Signet Again Reports Strong Results.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 Nasdaq NMS See NetWare Management System. :SIGY Sigy is a French commune located in the Seine-et-Marne département, in the Île-de-France région. Demographics Inhabitants of Sigy are called Sigyssois. As of the census of 1999, the village has a population of 70. ) today released unaudited Interim Results for 26 weeks ended 31 July July: see month. 2004.
Reported At Constant
Basis Exchange
Rates(1)
Group profit before tax: GBP 53.9m up 14% up 27%
Group like for like sales: up 7%
Group Sales: GBP 671.7m up 1% up 10%
Earnings per share: 2.0p up 11% up 25%
Interim dividend per share: 0.375p up 10%
(1) See note 10 for reconciliation.
Operational Highlights:
-- US: - Further increase in market share
- Sales benefited from increased marketing
- Gross margin broadly maintained
-- UK: - Focus on diamonds continued to benefit sales and
store productivity
- Gross margin ahead of last year
2004/05 Store Investment:
-- Group: - Capital expenditure to increase to c. GBP 80m
(2003/04: GBP 50.9m)
-- US: - 8% space increase planned for year
-- UK: - 85 store remodels and resites planned, versus 32 last
year
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: "The Group had an excellent first half with profit before tax up 27.1% at constant exchange rates. The US division continued to gain market share, driven by an 8.2% increase in like for like sales and new store openings. In the UK our business again outperformed the retail market with like for like sales up 5.5%. While there has been some softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. of the trading environment in August on both sides of the Atlantic, this is not necessarily indicative indicative: see mood. of trading prospects for the balance of the year. Our businesses continue to implement a range of initiatives and are well positioned to compete during the important Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). season." 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 Signet operated 1,725 speciality retail 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. stores at 31 July 2004; these included 1,126 stores in the US, where the Group trades as "Kay KAY Kick Ass Year KAY Kansas Association of Youth Jewelers", "Jared Jared (jâr`ĭd), in the Bible, father of Enoch. It is also spelled Jered. The Galleria Of Jewelry" and under a number of regional names. At that date Signet operated 599 stores in the UK, where the Group trades as "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 ", "Ernest Jones
Alfred Ernest Jones (January 1, 1879 – February 11, 1958) Welsh neurologist, psychoanalyst and Sigmund Freud’s official biographer. " 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. Interim Results Statement Group In the 26 weeks to 31 July 2004 profit before tax at constant exchange rates rose by 27.1%. 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 some 14% in the US dollar
compared to the same period last year impacted on reported results.
Notwithstanding this, profit before tax as reported at actual exchange
rates increased by 13.7% to GBP GBPIn 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. 53.9 million (H1 2003/04: GBP 47.4 million restated; see prior year adjustment for details of new accounting policy). The results also reflect a non-recurring restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of GBP 1.7 million in the UK. Like for like sales increased by 7.4%. Total sales at constant exchange rates were up by 10.2%; at actual exchange rates the increase was 0.8% to GBP 671.7 million (H1 2003/04: GBP 666.2 million restated). 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 constant exchange rates rose by 22.9%. On a reported basis the increase was 9.5% at GBP 58.6 million (H1 2003/04: GBP 53.5 million restated). Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved to 8.7% (H1 2003/04: 8.0% restated). Earnings per share were up by 11.1% to 2.0p (H1 2003/04: 1.8p restated), the tax rate being reduced to 34.5% (H1 2003/04: 35.7% restated). The Board has declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. an interim dividend of 0.375p per ordinary share (H1 2003/04: 0.341p), an increase of 10.0%. While there has been some softening of the trading environment in August on both sides of the Atlantic, this is not necessarily indicative of trading prospects for the balance of the year. Our businesses continue to implement a range of initiatives and are well positioned to compete during the important Christmas season. OPERATING REVIEW US (circa circa prep. Abbr. ca In approximately; about. 70% of Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. ) Operating profit increased by 28.1% at constant exchange rates. The division again outperformed its main competition and gained further market share. On a reported basis operating profit rose by 12.8% to GBP 54.7 million (H1 2003/04: GBP 48.5 million restated). This reflected strong like for like sales growth of 8.2%, resulting in further leverage of the cost base. Sales rose by 13.1% at constant exchange rates but were down 0.5% on a reported basis at GBP 471.4 million (H1 2003/04: GBP 473.7 million restated). The period was marked by an exceptionally good Valentine's Day Valentine's Day: see Saint Valentine's Day. Valentine's Day Lovers' holiday celebrated on February 14, the feast day of St. Valentine, one of two 3rd-century Roman martyrs of the same name. St. performance. Subsequent trading in the period was strong, reflecting consistent execution of the division's growth strategy as well as benefit from soft sales comparatives in the first