasonal trends but we anticipate increased demand during the second half of the year. An additional service, ‘Video on Demand’, was introduced in August and a new national marketing campaign commenced to coincide with the back to school period.

In June Darty launched its first fitted kitchen range from its store in rue de Rivoli in central Paris. Early sales numbers are encouraging and we will extend the pilot to two additional stores outside Paris before the end of October.

The store modernisation programme progressed on schedule. In the first half, Darty completed three new store openings and six refurbishments/extensions. For the second half, two new store openings, two relocations and three refurbishments / extensions are planned.

Sales generated from the Darty web site continued to deliver strong growth, with an uplift of 64.8 per cent. The ‘click and collect’ service option for customers was successfully launched in June.

COMET

Comet delivered total revenue of £706.0 million, up 3.3 per cent on the same period last year and up 0.9 per cent on a like for like basis. Sales were helped by the continued strong demand for flat screen televisions and laptops, while sales of white goods were flat.

Against a particularly strong performance for the same period last year, which also benefited from a £3.5 million net lease premium, Comet reported a small retail loss of £1.0 million.

Comet’s execution of its re-positioning programme progressed further. 62,000 e-learning courses which help in-store and call centre colleagues develop their product knowledge and selling have been completed. ‘Comet on Call’, providing expert PC and laptop support for the home and small business customers, was launched in March and is now available from all stores nationwide.

The success of the stores with trading mezzanine floors encouraged Comet to accelerate its investment in this format and seven stores were converted in the first half. In addition, two new stores were opened while one store was closed. The store in Solihull was refurbished with a ‘Living Room’ lay-out for visual and audio ranges. In the second half of the year, three stores will be opened and five stores will be converted to the mezzanine format.

‘Click and collect’ helped sales generated from the web site grow by 23 per cent.

BUT

BUT grew its total revenue by 5.2 per cent in local currency, with its in-house wholesale business growing by 0.3 per cent and store turnover growing by 6.4 per cent, (up 5.7 per cent on a like for like basis). Retail profit grew by 14.9 per cent to €24.7 million.

BUT is successfully progressing the initiatives put in place last year to restore its sales and profit growth. Sales of furniture and home furnishings were particularly strong in a market which is back to growth.

The small to mid sized stores relayed to date continue to deliver good sales growth. A further nine stores are currently being relayed.

Last year, BUT launched a new kitchen offer to provide customers with both kitchen furniture and associated electrical appliances. The ranges and related services were re-designed to meet customer demand and continue to show encouraging results.

During the period, BUT acquired eight franchisee stores and will acquire a further four stores in the second half. 

OTHER BUSINESSES

Total revenue for BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland and Darty Turkey grew by 22.8 per cent in local currency, up 11.1 per cent on a like for like basis, helped by particularly strong sales performances at our established businesses BCC, Vanden Borre and Datart.

Retail profit for these three businesses rose to €5.9 million from €0.4 million last year. Start up losses for Darty Italy, Darty Switzerland and Darty Turkey totalled €12.3 million, €9.6 million in 2006.

The established businesses continued to benefit from consolidating markets and significantly increased market share. In total four new stores were opened, six were refurbished/extended and one store was closed. During the second half four new stores will open and two relocations and four refurbishments/extensions will be completed.

In Italy, two new stores opened in Milan and there are now 11 stores in operation. During the second half of the year, a further three stores will open, also in the Milan region.

The Darty stores in Switzerland continue to receive positive customer feedback and achieve a high conversion rate and average selling price. There are now four stores in total and one more will open in Geneva in the third quarter of the year.

In Turkey we now have three stores open in Istanbul with two further stores planned for the third quarter. Trading has been very encouraging.

The acquisition of Menaje Del Hogar (MH) in Spain was completed on 17 September 2007. Spain is the fifth largest market in Europe with further growth potential and MH provides us with a solid platform for entry into this market.