10% Increase in Signet's 1st Quarter Earnings.LONDON London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. -- Signet Group Signet Group plc is the world's largest speciality retail jeweller. The British based company is listed on the London Stock Exchange and the New York Stock Exchange. The group focuses on the middle mass jewellery market and has number one positions in both the US and UK speciality plc (LSE LSE - Language Sensitive Editor :SIG and NYSE NYSE See: New York Stock Exchange :SIG), the world's largest speciality retail jeweller, today announces its first quarter results for the 13 week period from 30 January January: see month. to 30 April 2005. These results are reported under International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). ('IFRS'), see note 8 for details. Group Group profit before tax was GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 27.9 million (Q1 2004/05: GBP 26.1 million), up by 9.4% at constant exchange rates (see note 7 for reconciliation). On a reported basis the increase was 6.9% reflecting a weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of the average US dollar rate to GBP 1/$1.89 from GBP 1/$1.84
in the comparable period last year. Like for like sales rose by 3.3%.
Total sales were GBP 369.2 million (Q1 2004/05: GBP 351.9 million), up
by 7.0% at constant exchange rates and by 4.9% on a reported basis.Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. at GBP 29.5 million (Q1 2004/05: GBP 28.2 million) increased by 7.3% at constant exchange rates and by 4.6% on a reported basis. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was unchanged at 8.0%, while gross margin was up slightly compared to the same quarter last year. The tax rate was 34.4% (Q1 2004/05: 36.4%). Earnings per share rose by 10.0% to 1.1p (Q1 2004/05: 1.0p). United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (circa circa prep. Abbr. ca In approximately; about. 70% of Group annual sales) Operating profit at GBP 31.4 million (Q1 2004/05: GBP 27.1 million) was up by 18.9% at constant exchange rates and by 15.9% on a reported basis. The operating margin increased to 11.3% (Q1 2004/05: 10.6%), principally due to operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. from the increase in like for like sales. Like for like sales rose by 7.1%, although up against particularly strong prior year comparatives. Total sales increased by 11.6% at constant exchange rates and by 8.6% on a reported basis to GBP 277.9 million (Q1 2004/05: GBP 255.8 million). Gross margin was broadly in line with the first quarter in 2004/05. This reflected anticipated mix changes and commodity cost increases offset by a range of management initiatives, including selective action on selling prices. The bad debt ratio was comparable to the first quarter of last year. United Kingdom (circa 30% of Group annual sales) As previously indicated, the period saw a marked deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the general retail environment. Consequently like for like sales fell by 6.2% resulting in an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of GBP 0.4 million (Q1 2004/05: profit GBP 2.6 million). Total sales were GBP 91.3 million (Q1 2004/05: GBP 96.1 million) and gross margin showed an increase. H.Samuel's like for like sales were down 6.4% and those of Ernest Jones
Alfred Ernest Jones (January 1, 1879 – February 11, 1958) Welsh neurologist, psychoanalyst and Sigmund Freud’s official biographer. down 6.0%. Both chains saw a further increase of diamonds in the sales mix sales mix See product mix. . Group Costs, Financing Costs and Net Debt Group costs were unchanged at GBP 1.5 million. Financing costs were GBP 1.6 million (Q1 2004/05: GBP 2.1 million). Net debt at 30 April 2005 was GBP 76.0 million (1 May 2004: GBP 68.2 million). Comment Terry Burman Bur·man adj. 1. Of or relating to the principal, Burmese-speaking ethnic group of Myanmar. 2. Of or relating to Myanmar; Burmese. n. pl. Bur·mans 1. , Group Chief Executive, commented: "We are very pleased with the increase in Group earnings of 10% given the present challenging trading conditions in the UK. This underlines the benefit of operating on both sides of the Atlantic with a 70% US / 30% UK sales mix. The general retail environment in the UK remained very difficult throughout the quarter. The trading pattern Trading pattern Long-range direction of a security or commodity futures price, charted by drawing one line connecting the highest prices the security has reached and another line connecting the lowest prices at which the security has traded over the same period. was similar in both H.Samuel Samuel, two books of the Bible, originally a single work, called First and Second Samuel in modern Bibles, and First and Second Kingdoms in the Septuagint. They are considered part of "Deuteronomistic history," in which the book of Deuteronomy functions as the and Ernest Jones. We are continuing to adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. our proven strategy, although we will ensure that costs, gross margins and cash flow remain tightly managed. The US business performed strongly throughout the period with like for like sales up by 7.1%. Operating profit increased 18.9% at constant exchange rates. The division again out-performed its main competition and gained further market share. Kay KAY Kick Ass Year KAY Kansas Association of Youth continued to build on its position as the leading US speciality retail jewellery brand. Jared Jared (jâr`ĭd), in the Bible, father of Enoch. It is also spelled Jered. , our off-mall destination chain had a particularly strong quarter."