half of last year. The mall mall: see shopping center. (World-Wide Web) mall - A collection of World-Wide Web documents featuring commercial products and services, usually served by one particualr Internet access provider. stores achieved a solid like for like sales increase and Jared, the off-mall destination superstore su·per·store n. A very large retail store that stocks highly diversified merchandise, such as groceries, toys, and camera equipment, or a wide variety of mechandise in a specific product line, such as computers or sporting goods. , performed particularly well. The average unit selling price rose by 9.9% reflecting price increases, further growth of Jared, and changes in product mix. Gross margin was broadly maintained at a level comparable to the same period last year; a range of management initiatives, including price increases, offset the higher cost of gold and planned mix changes. Operating margin increased to 11.6% (H1 2003/04: 10.2% restated). Bad debt charges were 2.5% of total sales (H1 2003/04: 2.6%), this being a further improvement on the average of the previous five years. The bridal and diamond categories continued to perform well and the gold category benefited from programmes conducted in collaboration Working together on a project. See collaborative software. with the World Gold Council. The development of the luxury watch category in Jared again made excellent progress. The period also benefited from increased marketing activity, particularly over Valentine's Day, with more television advertising supporting Kay and Jared. A further shift to television advertising for both divisions is planned for the Christmas period although it is expected that the overall annual advertising cost to sales ratio will be broadly maintained at last year's level. Staff recruitment recruitment /re·cruit·ment/ (re-krldbomact´ment) 1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged. 2. and training remains a priority, and other customer service initiatives include improved special order and repair procedures. During the period there were 24 mall store openings and four closures. It is expected that 21 mall stores will be opened in the second half and, in line with the normal seasonal pattern, 16 closed. 34 mall stores were refurbished or relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. in the first half, with a further 51 scheduled for the second half. The development of Kay stores in off-mall centres, which started last year, continues with a further 10 sites being opened this year and additional locations planned for 2005. Three Jared stores opened in the period, with a further 12 scheduled for the second half. It is expected that approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 8% will have been added to total US selling space by the end of the current year, at the top end of the strategic space growth target. The store complement will then consist of 1,039 mall stores, 20 off-mall Kay stores and 94 Jared stores. UK (circa 30% of Group sales) Like for like sales increased by 5.5% and total sales by 4.1% to GBP 200.3 million (H1 2003/04: GBP 192.5 million). UK operating profit rose by 11.5% prior to a non-recurring restructuring charge of GBP 1.7 million. After accounting for the restructuring charge operating profit was GBP 7.0 million (H1 2003/04: GBP 7.8 million). The restructuring charge reflects the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. and consolidation of central administration functions to enhance efficiency and should result in future cost savings of about GBP 0.6 million per annum Per annum Yearly. . The division again outperformed the general retail sector. H.Samuel (18% of Group sales) and Ernest Jones (12% of Group sales) achieved like for like sales increases of 3.6% and 7.9% respectively; the performance over Valentine's Day was particularly strong. Gross margin was above last year's level and the operating margin, excluding the non-recurring charge, increased to 4.3% (H1 2003/04: 4.1%), reflecting improved store productivity. Diamond participation in the sales mix sales mix See product mix. again showed a further encouraging increase of about 1.65 percentage points in both H.Samuel and Ernest Jones. Compared to the same period last year the average unit selling price increased by 4.7% in H.Samuel and by 2.0% in Ernest Jones. Improvements took place in the diamond range, in-store 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. presentation, staff training, marketing and store design. The more open store design intended to enable greater interaction between the sales person and the customer, which has been developed and tested over the last three years, was rolled out to 53 stores in the first half (including one new store opening), bringing the total up to 105 (2 August 2003: 20 stores). By Christmas 147 stores, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. H.Samuel, are expected to be trading in the revised format, accounting for about 30% of the division's sales. A further two H.Samuel stores and seven Ernest Jones stores are planned to be opened by the end of the year, and it is anticipated that, net of six store closures, there will then be 399 H.Samuel and 203 Ernest Jones stores. Group costs, net interest and taxation Group central costs were GBP 3.1 million (H1 2003/04: GBP 2.8 million). Net interest payable fell to GBP 4.7 million (H1 2003/04: GBP 6.1 million), primarily as a result of the lower level of net debt. The tax charge was GBP 18.6 million (H1 2003/04: GBP 16.9 million restated). Net debt Net debt at 31 July 2004 was GBP 131.1 million (2 August 2003: GBP 164.7 million). Group gearing (that is the ratio of net debt to shareholders' funds) at 31 July 2004 was 18.3% (2 August 2003: 23.9% restated). Since the beginning of this financial year net debt has increased by GBP 51.2 million before translation differences (H1 2003/04: up GBP 25.0 million), reflecting seasonal factors, higher levels of capital expenditure and dividend payments together with the market purchase of shares to satisfy the exercise of share options. Fixed capital investment in the current year is expected to be about GBP 80 million (2003/04: GBP 50.9 million), reflecting additional space growth in the US and the increased store investment programme in the UK. Prior Year Adjustment Following an amendment to FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 5 'Reporting the substance of transactions' in the form of 'Application Note G - Revenue Recognition', the Group, for financial year 2004/05, has changed its accounting policy in respect of extended service agreements in the US. The Group now spreads the revenue arising from the sale of such agreements over the anticipated period of claims. Previously the Group recognised the revenue from such plans at the date of sale with provision being made for the estimated cost of future claims arising. As a result of the change the Group has restated prior years. Therefore the previously reported full year 2003/04 results now reflect a decrease in sales of GBP 7.4 million and a non-cash reduction in profit before tax of GBP 7.2 million. Consequently, restated profit before tax for the 52 weeks ended 31 January January: see month. 2004 is GBP 204.7 million. It is anticipated that the impact on results for the 52 weeks ending 29 January 2005 will be a decrease in sales of circa GBP 6.5 million and in profit before tax of circa GBP 5.8 million. The effect on reserves brought forward at 31 January 2004 is a reduction of GBP 35.1 million net of deferred tax, with shareholders' funds at 31 January 2004 therefore restated to GBP 692.5 million. There is no impact on the like for like sales figures sales figures npl → cifras fpl de ventas . The restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of 26 weeks to 2 August 2003 resulted in a reduction of GBP 0.4 million in profit before tax. There will be a presentation to analysts at 2.00 p.m. (BST (convention) BST - British Summer Time. The name for daylight-saving time in the UK GMT time zone. ) and 9.00 a.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). For all interested parties there will be a simultaneous audio webcast available on the Signet Group web site (www.signetgroupplc.com) and a live telephone conference call. The details for the conference call are: European dial-in: +44 (0) 207 984 7582 Password: "Signet" European 48 hr. replay: +44 (0) 207 984 7578 Access code: 848463 US dial-in: +1 718 354 1158 Password: "Signet" US 48 hr. replay: +1 718 354 1112 Access code: 848463 A video webcast of the presentation is expected to be available from close of business today at www.signetgroupplc.com and on the Thomson RAW broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). network. 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, 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 2003/04 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on April 22, 2004 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 . The interim report will be posted to shareholders on or around 20 September September: see month. 2004. Copies of the interim report may be obtained from the Company Secretary, Zenith zenith, in astronomy, the point in the sky directly overhead; more precisely, it is the point at which the celestial sphere is intersected by an upward extension of a plumb line from the observer's location. House, The Hyde Hyde, town (1991 pop. 33,657), Tameside metropolitan district, NW England, in the Greater Manchester metropolitan area. It has iron foundries and factories that produce cotton, machinery, rubber, paper, and hats. , London NW9 6EW. The third quarter sales for the 13 weeks ending 30 October October: see month. 2004 are 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 November November: see month. 2004.
Unaudited interim consolidated profit and loss account
for the periods ended 31 July 2004
52 weeks
13 weeks 26 weeks ended
13 ended 26 ended 31
weeks 2 August weeks 2 August January
ended 2003 ended 2003 2004
31 as 31 as as
July restated July restated restated
2004 (1) 2004 (1) (1)
-------------------- ----- ------ --------- ------ --------- ---------
Notes GBP m GBP m GBP m GBP m GBP m
-------------------- ----- ------ --------- ------ --------- ---------
Sales 2, 9 328.6 324.9 671.7 666.2 1,609.8
-------------------- ----- ------ --------- ------ --------- ---------
Operating profit 2 29.3 27.2 58.6 53.5 215.1
Net interest payable
and similar charges 3 (2.6) (3.0) (4.7) (6.1) (10.4)
-------------------- ----- ------ --------- ------ --------- ---------
Profit on ordinary
activities before
taxation 9 26.7 24.2 53.9 47.4 204.7
Tax on profit on
ordinary activities 4 (9.2) (8.6) (18.6) (16.9) (72.1)
-------------------- ----- ------ --------- ------ --------- ---------
Profit for the
financial period 17.5 15.6 35.3 30.5 132.6
Dividends 6 (6.5) (5.8) (6.5) (5.8) (43.2)
-------------------- ----- ------ --------- ------ --------- ---------
Retained profit
attributable to
shareholders 11.0 9.8 28.8 24.7 89.4
-------------------- ----- ------ --------- ------ --------- ---------
Earnings per share
- basic 1.0p 0.9p 2.0p 1.8p 7.7p
- diluted 7 1.0p 0.9p 2.0p 1.8p 7.7p
-------------------- ----- ------ --------- ------ --------- ---------
All of the above relates to continuing activities.
