Appliances spluttering, PRG warns

Eric Watson's PRG Group has again warned that it could fail to break even in its UK PowerHouse appliance chain this year.

The electrical appliance chain, which last month dragged the investment company to a $13.1 million full-year loss, said yesterday that three months into the financial year, sales growth was less than budgeted.

"If those trading conditions in that market carry on throughout the year, it's obviously going to be difficult and we'd expect a moderate loss," said PRG's chief financial officer Paul Elliott.

"It's a difficult market. When it comes right we'll be very happy about that. But right now, it's difficult."

In February, PRG forecast the year to March 2007 as the year the chain would break even.

PowerHouse was bought out of receivership by PRG in 2003 for $47 million. It has invested $35 million more in "reconstruction costs". At the time, PRG said it expected PowerHouse to be profitable by 2005.

In its efforts to improve the chain's fortunes the group shut 60 stores last financial year, leaving it with 53.

On a more positive note, lingerie company Bendon was performing "strongly and consistently across all its markets", the company said.

The trading update was given as PRG - 81.3 per cent owned by Watson - said delays in the sale of its finance group were holding up the release of its audited full-year result.

Pacific Retail Finance, the country's third largest consumer finance firm, was sold to GE Money in January - reportedly for $145 million.

Yesterday, PRG said it had done everything it could to speed up the sale audit process and was now relying on third parties for its completion.

That meant publication of its audited full-year results, due in its annual report next month, would be pushed back.

Trading of PRG shares would be suspended from July 10 until that was complete. PRG shares were unchanged at $1.57 yesterday.