Enquiries: Terry Burman, Group Chief Executive +44 (0) 20 7399 9520
Walker Boyd, Group Finance Director +44 (0) 20 7399 9520
Mike Smith, Brunswick +44 (0) 20 7404 5959
Pamela Small, Brunswick +44 (0) 20 7404 5959
A conference call for all interested parties will take place today at 2.00 p.m. BST (convention) BST - British Summer Time. The name for daylight-saving time in the UK GMT time zone. .
European dial-in: +44 (0) 20 7365 1850
European 48 hr replay: +44 (0) 20 7784 1024 Access code: 4956717#
US dial-in: +1 718 354 1172
US 48 hr replay: +1 718 354 1112 Access code: 4956717#
The Annual General Meeting will take place at 11.00 a.m. today. The second quarter sales performance for the 13 weeks ending 30 July July: see month. 2005 is expected to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. on Thursday Thursday: see week. 4 August 2005. Signet operated 1,769 speciality retail jewellery stores at 30 April 2005; these included 1,170 stores in the US, where the Group trades as "Kay Jewelers", "Jared The Galleria Of Jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. " and under a number of regional names. At that date Signet operated 599 stores in the UK, where the Group trades as "H.Samuel", "Ernest Jones" and "Leslie Davis Leslie A. Davis was an American diplomat and wartime US consul to Harput, Ottoman Empire from 1914 to 1917, who witnessed the Armenian Genocide. Witnessing the Armenian Genocide ". Further information on Signet is available at www.signetgroupplc.com. This release includes statements which are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements, based upon management's beliefs as well as on assumptions made by and data currently available to management, appear in a number of places throughout this release and include statements regarding, among other things, our results of operation, financial condition, liquidity, prospects, growth, strategies and the industry in which the Group operates. Our use of the words "expects," "intends," "anticipates," "estimates," "may," "forecast," "objective," "plan" or "target," and other similar expressions are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties, including but not limited to general economic conditions, the merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. , pricing and inventory policies followed by the Group, the reputation of the Group, the level of competition in the jewellery sector, the price and availability of diamonds, gold and other precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. , seasonality of the Group's business and financial market risk. For a discussion of these and other risks and uncertainties which could cause actual results to differ materially, see the "Risk and Other Factors" section of the Company's 2004/05 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on May 3, 2005 and other filings made by the Company with the Commission. Actual results may differ materially from those anticipated in such forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. therein may not be realised. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
SIGNET GROUP plc
Unaudited interim consolidated income statement
for the 13 weeks ended 30 April 2005
13 weeks 13 weeks 52 weeks
ended ended ended
30 April 1 May 29 January
2005 2004 2005
------------------------------- ----- ---------- ---------- ----------
Notes GBP m GBP m GBP m
------------------------------- ----- ---------- ---------- ----------
Sales 2,7 369.2 351.9 1,615.5
Cost of sales (333.0) (316.2) (1,371.8)
------------------------------- ----- ---------- ---------- ----------
Gross profit 36.2 35.7 243.7
Administrative expenses (18.4) (17.3) (69.8)
Other operating income 11.7 9.8 38.6
------------------------------- ----- ---------- ---------- ----------
Operating profit 2,7 29.5 28.2 212.5
Financing costs 3 (1.6) (2.1) (8.6)
------------------------------- ----- ---------- ---------- ----------
Profit before tax 7 27.9 26.1 203.9
Taxation 4 (9.6) (9.5) (69.1)
------------------------------- ----- ---------- ---------- ----------
Profit for the financial period 18.3 16.6 134.8
------------------------------- ----- ---------- ---------- ----------
Earnings per share - basic 6 1.1p 1.0p 7.8p
- diluted 1.1p 1.0p 7.8p
------------------------------- ----- ---------- ---------- ----------
All of the above relates to continuing activities.