(1) Restated for the implementation in 2004/05 of the amendment to FRS
5, 'Application Note G - Revenue Recognition' (see note 9).
Unaudited consolidated balance sheet
at 31 July 2004
31 2 August 31 January
July 2003 as 2004 as
2004 restated(1) restated(1)
----------------------------- ----- ------- ------------- ------------
Notes GBP m GBP m GBP m
----------------------------- ----- ------- ------------- ------------
Fixed assets
Intangible assets 16.3 19.7 16.8
Tangible assets 220.3 214.8 202.8
----------------------------- ----- ------- ------------- ------------
236.6 234.5 219.6
----------------------------- ----- ------- ------------- ------------
Current assets
Stocks 562.4 562.4 541.5
Debtors (see note below) 316.0 337.8 355.6
Cash at bank and in hand 28.4 31.1 128.0
----------------------------- ----- ------- ------------- ------------
906.8 931.3 1,025.1
Creditors: amounts falling
due within one year (244.0) (258.2) (361.8)
----------------------------------
Bank loans and overdrafts (20.8) (25.2) (59.3)
Other (223.2) (233.0) (302.5)
----------------------------------
Net current assets (see note
below) 662.8 673.1 663.3
----------------------------- ----- ------- ------------- ------------
Total assets less current
liabilities 899.4 907.6 882.9
Creditors: amounts falling
due after more than one year (176.7) (211.1) (184.0)
----------------------------------
Bank loans (137.9) (166.3) (146.2)
Other (38.8) (44.8) (37.8)
----------------------------------
Provisions for liabilities
and charges (6.2) (7.2) (6.4)
----------------------------- ----- ------- ------------- ------------
Total net assets 716.5 689.3 692.5
----------------------------- ----- ------- ------------- ------------
Capital and reserves - equity
Called up share capital 8.7 8.6 8.6
Reserves 707.8 680.7 683.9
----------------------------- ----- ------- ------------- ------------
Shareholders' funds 8 716.5 689.3 692.5
----------------------------- ----- ------- ------------- ------------
Note: Debtors and net current assets include amounts recoverable after
more than one year of GBP 18.5 million (2 August 2003: GBP 27.2
million, 31 January 2004: GBP 16.1 million).
Unaudited consolidated statement of total recognised gains and losses
for the periods ended 31 July 2004
13 13 26 26 52
weeks weeks weeks weeks weeks
ended ended ended ended ended
31 2 August 31 2 August 31 January
July 2003 as July 2003 as 2004 as
2004 restated(1) 2004 restated(1) restated(1)
----------------- ------ ------------ ------ ------------ ------------
GBP m GBP m GBP m GBP m GBP m
----------------- ------ ------------ ------ ------------ ------------
Profit for the
financial period 17.5 15.6 35.3 30.5 132.6
Translation
differences (17.0) 0.9 - 18.0 (96.7)
Actuarial gain
arising on
pension asset - - - - 6.4
----------------- ------ ------------ ------ ------------ ------------
Total recognised
gains and losses
relating to the
period 0.5 16.5 35.3 48.5 42.3
Prior year
adjustments
arising on the
adoption of:
FRS 5,
'Application
Note G -
Revenue
Recognition'
(note 9) (35.1) - (35.1) - -
FRS 17 -
'Retirement
Benefits' - - - (18.1) (18.1)
----------------- ------ ------------ ------ ------------ ------------
Total recognised
gains and losses (34.6) 16.5 0.2 30.4 24.2
----------------- ------ ------------ ------ ------------ ------------
(1) Restated for the implementation in 2004/05 of the amendment to FRS
5, 'Application Note G - Revenue Recognition' (see note 9).
