Signet Reports Third Quarter 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 NYSE NYSE See: New York Stock Exchange : SIG), the world's largest speciality retail jeweller, today announces its third quarter results for the 13 week and 39 week period to 29 October October: see month. 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 10 for details. Group In the 13 week period to 29 October 2005, total sales rose to 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. 310.5 million (13 weeks to 30 October 2004: GBP 293.7 million), an increase of 5.7%. Like for like sales were up by 1.8%. Group profit before tax was GBP 3.0 million (13 weeks to 30 October 2004: GBP 7.0 million). The third quarter is traditionally a period of low profitability, therefore the decline in results should have relatively little impact on the year as a whole. 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. was GBP 5.5 million (13 weeks to 30 October 2004: GBP 9.9 million). Exchange rate movements had little effect on the results (See Note 8). In the 39 week period, total sales increased to GBP 1,033.4 million (39 weeks to 30 October 2004: GBP 978.0 million), a rise of 6.5% at constant exchange rates; at actual exchange rates there was an increase of 5.7%. Like for like sales were up by 2.9%. Group profit before tax was GBP 55.1 million (39 weeks to 30 October 2004: GBP 57.0 million) and operating profit was GBP 61.0 million (39 weeks to 30 October 2004: GBP 64.6 million). The average exchange rate for the period was GBP 1/$1.84 (39 weeks to 30 October 2004: GBP 1/$1.82). Earnings per share were 2.1p (39 weeks to 30 October 2004: 2.1p). 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) In the 13 week period to 29 October 2005, US operating profit rose by 20.3% to GBP 9.5 million (13 weeks to 30 October 2004: GBP 7.9 million). Like for like sales were up by 6.6%; performance during the latter two months of the period, although less strong, remained solid. Total sales increased by 12.1% to GBP 220.0 million (13 weeks to 30 October 2004: GBP 196.3 million). The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 4.3% (13 weeks to 30 October 2004: 4.0%). The gross margin was down due to changes in the sales mix sales mix See product mix. and commodity cost increases which were partly offset by supply chain initiatives and selective price increases. The impact on the fourth quarter is expected to be similar. While store closures due to hurricanes had little effect on the third quarter, potential uninsured losses are expected to have some impact on the fourth quarter. In the 39 week period, US operating profit was up by 19.3% at constant exchange rates and by 18.1% on a reported basis to GBP 70.6 million (39 weeks to 30 October 2004: GBP 59.8 million). Like for like sales rose by 7.6%. Total sales advanced by 12.4% at constant exchange rates and by 11.2% on a reported basis to GBP 759.6 million (39 weeks to 30 October 2004: GBP 683.3 million). The operating margin increased to 9.3% (39 weeks to 30 October 2004: 8.8%). The bad debt charge was 3.2% of total sales (39 weeks to 30 October 2004: 2.9%), comfortably in the range of recent years. Benefit continues to accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. from action to further enhance merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain ranges including the expansion of the Leo Diamond The Leo Diamond is a higher-quality certified and branded diamond sold by various retail jewelers. It is exclusively hand-cut by Leo Schachter Diamonds LLC, a fourth generation family-owned company. assortment assortment /as·sort·ment/ (ah-sort´ment) the random distribution of nonhomologous chromosomes to daughter cells in metaphase of the first meiotic division. as·sort·ment n. , development of the loose diamond and large solitaire solitaire or patience, any card game that can be played by one person. Solitaire is the American name; in England it is known as patience. There are probably more kinds of solitaire than all other card games together. ring selection, growth of fashion gold merchandise and further extension of luxury watch ranges in Jared Jared (jâr`ĭd), in the Bible, father of Enoch. It is also spelled Jered. . The holiday season will again see an increase in Kay KAY Kick Ass Year KAY Kansas Association of Youth national television advertising and Jared will enjoy local television advertising support in all stores for the first time. JB Robinson, the division's leading regional brand, will begin testing television advertising in one local market. Annual spending on marketing as a proportion of sales is planned to be slightly higher than last year due to the expansion of Jared. Net new space growth during 2005/06 is expected to be about 9%, of which Jared will account for some 60%. United Kingdom (circa 30% of Group annual sales) Against the background of continuing difficult trading conditions like for like sales decreased by 8.1% in the 13 weeks to 29 October 2005. Total sales were down by 7.1% to GBP 90.5 million (13 weeks to 30 October 2004: GBP 97.4 million). This resulted 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 2.5 million (13 weeks to 30 October 2004: GBP 3.7 million profit). In the 39 week period to 29 October 2005 like for like sales decreased by 7.9% and total sales by 7.1% to GBP 273.8 million (39 weeks to 30 October 2004: GBP 294.7 million). This was reflected in an operating loss of GBP 4.9 million (39 weeks to 30 October 2004: GBP 9.7 million profit including a GBP 1.7 million 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. ). Gross margin was ahead of last year. Tight control of costs, gross margin and inventory was maintained. The division's average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. increased further in the quarter, as did diamond participation in the sales mix. This reflected the enhanced diamond jewellery selection and continued emphasis on staff training. 