Unaudited consolidated balance sheet
at 30 April 2005
30 April 1 May 29 January
2005 2004 2005
------------------------------------- ---------- ---------- ----------
GBP m GBP m GBP m
------------------------------------- ---------- ---------- ----------
Assets
Non-current assets
Intangible assets 17.1 18.7 17.4
Property, plant and equipment 227.5 209.3 225.2
Other receivables 12.8 11.6 11.6
Retirement benefit asset - 1.7 -
Deferred tax assets 12.4 34.7 12.4
------------------------------------- ---------- ---------- ----------
269.8 276.0 266.6
------------------------------------- ---------- ---------- ----------
Current assets
Inventories 601.9 573.7 577.9
Trade and other receivables 329.1 305.3 359.4
Cash and cash equivalents 80.9 113.5 102.4
------------------------------------- ---------- ---------- ----------
1,011.9 992.5 1,039.7
------------------------------------- ---------- ---------- ----------
Total assets 1,281.7 1,268.5 1,306.3
------------------------------------- ---------- ---------- ----------
Liabilities
Current liabilities
Short-term borrowings (25.4) (29.7) (53.1)
Trade and other payables (170.6) (180.3) (161.3)
Deferred income (48.4) (47.7) (55.5)
Current tax (29.0) (47.2) (43.8)
------------------------------------- ---------- ---------- ----------
(273.4) (304.9) (313.7)
------------------------------------- ---------- ---------- ----------
Non-current liabilities
Bank loans (131.4) (150.3) (132.8)
Trade and other payables (13.3) (11.7) (12.3)
Deferred income (73.3) (67.1) (70.6)
Provisions (5.7) (6.3) (5.8)
Retirement benefit obligation (1.9) - (1.9)
------------------------------------- ---------- ---------- ----------
(225.6) (235.4) (223.4)
------------------------------------- ---------- ---------- ----------
Total liabilities (499.0) (540.3) (537.1)
------------------------------------- ---------- ---------- ----------
------------------------------------- ---------- ---------- ----------
Net assets 782.7 728.2 769.2
------------------------------------- ---------- ---------- ----------
Equity
Capital and reserves attributable to
equity shareholders
Called up share capital 8.7 8.7 8.7
Share premium 68.3 62.5 68.0
Other reserves 156.7 130.1 152.3
Retained earnings 549.0 526.9 540.2
------------------------------------- ---------- ---------- ----------
Total equity 782.7 728.2 769.2
------------------------------------- ---------- ---------- ----------
Unaudited consolidated statement of recognised income and expense
for the 13 weeks ended 30 April 2005
13 weeks 13 weeks 52 weeks
ended ended ended
30 April 1 May 29 January
2005 2004 2005
------------------------------------- ---------- ---------- ----------
GBP m GBP m GBP m
------------------------------------- ---------- ---------- ----------
Profit for the financial period 18.3 16.6 134.8
Translation differences (8.8) 25.9 (32.6)
Losses on cash flow hedges (1.7) - -
Actuarial loss on retirement benefit
scheme - - (3.9)
------------------------------------- ---------- ---------- ----------
Total recognised income and expense
for the period 7.8 42.5 98.3
------------------------------------- ---------- ---------- ----------
Unaudited changes in total equity
for the 13 weeks ended 30 April 2005
Share Share Revaluation Special
capital premium reserve reserves
------------------------------ -------- -------- ----------- ---------
GBP m GBP m GBP m GBP m
------------------------------ -------- -------- ----------- ---------
Balance at 29 January 2005 8.7 68.0 4.3 155.9
Recognised income and expense:
- Profit for the financial
period - - - -
- Losses on cash flow
hedges - - - -
- Translation differences - - - 3.7
Equity-settled transactions -
net of tax - - - -
Share options exercised - 0.3 - -
------------------------------ -------- -------- ----------- ---------
Balance at 30 April 2005 8.7 68.3 4.3 159.6
------------------------------ -------- -------- ----------- ---------
Reserve Retained Total
for own earnings
shares
------------------------------ -------- --------- ------
GBP m GBP m GBP m
------------------------------ -------- --------- ------
Balance at 29 January 2005 (7.9) 540.2 769.2
Recognised income and expense:
- Profit for the financial
period - 18.3 18.3
- Losses on cash flow
hedges - (1.7) (1.7)
- Translation differences - (8.8) (5.1)
Equity-settled transactions -
net of tax - 1.0 1.0
Share options exercised 0.7 - 1.0