Unaudited consolidated cash flow statement
for the periods ended 31 July 2004
13 13 26 26 52
weeks weeks weeks weeks weeks
ended ended ended ended ended
31 2 31 2 31
July August July August January
2004 2003 2004 2003 2004
------------------------------- ------ ------- ------ ------- --------
GBP m GBP m GBP m GBP m GBP m
------------------------------- ------ ------- ------ ------- --------
Net cash inflow from operating
activities 20.4 35.4 69.9 72.4 203.8
Net cash outflow from returns
on investments and
servicing of finance (2.9) (3.2) (5.3) (6.5) (11.0)
Taxation paid (21.3) (17.9) (38.0) (38.8) (69.0)
Net cash outflow for capital
expenditure and
financial investment (22.7) (14.5) (35.7) (23.9) (50.7)
Equity dividends paid (37.3) (30.8) (37.3) (30.8) (36.7)
------------------------------- ------ ------- ------ ------- --------
Cash (outflow)/inflow before
use of liquid resources and
financing (63.8) (31.0) (46.4) (27.6) 36.4
Management of liquid resources
- decrease/(increase)
in bank deposits 83.9 40.2 99.5 59.1 (42.4)
Financing - proceeds from issue
of shares 2.9 2.5 4.7 2.6 6.3
- purchase of own
shares (4.7) - (9.5) - -
- repayment of bank
loans (9.0) (10.3) (9.8) (10.4) (12.1)
------------------------------- ------ ------- ------ ------- --------
Increase/(decrease) in cash in
the period 9.3 1.4 38.5 23.7 (11.8)
------------------------------- ------ ------- ------ ------- --------
Reconciliation of net cash flow to movement in net debt
------------------------------- ------ ------- ------ ------- --------
Increase/(decrease) in cash in
the period 9.3 1.4 38.5 23.7 (11.8)
Cash inflow from increase in
debt 9.0 10.3 9.8 10.4 12.1
Cash (inflow)/outflow from
(decrease)/increase in liquid
resources (83.9) (40.2) (99.5) (59.1) 42.4
------------------------------ ------- ------- ------- ------- -------
Change in net debt resulting
from cash flows (65.6) (28.5) (51.2) (25.0) 42.7
Translation difference 2.7 1.5 - 0.4 17.5
------------------------------ ------- ------- ------- ------- -------
Movement in net debt in the
period (62.9) (27.0) (51.2) (24.6) 60.2
Opening net debt (68.2) (137.7) (79.9) (140.1) (140.1)
------------------------------ ------- ------- ------- ------- -------
Closing net debt (131.1) (164.7) (131.1) (164.7) (79.9)
------------------------------ ------- ------- ------- ------- -------
Reconciliation of operating profit to operating cash flow(1)
------------------------------- ------ ------- ------ ------- --------
Operating profit 29.3 27.2 58.6 53.5 215.1
Depreciation and amortisation
charges 9.6 9.4 18.8 18.7 40.4
Decrease/(increase) in stocks - 16.7 (20.9) (12.6) (44.9)
Decrease/(increase) in debtors 11.0 14.7 39.6 37.8 (31.1)
(Decrease)/increase in creditors (29.3) (32.4) (25.9) (24.7) 25.4
Decrease in other provisions (0.2) (0.2) (0.3) (0.3) (1.1)
----------------------------------- ------ ------ ------ ------ ------
Net cash inflow from operating
activities 20.4 35.4 69.9 72.4 203.8
----------------------------------- ------ ------ ------ ------ ------
(1) Restated for the implementation in 2004/05 of the amendment to FRS
5, 'Application Note G - Revenue Recognition' (see note 9).
Notes to the unaudited interim financial results
for the periods ended 31 July 2004
----------------------------------------------------------------------
1. Basis of preparation
These interim financial statements are unaudited and do not
constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985. They have been prepared on a basis which
is consistent with the financial statements for the 52 weeks ended
31 January 2004. The comparative figures for the 52 weeks ended 31
January 2004 are not the Company's statutory accounts for that
period. Those accounts have been reported on by the Company's
auditors under Section 235 of the Companies Act 1985 and have been
delivered to the Registrar of Companies. 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 13 26 26 52
weeks weeks weeks weeks weeks
ended ended ended ended ended
31 2 August 31 2 August 31 January
July 2003 as July 2003 as 2004 as
2004 restated(1) 2004 restated(1) restated(1)
----------------- ------ ------------ ------ ------------ ------------
GBP m GBP m GBP m GBP m GBP m
----------------- ------ ------------ ------ ------------ ------------
Sales by origin
and destination
UK, Channel
Islands &
Republic of
Ireland 103.1 99.9 200.3 192.5 501.0
US 225.5 225.0 471.4 473.7 1,108.8
----------------- ------ ------------ ------ ------------ ------------
328.6 324.9 671.7 666.2 1,609.8
----------------- ------ ------------ ------ ------------ ------------
Operating profit/(loss)
UK, Channel Islands &
Republic of Ireland
- Trading(2) 4.0 5.4 7.0 7.8 76.6
- Group central
costs (1.6) (1.4) (3.1) (2.8) (5.7)
----------------- ------ ------------ ------ ------------ ------------
2.4 4.0 3.9 5.0 70.9
US 26.9 23.2 54.7 48.5 144.2
----------------- ------ ------------ ------ ------------ ------------
29.3 27.2 58.6 53.5 215.1
----------------- ------ ------------ ------ ------------ ------------
The Group's results derive from one business segment - the retailing
of jewellery, watches and gifts.
(1) Restated for the implementation in 2004/05 of the amendment to FRS
5, 'Application Note G - Revenue Recognition' (see note 9).
(2) UK trading profit for the 13 weeks and 26 weeks ended 31 July 2004
includes a non-recurring restructuring charge of GBP 1.7 million.