226 stores, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. 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 , are now trading under the more open, customer friendly store format. Television advertising spend will be similar to last year during the 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 for both H.Samuel and Ernest Jones
Alfred Ernest Jones (January 1, 1879 – February 11, 1958) Welsh neurologist, psychoanalyst and Sigmund Freud’s official biographer. and will cover the same regions. Group Central Costs, Financing Costs, Taxation and Net Debt In the 13 week period, Group central costs were GBP 1.6 million (13 weeks to 30 October 2004: GBP 1.7 million); in the 39 weeks they were GBP 4.7 million (39 weeks to 30 October 2004: GBP 4.9 million). Financing costs for the 13 weeks were GBP 2.5 million (13 weeks to 30 October 2004: GBP 2.9 million) and for 39 weeks were GBP 5.9 million (39 weeks to 30 October 2004: GBP 7.6 million). The tax rate for the 39 weeks to 29 October 2005 was as anticipated 34.5% (39 weeks to 30 October 2004: 37.0%). Net debt at 29 October 2005 was GBP 217.9 million (30 October 2004: GBP 192.6 million). The seasonal increase in net debt resulting from cash flows in the 39 weeks to 29 October 2005 was GBP 121.2 million before translation differences (39 weeks to 30 October 2004: GBP 113.8 million). The increase reflected changes in timing of merchandise deliveries together with higher tax and dividend payments offset by the sale of the freehold Freehold, borough, United States Freehold, borough (1990 pop. 10,742), seat of Monmouth co., E central N.J.; settled c.1650, called Monmouth Courthouse (1715–1801), inc. as a town 1869, as a borough 1919. of the UK division's head office. 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: "Group profit before tax in the nine months to date was only slightly below that of last year. Our US division performed extremely well whilst the UK business experienced difficult trading conditions throughout the period. Our businesses are in good shape and are well placed to compete. As always, results for the year as a whole will be dependent on the outcome during the all important fourth quarter, which represents some 40% of annual sales." Signet operated 1,803 speciality retail jewellery stores at 29 October 2005; these included 1,202 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 601 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 Company 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 . Investor Relations Investor relations The process by which the corporation communicates with its investors. Programme Details There will be a conference call for all interested parties today at 2.00 p.m. GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 (9.00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy and 6.00 a.m. Pacific Time) and a simultaneous audiocast See streaming audio. at www.signetgroupplc.com. To help ensure the conference call begins in a timely manner, could all participants please dial in 5 to 10 minutes prior to the scheduled start time. The call details are: UK dial-in: +44 (0) 20 7365 1850 US dial-in: +1 718 354 1172 UK 48 hr. replay: +44 (0) 20 7784 1024 Pass code: 8156410# US 48 hr. replay: +1 718 354 1112 Pass code: 8156410# The Christmas Trading Statement is expected to be released on Thursday Thursday: see week. 12 January January: see month. 2006.
SIGNET GROUP plc
Unaudited interim consolidated income statement
for the 39 weeks ended 29 October 2005
13 weeks 13 weeks 39 weeks 39 weeks 52 weeks
ended ended ended ended ended
29 30 29 30 29
October October October October January
2005 2004 2005 2004 2005
----------------------------------------------------------------------
Notes GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Sales 2,8 310.5 293.7 1,033.4 978.0 1,615.5
Cost of sales (299.7) (276.7) (953.5) (888.2)(1,371.8)
----------------------------------------------------------------------
Gross profit 10.8 17.0 79.9 89.8 243.7
Administrative
expenses (15.9) (16.4) (52.4) (54.0) (69.8)
Other operating income 10.6 9.3 33.5 28.8 38.6
----------------------------------------------------------------------
Operating profit 2,8 5.5 9.9 61.0 64.6 212.5
Financing costs 3 (2.5) (2.9) (5.9) (7.6) (8.6)
----------------------------------------------------------------------
Profit before tax 8 3.0 7.0 55.1 57.0 203.9
Taxation 4 (1.0) (2.9) (19.0) (21.1) (69.1)
----------------------------------------------------------------------
Profit for the
financial period 2.0 4.1 36.1 35.9 134.8
----------------------------------------------------------------------
----------------------------------------------------------------------
Earnings per share
- basic 6 0.1p 0.2p 2.1p 2.1p 7.8p
- diluted 6 0.1p 0.2p 2.1p 2.1p 7.8p
----------------------------------------------------------------------
All of the above relate to continuing activities.