------------------------------ -------- --------- ------
Balance at 30 April 2005 (7.2) 549.0 782.7
------------------------------ -------- --------- ------
Unaudited changes in total equity
for the 13 weeks ended 1 May 2004
Share Share Revaluation Special
capital premium reserve reserves
------------------------------ -------- -------- ----------- ---------
GBP m GBP m GBP m GBP m
------------------------------ -------- -------- ----------- ---------
Balance at 31 January 2004 8.6 60.7 3.1 142.2
Recognised income and expense:
- Profit for the financial
period - - - -
- Translation differences - - - (10.4)
Equity-settled transactions -
net of tax - - - -
Share options exercised 0.1 1.8 - -
Purchase of own shares(1) - - - -
------------------------------ -------- -------- ----------- ---------
Balance at 1 May 2004 8.7 62.5 3.1 131.8
------------------------------ -------- -------- ----------- ---------
Reserve Retained Total
for own earnings
shares
------------------------------ -------- --------- ------
GBP m GBP m GBP m
------------------------------ -------- --------- ------
Balance at 31 January 2004 - 483.2 697.8
Recognised income and expense:
- Profit for the financial
period - 16.6 16.6
- Translation differences - 25.9 15.5
Equity-settled transactions -
net of tax - 1.2 1.2
Share options exercised - - 1.9
Purchase of own shares(1) (4.8) - (4.8)
------------------------------ -------- --------- ------
Balance at 1 May 2004 (4.8) 526.9 728.2
------------------------------ -------- --------- ------
(1) Shares purchased to satisfy the exercise of share options granted
to employees of Signet Group plc and its subsidiaries.
Unaudited consolidated cash flow statement
for the 13 weeks ended 30 April 2005
13 weeks 13 weeks 52 weeks
ended ended ended
30 April 1 May 29 January
2005 2004 2005
------------------------------------- ---------- ---------- ----------
GBP m GBP m GBP m
------------------------------------- ---------- ---------- ----------
Cash flows from operating activities:
Profit before tax 27.9 26.1 203.9
Depreciation charges 10.1 8.9 41.3
Financing costs 1.6 2.1 8.6
Increase in inventories (28.7) (20.8) (52.3)
Decrease/(increase) in trade and
other receivables 24.6 28.6 (44.5)
Increase in payables and deferred
income 8.4 3.5 16.5
Other non-cash movements (0.1) 1.1 (0.9)
------------------------------------- ---------- ---------- ----------
Cash generated from operations 43.8 49.5 172.6
Interest paid (2.6) (3.2) (11.6)
Taxation paid (23.1) (16.7) (56.5)
------------------------------------- ---------- ---------- ----------
Net cash from operating activities 18.1 29.6 104.5
------------------------------------- ---------- ---------- ----------
Investing activities:
Interest received 1.0 0.8 1.8
Proceeds from sale of plant and
equipment - - 0.2
Purchase of plant and equipment (13.8) (13.0) (70.5)
------------------------------------- ---------- ---------- ----------
Cash flows from investing activities (12.8) (12.2) (68.5)
------------------------------------- ---------- ---------- ----------
Financing activities:
Proceeds from issue of share capital 0.3 1.8 7.3
Purchase of own shares - (4.8) (9.5)
Repayment of borrowings (2.3) (0.8) (8.1)
Dividends paid - - (43.8)
------------------------------------- ---------- ---------- ----------
Cash flows from financing activities (2.0) (3.8) (54.1)
------------------------------------- ---------- ---------- ----------
Reconciliation of movement in cash and
cash equivalents:
Net increase/(decrease) in cash and
cash equivalents 3.3 13.6 (18.1)
Opening cash and cash equivalents 59.6 76.9 76.9
Translation difference 0.4 1.7 0.8
------------------------------------- ---------- ---------- ----------
Closing cash and cash equivalents 63.3 92.2 59.6
------------------------------------- ---------- ---------- ----------
Reconciliation of cash flows to
movement in net debt:(1)
Change in net debt resulting from cash
flows 5.6 14.4 (10.0)
Translation difference 1.9 (2.7) 6.4
------------------------------------- ---------- ---------- ----------
Movement in net debt in the period 7.5 11.7 (3.6)
Opening net debt (83.5) (79.9) (79.9)
------------------------------------- ---------- ---------- ----------
Closing net debt (76.0) (68.2) (83.5)
------------------------------------- ---------- ---------- ----------
(1) Net debt represents cash and cash equivalents, short-term
borrowings and bank loans.