----------------------------------------------------------------------
3. Net interest payable and similar charges
13 13 26 26 52
weeks weeks weeks weeks weeks
ended ended ended ended ended
31 2 31 2 31
July August July August January
2004 2003 2004 2003 2004
------------------------------- ------ ------- ------ ------- --------
GBP m GBP m GBP m GBP m GBP m
------------------------------- ------ ------- ------ ------- --------
Net interest payable (2.9) (3.2) (5.3) (6.5) (11.0)
FRS 17 - net interest credit 0.3 0.2 0.6 0.4 0.6
------------------------------- ------ ------- ------ ------- --------
(2.6) (3.0) (4.7) (6.1) (10.4)
------------------------------- ------ ------- ------ ------- --------
----------------------------------------------------------------------
4. Taxation
The net taxation charges in the profit and loss account for the 13
weeks and 26 weeks ended 31 July 2004 have been based on the
anticipated effective taxation rate for the 52 weeks ending 29
January 2005.
Notes to the unaudited interim financial results
for the periods ended 31 July 2004
----------------------------------------------------------------------
5. Translation differences
The exchange rates used for the translation of US dollar
transactions and balances in these interim statements are as
follows:
31 July 2 August 31 January
2004 2003 2004
-------------------------------------- -------- --------- ----------
Profit and loss account (average rate) 1.83 1.61 1.68
Balance sheet (closing rate) 1.82 1.60 1.82
-------------------------------------- -------- --------- ----------
The effect of restating the balance sheet at 2 August 2003 to the
exchange rates ruling at 31 July 2004 would be to decrease net debt by
GBP 19.9 million to GBP 144.8 million. Restating the profit and loss
account would decrease the operating profit for the 26 weeks ended 2
August 2003 by GBP 5.8 million to GBP 47.7 million and the profit
before taxation for the 26 weeks ended 2 August 2003 by GBP 5.0
million to GBP 42.4 million.
----------------------------------------------------------------------
6. Dividend
The dividend of 0.375p per share will be paid on 5 November 2004
to shareholders on the register of members at the close of
business on 8 October 2004.
----------------------------------------------------------------------
7. Earnings per share
52 weeks
13 weeks 26 weeks ended
ended ended 31
13 weeks 2 August 26 weeks 2 August January
ended 2003 as ended 2003 as 2004 as
31 July restated 31 July restated restated
2004 (1) 2004 (1) (1)
--------------------- -------- --------- -------- ---------- ---------
GBP m GBP m GBP m GBP m GBP m
--------------------- -------- --------- -------- ---------- ---------
Profit attributable
to shareholders 17.5 15.6 35.3 30.5 132.6
--------------------- -------- --------- -------- ---------- ---------
Weighted average
number of shares in
issue (million) 1,731.9 1,716.1 1,729.8 1,715.0 1,718.4
Dilutive effect of
share options
(million) 13.0 14.7 12.5 11.9 12.5
--------------------- -------- --------- -------- ---------- ---------
Diluted weighted
average number of
shares (million) 1,744.9 1,730.8 1,742.3 1,726.9 1,730.9
--------------------- -------- --------- -------- ---------- ---------
Earnings per share
- basic 1.0p 0.9p 2.0p 1.8p 7.7p
- diluted 1.0p 0.9p 2.0p 1.8p 7.7p
--------------------- -------- --------- -------- ---------- ---------
The number of shares in issue at 31 July 2004 was 1,732,741,069 (2
August 2003: 1,718,704,582 shares; 31 January 2004: 1,726,190,848
shares).
(1) Restated for the implementation in 2004/05 of the amendment to FRS
5, 'Application Note G - Revenue Recognition' (see note 9).
----------------------------------------------------------------------
8. Changes in shareholders' equity
Profit
Share and
Share premium Revaluation Special loss
capital account reserve reserves account Total
-------------- -------- -------- ----------- --------- -------- ------
GBP m GBP m GBP m GBP m GBP m GBP m
-------------- -------- -------- ----------- --------- -------- ------
Balance at 31
January 2004 8.6 60.7 3.1 142.2 513.0 727.6
Prior year
adjustment
(note 9) - - - - (35.1) (35.1)
-------------- -------- -------- ----------- --------- -------- ------
As restated 8.6 60.7 3.1 142.2 477.9 692.5
Retained
profit - - - - 28.8 28.8
Share options
exercised 0.1 3.2 - - 1.4 4.7
Purchase of
own shares(2) - - - - (9.5) (9.5)
-------------- -------- -------- ----------- --------- -------- ------
Balance at 31
July 2004 8.7 63.9 3.1 142.2 498.6 716.5
-------------- -------- -------- ----------- --------- -------- ------
(2) Shares purchased to satisfy the exercise of share options granted
to employees of Signet Group plc and its subsidiaries.
