* H1 pretax profit 25 million eur vs forecast 22-24 million
* Rev 2.78 bln eur, up 4.1 percent
* H1 dividend 2.25 cents, up 15 percent
* Sees "increasingly uncertain market environment"
* Shares flat
(Adds detail, chairman, analyst comment, shares)
By James Davey
LONDON, Dec 8 (Reuters) - Kesa, Europe's No. 3 electricals retailer, said its relationship with shareholder Knight Vinke was "normal," following market speculation that the activist investor might try to break the group up.
"We have had a normal relationship with Knight Vinke," Kesa Chairman David Newlands told reporters on Wednesday, as the group posted a 52 percent rise in first-half profit.
He declined to comment on speculation that Knight Vinke, which has previously pressed for change at HSBC and Shell, may push for initiatives such as the sale of Kesa's Comet business in Britain.
However, he said: "We've set out our strategy for Comet quite clearly at the final set of results" (in June)."
This involves refitting and resizing stores, increasing sales over the Internet, raising the proportion of accessory and small domestic appliance sales and improving customer service.
Kesa shares have jumped by about 47 percent since late June when Knight Vinke's first disclosure of an interest in the retailer prompted speculation of a private equity break-up bid.
Knight Vinke has direct and indirect ownership of 10.02 percent of Kesa, making it the second-largest shareholder. It has not commented on its intentions.
Analysts at Altium Securities reckon Kesa's French market leading business Darty is worth around 140 pence per share, Comet about 30 pence per share and the remainder of the group about 35 pence per share.
"We think the best way to realise shareholder value is to break the group up," they said.
Shares in Kesa, which has also been linked with a possible bid from U.S. electricals No. 1 Best Buy, were up 0.1 percent at 172 pence at 1207 GMT, valuing the business at around 902 million pounds ($1.4 billion) after Chief Executive Thierry Falque-Pierrotin forecast "a competitive peak trading period" and highlighted "an increasingly uncertain market environment."
On Tuesday a survey said British retail sales growth slowed in November, as consumers were reluctant to splash out on expensive items at a time of public spending cuts and higher taxes.
Falque-Pierrotin echoed comments from Dixons Retail, Europe's No. 2 electricals retailer, which last month said it hoped Christmas demand for iPads, motion-sensitive gaming systems and 3D TVs would offset the impact of government austerity measures across Europe.
Kesa made an underlying pretax profit of 25 million euros for the six months to Oct. 31, driven by a 16.3 percent rise in Darty's profit to 59.8 million euros and loss elimination in the firm's new businesses.
That compares with analysts' forecasts of 22-25 million euros and the 16.4 million made in the same period last year.
Analysts were, however, disappointed with a trebling of first-half losses at Comet to 6.4 million euros and a 10 percent fall in second-quarter like-for-like sales, attributed to the soccer World Cup pulling forward TV sales into the first quarter and the cost of store refits and a rebranding exercise.
Group revenue increased 4.1 percent to 2.78 billion euros, with sales at stores open over a year up 0.1 percent.
The company, which ended the half with net cash of 109.5 million euros, is paying an interim dividend of 2.25 cents, up 15 percent.
Separately on Wednesday, British computer games retailer Game Group said profit margins would fall by more than expected this financial year as it cut prices to retain market share. (Editing by Louise Heavens and Erica Billingham) ($1 = 0.7566 euro = 0.6371 pound)