Notes to the unaudited interim financial results
for the 13 weeks ended 30 April 2005
1. Basis of preparation These interim financial statements have been prepared on the basis of International Accounting Standards and International Financial Reporting Standards (collectively "IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System ") expected to be endorsed by the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community ("EU") and available for use by European companies It may never be fully completed or, depending on its its nature, it may be that it can never be completed. However, new and revised entries in the list are always welcome. This is a list of companies from the countries in the European Union. for accounting periods beginning on or after 1 January 2005. IFRS is subject to review and possible amendment or interpretive in·ter·pre·tive also in·ter·pre·ta·tive adj. Relating to or marked by interpretation; explanatory. in·ter pre·tive·ly adv. guidance and therefore subject to change. Details of the
accounting policies applied are set out in the Group's Annual
Report and Accounts for the year ended 29 January 2005, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. for the adoption of IFRS, details of which are given in Note 8 below. These policies assume that the amendments to IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 19 'Employee Benefits', allowing actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin gains and losses to be recognised in full through reserves, will be endorsed by the EU. These interim financial statements are unaudited and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The comparative figures for the 52 weeks ended 29 January 2005 are not the Company's statutory accounts for that period. Those accounts, which were prepared under UK GAAP UK GAAP United Kingdom Generally Accepted Accounting Principles , have been reported on by the Company's auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together and will be delivered to the Registrar of Companies The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. following the Company's Annual General Meeting. The report of the auditors was unqualified and did not contain a statement under Section 237(2) or Section 237(3) of the Companies Act 1985. 2. Segment information
13 weeks 13 weeks 52 weeks
ended ended ended
30 April 1 May 29 January
2005 2004 2005
------------------------------------- ---------- ---------- ----------
GBP m GBP m GBP m
------------------------------------- ---------- ---------- ----------
Sales by origin and destination
UK, Channel Islands & Republic of
Ireland 91.3 96.1 507.7
US 277.9 255.8 1,107.8
------------------------------------- ---------- ---------- ----------
369.2 351.9 1,615.5
------------------------------------- ---------- ---------- ----------
Operating profit/(loss)
UK, Channel Islands & Republic of
Ireland
- Trading (0.4) 2.6 76.9
- Group central costs (1.5) (1.5) (6.8)
------------------------------------- ---------- ---------- ----------
(1.9) 1.1 70.1
US 31.4 27.1 142.4
------------------------------------- ---------- ---------- ----------
29.5 28.2 212.5
------------------------------------- ---------- ---------- ----------
The Group's results derive de·rive v. 1. To obtain or receive from a source. 2. To produce or obtain a chemical compound from another substance by chemical reaction. from one business segment - the retailing of jewellery, watches and gifts. 3. Financing costs
13 weeks 13 weeks 52 weeks
ended ended ended
30 April 1 May 29 January
2005 2004 2005
------------------------------------- ---------- ---------- ----------
GBP m GBP m GBP m
------------------------------------- ---------- ---------- ----------
Interest payable (2.6) (3.2) (11.6)
Pensions financing credit - 0.3 1.2
Interest receivable 1.0 0.8 1.8
------------------------------------- ---------- ---------- ----------
(1.6) (2.1) (8.6)
------------------------------------- ---------- ---------- ----------
4. Taxation The net taxation charge in the profit and loss account for the 13 weeks to 30 April 2005 has been based on the anticipated effective taxation rate for the 52 weeks ending 28 January 2006. 5. Translation differences The exchange rates used for the translation of US dollar transactions and balances in these interim statements are as follows:
30 April 1 May 29 January
2005 2004 2005
------------------------------------- ---------- ---------- ----------
