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/FIRST AND FINAL ADD -- NY016 -- BURTON GROUP EARNINGS/

        /FIRST AND FINAL ADD -- NY016 -- BURTON GROUP EARNINGS/
                          THE BURTON GROUP PLC
                              1991 Results
                        (In millions of pounds)
                                    1991      1990(A)     Percent
                                             (Restated)   Change
    Group turnover:
     Retailing                     1,661.1    1,723.6      (3.6)
     Property                           --       65.1        --
     Total                         1,661.1    1,788.7      (7.1)
    Profit before exceptional costs   11.2      146.1
    Exceptional costs                (24.6)     (13.0)
    (Loss)/profit before tax and
     extraordinary items             (13.4)     133.1
    (Loss)/earnings per share         (2.0p)     15.0p
    Dividend per share                 2.7p       5.2p
    (A) -- Restated to reflect the impact of certain changes in accounting bases and the presentation of financial information and, where appropriate, the effect of the rights issue.
                          Background
    The Burton Group preliminary results for the 52 weeks ended Aug. 31, 1991 reflect a comprehensive review of accounting policies and of the presentation of financial information.  This was carried out in the light of the introduction of the Companies Act 1989 and likely developments in accounting practice.
                     Retailing Performance
    The current recession, by common consent, is the toughest faced by the retail industry for 20 years.  Against this background, the group's total retail sales were 4 percent lower than the previous year.  Total sales in Debenhams were level with the previous year.  Fashion Multiples' sales fell by 6 percent.  New space contributed 5 percent to sales (2 percent from the full year effect of 1990 space and 3 percent from 1991 space) while same space sales fell by 9 percent.
    Profitability was put under great pressure by higher rents, increased wages and the increased cost of the uniform business rate. Margins were further depressed by the increase in value added tax to 17.5 percent.
    Retail trading profit was 46.2 million pounds compared with 171.4 million pounds in 1989/90.
    Profit before exceptional costs was 11.2 million pounds (1990: 146.1 million pounds), in line with the forecast made at the time of the rights issue.  The profit is after an additional charge of 4.0 million pounds associated with changes made to the basis of providing depreciation on certain of the group's fixed assets.
    Exceptional costs of 24.6 million pounds relate to rationalization and reorganization.  These costs are in line with those forecast at the time of the rights issue.
                        Extraordinary Items
    The extraordinary items, at 152.0 million pounds net of tax relief, are in line with those forecast at the time of the rights issue.
    -- Property Development:  The group retains the objective of an orderly withdrawal from property development.  In recognition of a further deterioration in the property market since August 1990, the property portfolio has been written down by a further 155 million pounds this year.  The group has taken the decision that the major shopping centers and major commercial developments will be held until the market has improved.  In America, the group's strategy of selling properties at the earliest opportunity is fully justified by current market conditions.
    -- Financial Services Division:  Following the disposal of the financial services division to GE Capital last year, a further provision of 13.0 million pounds has been set up in respect of recourse debt arrangements.
                        Capital Expenditure
    Capital expenditure at 97.0 million pounds represents a 30 percent reduction on 1990.  745,000 NSF of new space have been added of which 555,000 NSF are in Debenhams.
                           Balance Sheet
    On June 28, 1991, the group announced a one-for-one rights issue to raise approximately 161 million pounds.  The proceeds of this issue were received in the middle of August 1991.
    Considerable success was achieved in the management of working capital during the year and this contributed to the overall reduction in net debt of 155 million pounds.  The group's net debt at Aug. 31, 1991 was 308 million pounds after consolidating High Street Property Investments Limited, reflecting on the balance sheet certain sale and leaseback obligations entered into in 1988 and reclassifying the redeemable preference shares of a subsidiary as debt.  Gearing was 43 percent, a marked reduction on the comparable level of 62 percent at the end of the previous year.
    The effect of the above items on debt and gearing is as follows:
                                                  1991            1990
                                            Debt       Gearing   Gearing
                                        (In millions   Percent   Percent
                                         of pounds)
    Net debt (before changes outlined above)  166         23       43
    High Street Property Investments           60          8        8
    Sale and leaseback obligations             76         11       10
    Redeemable preference shares                6          1        1
    Reported net debt                         308         43       62
                     (Loss) Earnings Per Share
    The group is reporting a loss per share of 2.0p (1990 (restated) earnings per share: 15.0p).