Notes to the unaudited interim financial results
for the periods ended 31 July 2004
----------------------------------------------------------------------
9. Prior year adjustment
The accounting policy in respect of extended service agreements in
the US was changed following an amendment to FRS 5 'Reporting The
Substance Of Transactions' in the form of 'Application Note G -
Revenue Recognition'. The Group now spreads the revenue arising
from the sale of such agreements over the anticipated period of
claims. Previously the Group recognised the revenue from such
plans at the date of sale with provision being made for the
estimated cost of future claims arising.
As a result of the change the Group has restated prior years.
Therefore the previously reported 2003/04 results now reflect a
decrease in sales of GBP 7.4 million and a non-cash reduction in
profit before tax of GBP 7.2 million. Consequently, restated
profit before tax for the 52 weeks ended 31 January 2004 is GBP
204.7 million. The effect on brought forward reserves at 31
January 2004 is a reduction of GBP 35.1 million net of deferred
tax, with shareholders' funds at 31 January 2004 therefore
restated to GBP 692.5 million.
The previously reported results for the 26 weeks ended 2 August
2003 now reflect a decrease in sales of GBP 1.2 million and a
non-cash reduction in profit before tax of GBP 0.4 million.
Consequently, restated profit before tax for the 26 weeks ended 2
August 2003 is GBP 47.4 million.
----------------------------------------------------------------------
10. 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 to be 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, earnings per share and net debt at
constant exchange rates, including a reconciliation to the Group's
GAAP results, is analysed below.
26 weeks 26 At Growth at
ended 31 weeks 26 constant constant
July 2004 ended weeks Growth at Impact of exchange exchange
31 ended actual exchange rates rates
July 2 August exchange rate (non- (non-
2004 2003(1) rates movement GAAP)(1) GAAP)
------------- ------ -------- --------- --------- ---------- ---------
GBP m GBP m % GBP m GBP m %
------------- ------ -------- --------- --------- ---------- ---------
Sales by
origin and
destination
UK, Channel
Islands &
Republic of
Ireland 200.3 192.5 4.1 - 192.5 4.1
US 471.4 473.7 (0.5) (56.9) 416.8 13.1
------------- ------ -------- --------- --------- ---------- ---------
671.7 666.2 0.8 (56.9) 609.3 10.2
------------- ------ -------- --------- --------- ---------- ---------
Operating
profit/
(loss)
UK, Channel
Islands &
Republic of
Ireland
- Trading 7.0 7.8 (10.3) - 7.8 (10.3)
- Group
central
costs (3.1) (2.8) n/a - (2.8) n/a
------------- ------ -------- --------- --------- ---------- ---------
3.9 5.0 n/a - 5.0 n/a
US 54.7 48.5 12.8 (5.8) 42.7 28.1
------------- ------ -------- --------- --------- ---------- ---------
58.6 53.5 9.5 (5.8) 47.7 22.9
------------- ------ -------- --------- --------- ---------- ---------
Profit before
tax 53.9 47.4 13.7 (5.0) 42.4 27.1
------------- ------ -------- --------- --------- ---------- ---------
Earnings per
share 2.0p 1.8p 11.1 (0.2)p 1.6p 25.0
------------- ------ -------- --------- --------- ---------- ---------
(1) Restated for the implementation in 2004/05 of the amendment to FRS
5, 'Application Note G - Revenue Recognition' (see note 9).
Notes to the unaudited interim financial results
for the periods ended 31 July 2004
13 weeks 13 At Growth at
ended 31 weeks 13 constant constant
July 2004 ended weeks Growth at Impact of exchange exchange
31 ended actual exchange rates rates
July 2 August exchange rate (non- (non-
2004 2003(1) rates movement GAAP)(1) GAAP)
------------- ------ -------- --------- --------- ---------- ---------
GBP m GBP m % GBP m GBP m %
------------- ------ -------- --------- --------- ---------- ---------
Sales by
origin and
destination
UK, Channel
Islands &
Republic of
Ireland 103.1 99.9 3.2 - 99.9 3.2
US 225.5 225.0 0.2 (23.2) 201.8 11.7
------------- ------ -------- --------- --------- ---------- ---------
328.6 324.9 1.1 (23.2) 301.7 8.9
------------- ------ -------- --------- --------- ---------- ---------
At 31 July 2004 At
constant
Impact of exchange
2 exchange rates
31 July August rate (non-
2004 2003 movement GAAP)
---------------------------------- ------- ------- --------- ---------
GBP m GBP m GBP m GBP m
---------------------------------- ------- ------- --------- ---------
Net debt (131.1) (164.7) 19.9 (144.8)
---------------------------------- ------- ------- --------- ---------
(1) Restated for implementation in 2004/05 of the amendment to FRS 5,
'Application Note G - Revenue Recognition' (see note 9).