Profit and loss account (average
rate) 1.89 1.84 1.86
Balance sheet (closing rate) 1.91 1.77 1.89
------------------------------------- ---------- ---------- ----------
The effect of restating the balance sheet at 1 May 2004 to the exchange rates ruling at 30 April 2005 would be to decrease net debt by GBP 6.8 million to GBP 61.4 million. Restating the profit and loss account would decrease the pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profit for the 13 weeks ended 1 May 2004 by GBP 0.6 million to GBP 25.5 million. 6. Earnings per share
13 weeks 13 weeks 52 weeks
ended ended ended
30 April 1 May 29 January
2005 2004 2005
------------------------------------- ---------- ---------- ----------
GBP m GBP m GBP m
------------------------------------- ---------- ---------- ----------
Profit attributable to shareholders 18.3 16.6 134.8
------------------------------------- ---------- ---------- ----------
Weighted average number of shares in
issue (million) 1,735.9 1,727.6 1,731.6
Dilutive effect of share options
(million) 6.4 14.1 6.0
------------------------------------- ---------- ---------- ----------
Diluted weighted average number of
shares (million) 1,742.3 1,741.7 1,737.6
------------------------------------- ---------- ---------- ----------
Earnings per share - basic 1.1p 1.0p 7.8p
- diluted 1.1p 1.0p 7.8p
------------------------------------- ---------- ---------- ----------
The number of shares in issue at 30 April 2005 was 1,736,181,823 (1 May 2004: 1,730,211,626 shares, 29 January 2005: 1,735,615,152 shares). 7. Impact of constant exchange rates The Group has historically used constant exchange rates to compare period-to-period changes in certain financial data. This is referred to as 'at constant exchange rates' throughout this release. The Group considers this a useful measure for analysing and explaining changes and trends in the Group's results. The impact of the re-calculation of sales, operating profit, profit before tax and net debt at constant exchange rates, including a reconciliation to the Group's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results, is analysed below.
13 weeks ended 13 13 Growth at Impact of At Growth at
30 April 2005 weeks weeks actual exchange constant constant
ended ended exchange rate exchange exchange
30 1 May rates movement rates rates
April 2004 (non- (non-
2005 GAAP) GAAP)
---------------- ------ ------ --------- --------- --------- ---------
GBP m GBP m % GBP m GBP m %
---------------- ------ ------ --------- --------- --------- ---------
Sales by origin
and destination
UK, Channel
Islands &
Republic of
Ireland 91.3 96.1 -5.0% - 96.1 -5.0%
US 277.9 255.8 8.6% (6.8) 249.0 11.6%
---------------- ------ ------ --------- --------- --------- ---------
369.2 351.9 4.9% (6.8) 345.1 7.0%
---------------- ------ ------ --------- --------- --------- ---------
Operating
profit/(loss)
UK, Channel
Islands &
Republic of
Ireland
- Trading (0.4) 2.6 n/a - 2.6 n/a
- Group central
costs (1.5) (1.5) - - (1.5) -
---------------- ------ ------ --------- --------- --------- ---------
(1.9) 1.1 n/a - 1.1 n/a
US 31.4 27.1 15.9% (0.7) 26.4 18.9%
---------------- ------ ------ --------- --------- --------- ---------
29.5 28.2 4.6% (0.7) 27.5 7.3%
---------------- ------ ------ --------- --------- --------- ---------
Profit before
tax 27.9 26.1 6.9% (0.6) 25.5 9.4%
---------------- ------ ------ --------- --------- --------- ---------
At 30 April 2005 30 April 1 May Impact of At constant
2005 2004 exchange exchange
as rate rates
reported movement (non-GAAP)
---------------------------- --------- --------- --------- -----------
GBP m GBP m GBP m GBP m
---------------------------- --------- --------- --------- -----------
Net debt (76.0) (68.2) 6.8 (61.4)
---------------------------- --------- --------- --------- -----------