                           Dividends
    The board is recommending a final dividend of 1.0p per share to be paid on Feb. 14, 1992, to shareholders on the company's register on Jan. 10, 1992.  This, together with the restated interim dividend of 1.7p, makes a total dividend for the year of 2.7p (1990 restated: 5.2p).
    The board believes that it is right to base dividend policy upon a consideration of the group's longer term prospects and potential, rather than on the depressed results for the year ended Aug. 31, 1991.
    The recommended final dividend is in line with the forecast given at the time of the rights issue.
                         Harvey Nichols
    On Aug. 15, 1991, the group entered into an unconditional agreement to dispose of its interest in Harvey Nichols.  This sale was completed and the proceeds of approximately 60 million pounds received on Oct. 3, 1991.  These proceeds will reduce net debt in 1991/92.
                        Current Trading
    Sales in the last six weeks have shown a significant improvement with total sales marginally above last year on the back of improved performance in Debenhams and Womenswear Multiples, with Menswear improving rather more slowly.  This is in contrast to weak sales in September.
    The timing and strength of the recovery in consumer spending and confidence remains uncertain and it is too early to say whether a sustainable positive trend has been established.
    The group will follow its normal practice of commenting on trading at the AGM in January when the results of the Christmas period will be known.
    The success of the space rationalization program will reinforce performance.  The first phase of the project is 75 percent complete and sales in the affected branches are ahead of target.
    The group ended 1990/91 with substantial reductions in both total stocks (18 percent) and terminal stocks (27 percent).  Against this background of substantially lower stocks at the start of this autumn, the group is taking the opportunity to rebuild stock levels selectively ahead of Christmas trading.
                          THE BURTON GROUP PLC
                  Consolidated Profit and Loss Account
               for the Financial Year ended Aug. 31, 1991
                        (In millions of pounds)
                                              1991        1990
                                                       (Restated)
    Turnover                                1,661.1     1,788.7
    Cost of sales                          (1,509.9)   (1,516.2)
    Gross profit                              151.2       272.5
    Distribution costs                        (36.8)      (38.1)
    Administration expenses                   (68.2)      (74.3)
    Income from financial services division      --        34.7
    Trading profit before exceptional costs    46.2       194.8
    Exceptional costs (C)                     (24.6)      (13.0)
    Trading profit after exceptional costs     21.6       181.8
    Other Income (D)                           (2.2)        2.3
    Interest and similar charges (E)          (32.8)      (51.0)
    (Loss)/profit on ordinary activities
     before taxation                          (13.4)      133.1
    Taxation(F)                                  --       (36.8)
    (Loss)/profit on ordinary activities
     after taxation                           (13.4)       96.3
    Extraordinary items (G)                  (152.0)      (83.9)
    (Loss)/profit for the financial year     (165.4)       12.4
    Dividends                                 (22.4)      (33.6)
    Transfer from retained earnings          (187.8)      (21.2)
    (Loss)/earnings per ordinary share
      After exceptional costs                  (2.0p)      15.0p
      Before exceptional costs                  1.7p       16.3p
                Consolidated Balanced Sheet - Aug. 31, 1991
                          (In millions of pounds)
                                              1991        1990
                                                       (Restated)
    Fixed assets
     Tangible assets                        1,049.6     1,108.5
    Current assets
     Stocks                                   231.7       293.8
     Debtors                                  155.1        95.1
     Assets held for sale                      55.4       132.6
     Cash at bank and in hand                 116.9       118.8
    Total                                     559.1       640.3
    Creditors (due within one year)           664.2       647.6
    Net current liabilities                  (105.1)       (7.3)
    Total assets less current liabilities     944.5     1,101.2
    Creditors (due after one year)            186.9       331.5
    Provisions for liabilities and charges     43.5        28.4
    Total                                     714.1       741.3
    Capital and Reserves
     Called up share capital                  335.1       279.3
     Share premium account                    113.6         8.8
     Revaluation reserve                       80.4        80.4
     Retained earnings                        185.0       372.8
     Total                                    714.1       741.3
    Gearing (as a percent)                     43.1        62.5
    Gearings, excluding High Street
     Property Investments Limited
     and property lease obligations
     (as a percent)                            24.3        44.1
    (A) -- Changes in Accounting Bases and the Presentation of Financial Information
    In the light of the introduction of the Companies Act 1989 and likely developments in accounting practice, a comprehensive review of accounting policies and the presentation of financial information has been undertaken.  As a result, certain changes have been made to the bases of accounting for fixed assets and the presentation of financial information adopted in previous years as follows:
    (i)  The results, assets and liabilities of High Street Property Investments Limited (HSPI) have been consolidated.  HSPI was formerly treated as an associated undertaking;
    (ii)  Certain properties disposed of in 1988 under the terms of sale and leaseback transactions with a capital value of 75 million pounds have been reflected in the group's fixed assets and the related lease obligation included in creditors.  These transactions were previously treated as operating leases in accordance with the provisions of Statement of Standard Accounting Practice No. 21;
    (iii)  The redeemable preference shares owned by banks in Debenhams (Aruba) NV, one of group's subsidiary undertakings, have been treated as a component of borrowings rather than as a minority interest;
    (iv)  Certain items of income and expenditure and certain balance sheet figures have been reclassified; and
    (v)  Certain changes have been made to the economic lives applied to and the basis of providing depreciation on certain of the group's fixed assets.  These changes have increased the charge to the profit and loss account by 4.0 million pounds in the current year.