Independent review report by KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen Audit Plc to Signet Group plc Introduction We have been engaged by the Company to review the financial information set out on pages 6 to 12 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company 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 the terms of our engagement to assist the Company in meeting the requirements of the Listing Rules of the Financial Services Authority The Financial Services Authority ("FSA") is an independent non-departmental public body and quasi-judicial body that regulates the financial services industry in the United Kingdom. Its main office is based in Canary Wharf, London, with another office in Edinburgh. . Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where they are to be changed in the next annual accounts in which case any changes, and the reasons for them, are to be 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). . Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of Group management and applying analytical procedures Analytical Procedures is one of financial audit skill which help an auditor understand the client's business and changes in the business, to identify potential risk areas and to plan other audit procedures. to the financial information and underlying financial data and, based thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that , assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the 13 weeks and 26 weeks ended 31 July 2004.
KPMG Audit Plc
Chartered Accountants
London
1 September 2004
Unaudited reconciliation of UK GAAP to US GAAP for
the periods ended 31 July 2004
----------------------------------------------------------------------
Estimated effect on profit for the financial periods of differences
between UK GAAP and US GAAP
26
13 weeks weeks 26 weeks 52 weeks
13 weeks ended ended ended ended
ended 2 August 31 2 August 31 January
31 July 2003 as July 2003 as 2004 as
2004 restated(1) 2004 restated(1) restated(1)
--------------- -------- ------------ ------ ------------ ------------
GBP m GBP m GBP m GBP m GBP m
--------------- -------- ------------ ------ ------------ ------------
Profit for the
financial
period in
accordance
with UK GAAP 17.5 15.6 35.3 30.5 132.6
US GAAP
adjustments:
Goodwill
amortisation
and write-offs 0.2 0.3 0.5 0.6 1.1
Sale and
leaseback
transactions 0.3 0.1 0.5 0.3 0.8
Extended
service plan
revenues(2) (38.0) (0.8) (38.3) (0.1) 3.7
Pensions (0.3) (0.5) (0.5) (1.0) (1.9)
Stock
compensation 2.1 0.3 0.8 (1.4) 0.7
--------------- -------- ------------ ------ ------------ ------------
US GAAP
adjustments
before
taxation (35.7) (0.6) (37.0) (1.6) 4.4
Taxation 12.4 0.2 13.1 0.8 (2.0)
--------------- -------- ------------ ------ ------------ ------------
US GAAP
adjustments
after taxation (23.3) (0.4) (23.9) (0.8) 2.4
--------------- -------- ------------ ------ ------------ ------------
Net income
attributable
to
shareholders
in accordance
with US GAAP (5.8) 15.2 11.4 29.7 135.0
--------------- -------- ------------ ------ ------------ ------------
Income/(loss)
per ADS in
accordance
with US GAAP:
- basic (10.0)p 26.6p 19.8p 52.0p 235.7p
- diluted (10.0)p 26.3p 19.6p 51.6p 234.0p
Weighted
average number
of ADS
outstanding
(million):
- basic 57.7 57.2 57.7 57.2 57.3
- diluted 58.2 57.7 58.2 57.6 57.9
--------------- -------- ------------ ------ ------------ ------------
Estimated effect on shareholders' funds of differences between UK GAAP
and US GAAP
2 August 31 January
31 July 2003 as 2004 as
2004 restated(1) restated(1)
----------------------------------- -------- ------------ ------------
GBP m GBP m GBP m
----------------------------------- -------- ------------ ------------
Shareholders' funds in accordance
with UK GAAP 716.5 689.3 692.5
US GAAP adjustments:
Goodwill in respect of acquisitions
(gross) 490.5 541.3 490.5
Adjustment to goodwill (58.2) (66.1) (58.2)
Accumulated goodwill amortisation (149.4) (164.9) (149.9)
Sale and leaseback transactions (8.3) (9.4) (8.9)
Extended service plan revenues - 39.7 38.3
Pensions 21.1 10.9 21.5
Depreciation of properties (2.5) (2.5) (2.5)
Revaluation of properties (3.1) (3.1) (3.1)
Dividends 6.5 5.8 37.3
----------------------------------- -------- ------------ ------------
US GAAP adjustments before taxation 296.6 351.7 365.0
Taxation (9.4) (19.3) (22.7)
----------------------------------- -------- ------------ ------------
US GAAP adjustments after taxation 287.2 332.4 342.3
----------------------------------- -------- ------------ ------------
Shareholders' funds in accordance
with US GAAP 1,003.7 1,021.7 1,034.8
----------------------------------- -------- ------------ ------------
(1) UK GAAP figures restated for implementation in 2004/05 of the
amendment to FRS 5, 'Application Note G - Revenue Recognition'
(see note 9).
(2) The adjustment in respect of extended service plan revenues
represents a non-recurring charge to reflect the impact under US
GAAP of the adoption of the revised accounting policy as noted in
(1) above.
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