8. Adoption of IFRS (i) Revised accounting policies adopted For financial years commencing on or after 1 January 2005 the Group is required to report in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with IFRS as adopted by the EU. The Group will therefore now prepare its results under IFRS, commencing with the 13 weeks to 30 April 2005. This announcement contains comparative information for the 13 weeks ended 1 May 2004 and for the 52 weeks ended 29 January 2005 that has been prepared under IFRS. IFRS is subject to review and possible amendment or interpretive guidance and therefore subject to change. Revised accounting policies adopted as a result of the application of IFRS are given below. All other accounting policies applied are consistent with those disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the Annual Report & Accounts for the 52 weeks ended 29 January 2005. These changes have no impact on the Group's historical or future cash flows or the timing of cash received and paid. The rules for the first time adoption of IFRS are set out in IFRS 1 "First-time Adoption of International Reporting Standards". In general, a company is required to determine its IFRS accounting policies and apply these retrospectively ret·ro·spec·tive adj. 1. Looking back on, contemplating, or directed to the past. 2. Looking or directed backward. 3. Applying to or influencing the past; retroactive. 4. to determine its opening balance sheet under IFRS. A number of exceptions from retrospective LAW, RETROSPECTIVE. A retrospective law is one that is to take effect, in point of time, before it was passed. 2. Whenever a law of this kind impairs the obligation of contracts, it is void. 3 Dall. 391. application are allowed to assist companies as they move to reporting under IFRS. Where the Group has taken advantage of the exemptions they are noted below. IFRS 2 Share-based Payments In accordance with IFRS 2, the Group recognises a charge to income in respect of the fair value of outstanding employee share options. The fair value is calculated using the binomial binomial (bī'nō`mēəl), polynomial expression (see polynomial) containing two terms, for example, x+y. The binomial theorem, or binomial formula, gives the expansion of the nth power of a binomial (x+ valuation model and charged to income over the relevant option vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: period. The optional transitional arrangements, which allow companies to apply IFRS 2 fully retrospectively to all options granted but not fully vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) at the relevant reporting date, have been used. IFRS 3 Business Combinations Goodwill is carried at cost with impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. reviews performed annually and when there are indications that the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. may not be recoverable. Under the transitional arrangements the Group applies IFRS 3 prospectively from the transition date. As a result, all prior business combination accounting is frozen at the transition date of 31 January 2004, and the value of goodwill is also frozen at that date. IAS 10 Proposed Dividend Dividends are not accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. for until approved. IAS 17 Leasing Where operating leases Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. include clauses in respect of predetermined pre·de·ter·mine v. pre·de·ter·mined, pre·de·ter·min·ing, pre·de·ter·mines v.tr. 1. To determine, decide, or establish in advance: rent increases, those rents are charged to the income statement on a straight line basis over the lease term. Furthermore, any construction period or other rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. holidays are included in the determination of the straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. expense period. Inducements to enter into a lease are recognised over the lease term. IAS 18 Revenue Recognition Revenue is only recognised when all significant risks of ownership have been transferred to the buyer. Provisions for returned goods are recognised in net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. with movements in these provisions recognised in the income statement. IAS 32 and 39 Financial Instruments The Group has taken the exemption exemption n. 1) in income taxation, a credit given for each dependent, blindness or other disability, and age over 65, which result in a downward calculation in tax levels. not to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state comparatives for IAS 32 'Financial Instruments: Disclosure and Presentation' and IAS 39 'Financial Instruments: Recognition and Measurement'. As a result, the comparative information in this announcement for the 13 weeks ended 1 May 2004 and for the 52 weeks ended 29 January 2005 is presented on the previously existing UK GAAP basis. The Group applies the hedge accounting Why is hedge accounting necessary? Many financial institutions and corporate businesses (entities) use derivative financial instruments to hedge their exposure to different risks (eg interest rate risk, foreign exchange risk, commodity risk, etc). provisions of IAS 39 as they relate to forward currency and commodity contracts to the extent practically and economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: appropriate in order to minimise Verb 1. minimise - represent as less significant or important downplay, understate, minimize inform - impart knowledge of some fact, state or affairs, or event to; "I informed him of his rights" future volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the arising from its implementation. IAS 38 Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. Computer software that is not an integral part of the related hardware is classified as an intangible asset and is stated at cost less accumulated depreciation accumulated depreciation The total amount of depreciation that has been recorded for an asset since its date of acquisition. For example, a computer with a 5-year estimated life that was purchased for $2,000 would have accumulated depreciation of $800 [( . Depreciation is charged on a straight line basis over periods from three to five years. (ii) Reconciliation of IFRS to UK GAAP Estimated effect on profit before tax of differences between IFRS and UK GAAP
13 weeks 52 weeks
ended ended
1 May 2004 29 January
2005
----------------------------------------------- ----------- ----------
GBP m GBP m
----------------------------------------------- ----------- ----------
Profit before tax as previously reported under
UK GAAP 28.1 210.3
US extended service agreements: restated in
2004/05(1) (1.6) -
----------- ----------
Profit before tax restated under UK GAAP 26.5 210.3
IFRS adjustments:
Share-based payments (0.9) (3.9)
Goodwill amortisation 0.3 1.0
Leases (0.9) (3.5)
Movement in returns provision 1.1 -
----------------------------------------------- ----------- ----------
Profit before tax in accordance with IFRS 26.1 203.9
----------------------------------------------- ----------- ----------
Taxation:
Taxation as previously reported under UK GAAP (9.7) (69.1)
US extended service agreements: restated in
2004/05(1) 0.6 -
Tax effect of IFRS adjustments (0.4) -
----------------------------------------------- ----------- ----------
(9.5) (69.1)
----------------------------------------------- ----------- ----------
----------------------------------------------- ----------- ----------
Profit for the financial period in accordance
with IFRS 16.6 134.8
----------------------------------------------- ----------- ----------
(1) Following adoption of the amendment to FRS 5, 'Application Note G
- Revenue Recognition' for the 52 weeks ended 29 January 2005.
Estimated cumulative effect on total equity of differences between
IFRS and UK GAAP
1 May 29 January 31 January
2004 2005 2004
------------------------------------- ---------- ---------- ----------
GBP m GBP m GBP m
------------------------------------- ---------- ---------- ----------
Total equity previously reported
under UK GAAP 760.1 739.1 674.9
US extended service agreements:
restated in 2004/05(1) (55.2) - -
---------- ---------- ----------
Total equity restated under UK GAAP 704.9 739.1 674.9
IFRS adjustments:
Share-based payments - - -
Goodwill amortisation 0.3 1.0 -
Leases (15.8) (17.9) (14.9)
Revenue recognition (4.9) (6.0) (6.0)
Deferred taxation 6.4 7.5 6.5
Dividend recognition 37.3 45.5 37.3
------------------------------------- ---------- ---------- ----------
Total equity in accordance with IFRS 728.2 769.2 697.8
------------------------------------- ---------- ---------- ----------
(1) Following adoption of the amendment to FRS 5, 'Application Note G
- Revenue Recognition' for the 52 weeks ended 29 January 2005.
9. Reconciliation of IFRS to US GAAP Whilst the Group is not required to prepare a US GAAP reconciliation on a quarterly basis, it has historically provided such a reconciliation for the convenience of shareholders and potential investors. As part of the transition to IFRS, the Group will provide IFRS to UK GAAP reconciliations for interim reporting during 2005 but does not expect to provide an IFRS to US GAAP reconciliation. The Group will provide an IFRS to US GAAP reconciliation in its financial statements for the year ended 28 January 2006 as part of its Annual Report on Form 20-F. |
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