    The comparative figures for 1990 have been restated to reflect items (i) to (iv) above.  The profit for the financial year ended Sept. 1, 1990 previously reported, of 12.4 million pounds, is unchanged and the net assets at that date previously reported, of 737.5 million pounds, have been restated at 741.3 million pounds.
    (B) -- Retail trading profit (in millions of pounds):
                          1991      1990       Percent
                                               Change
    Debenhams             29.1      56.0       (48.0)
    Multiples             17.1     115.4       (85.2)
    Trading profit        46.2     171.4       (73.0)
    In addition to the changes in accounting bases and presentation described in Note A, an adjustment has been made to the basis of arriving at intra-divisional profit.  The 1990 figures shown above have been restated to provide a proper comparison.
    (C) -- Exceptional Costs (in millions of pounds):
                                                          1991    1990
    Rationalization and reorganization costs             (24.6)   (8.0)
    Loss arising from the Lowndes Queensway receivership   --     (5.0)
    Total                                                (24.6)  (13.0)
    (D) -- Other Income
    (Loss)/profit on disposal of trading properties       (2.2)    2.0
    Surplus on redemption of loan stocks                    --     0.3
    Total                                                 (2.2)    2.3
    (E) -- Interest and Similar Charges
           (in millions of pounds)
    Interest receivable                                   11.5    19.0
    Payable on bank loans and overdrafts:
      Repayable within five years                        (31.3)  (57.0)
      Repayable after five years                          (6.1)   (6.7)
    Payable on debenture loans:
      Repayable within five years                         (9.6)   (7.8)
      Repayable after five years                          (3.0)   (8.4)
    Provision for supplementary interest on
     4-3/4 percent convertible bonds 2001                 (7.8)   (7.4)
    Payable on finance lease obligations                  (0.1)   (0.2)
    Rentals payable on property lease obligations         (7.4)   (7.5)
    Interest capitalized                                    --    25.0
    Changed to provision for writedown on withdrawal
      from property development                           21.0      --
    Total                                                (32.8)  (51.0)
    The provision for writedown on withdrawal from property development has been reduced by interest of 21.0 million pounds, as reflected above, and increased by rental income of 5.7 million pounds.
    (F) -- Taxation (in millions of pounds)
    U.K. corporation tax at 33.58 percent
      (1990: 35 percent)                                  (1.9)   36.6
    Overseas taxation                                      0.5     0.4
    Deferred taxation                                      9.3    (3.3)
    Prior year items (including a deferred taxation
     charge of 8 million pounds)                          (7.9)   (8.4)
    Financial services division                             --    11.5
    Total                                                   --    36.8
    (G) -- Extraordinary Items (in millions of pounds):
    Writedown on withdrawal from property development    (155.0) (169.0)
    Less taxation relief (including deferred taxation
     of 10.0 million pounds)                               16.0    49.5
    Total                                                (139.0) (119.5)
    Disposal of financial services division               (13.0)   11.1
    Release of surplus prior year tax provisions             --    24.5
    Total                                                (152.0)  (83.9)
    (H) -- Profit and Loss Account
    The above profit and loss account is an abridged version of the group's statutory accounts upon which the auditors have neither qualified their opinion, nor included a statement under Section 237(2) or (3) of the Companies Act 1985.  The statutory accounts will be filed with the Registrar of Companies in due course.
    -0-                    11/14/91 AA NY016
    /END FIRST AND FINAL ADD/ CO:  The Burton Group PLC ST: IN: SU:  ERN GK-TS -- NY016A -- 4377 11/14/91 11:20 EST
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Date:Nov 14, 1991
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