Unaudited consolidated balance sheet
at 29 October 2005
29 October 30 October 29 January
2005 2004 2005
----------------------------------------------------------------------
GBPm GBPm GBPm
----------------------------------------------------------------------
Assets
Non-current assets
Intangible assets 21.3 18.2 17.4
Property, plant and equipment 252.4 231.9 225.2
Other receivables 13.9 11.3 11.6
Retirement benefit asset - 1.7 -
Deferred tax assets 13.1 35.1 12.4
----------------------------------------------------------------------
300.7 298.2 266.6
----------------------------------------------------------------------
Current assets
Inventories 766.1 676.2 577.9
Trade and other receivables 331.5 278.3 359.4
Cash and cash equivalents 19.8 16.1 59.6
----------------------------------------------------------------------
1,117.4 970.6 996.9
----------------------------------------------------------------------
Total assets 1,418.1 1,268.8 1,263.5
----------------------------------------------------------------------
Liabilities
Current liabilities
Short-term borrowings (96.6) (71.5) (10.3)
Trade and other payables (228.0) (215.8) (163.3)
Deferred income (45.4) (39.4) (53.5)
Current tax (7.5) (29.0) (43.8)
----------------------------------------------------------------------
(377.5) (355.7) (270.9)
----------------------------------------------------------------------
Non-current liabilities
Bank loans (141.0) (137.2) (132.8)
Trade and other payables (34.5) (25.2) (26.7)
Deferred income (57.6) (51.6) (56.2)
Provisions (5.5) (6.0) (5.8)
Retirement benefit obligation (1.9) - (1.9)
----------------------------------------------------------------------
(240.5) (220.0) (223.4)
----------------------------------------------------------------------
Total liabilities (618.0) (575.7) (494.3)
----------------------------------------------------------------------
----------------------------------------------------------------------
Net assets 800.1 693.1 769.2
----------------------------------------------------------------------
Equity
Capital and reserves attributable
to equity shareholders
Called up share capital 8.7 8.7 8.7
Share premium 68.8 64.2 68.0
Other reserves 132.2 139.4 152.3
Retained earnings 590.4 480.8 540.2
----------------------------------------------------------------------
Total equity 800.1 693.1 769.2
----------------------------------------------------------------------
Unaudited consolidated statement of recognised income and expense
for the 39 weeks ended 29 October 2005
13 weeks 13 weeks 39 weeks 39 weeks 52 weeks
ended 29 ended 30 ended 29 ended 30 ended 29
October October October October January
2005 2004 2005 2004 2005
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Profit for the financial
period 2.0 4.1 36.1 35.9 134.8
Translation differences (13.6) (4.8) 54.5 (4.8) (32.6)
Gains on cash flow hedges - - 1.8 - -
Actuarial loss on
retirement benefit
scheme - - - - (3.9)
----------------------------------------------------------------------
Total recognised
(expense)/income for the
period (11.6) (0.7) 92.4 31.1 98.3
----------------------------------------------------------------------
Unaudited changes in total equity
for the 39 weeks ended 29 October 2005
Share Share Revaluation Special Reserve Retained Total
Capital premium reserve reserves for own earnings
shares
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Balance at 29
January 2005 8.7 68.0 4.3 155.9 (7.9) 540.2 769.2
Recognised
income and
expense:
-Profit for
the financial
period - - - - - 36.1 36.1
-Gains on
cash flow
hedges - - - - - 1.8 1.8
-Translation
differences - - - (21.8) - 54.5 32.7
Equity-settled
transactions - - - - - 3.3 3.3
Dividends - - - - - (45.5)(45.5)
Share options
exercised - 0.8 - - 1.7 - 2.5
----------------------------------------------------------------------
Balance at 29
October 2005 8.7 68.8 4.3 134.1 (6.2) 590.4 800.1
----------------------------------------------------------------------
Unaudited changes in total equity
for the 39 weeks ended 30 October 2004
Share Share Revaluation Special Reserve Retained Total
capital premium reserve reserves for own earnings
shares
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Balance at 31
January 2004 8.6 60.7 3.1 142.2 - 483.2 697.8
Recognised
income and
expense:
-Profit for
the financial
period - - - - - 35.9 35.9
-Translation
differences - - - 2.0 - (4.8) (2.8)
Equity-settled
transactions - - - - - 3.8 3.8
Dividends - - - - - (37.3)(37.3)
Share options
exercised 0.1 3.5 - - 1.6 - 5.2
Purchase of
own shares
by ESOT(1) - - - - (9.5) - (9.5)
----------------------------------------------------------------------
Balance at 30
October 2004 8.7 64.2 3.1 144.2 (7.9) 480.8 693.1
----------------------------------------------------------------------
(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 39 weeks ended 29 October 2005
13 weeks 13 weeks 39 weeks 39 weeks 52 weeks
ended ended ended ended ended
29 30 29 30 29
October October October October January
2005 2004 2005 2004 2005
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Cash flows from operating
activities:
Profit before tax 3.0 7.0 55.1 57.0 203.9
Depreciation charges 10.4 9.6 31.2 27.9 41.3
Financing costs 2.5 2.9 5.9 7.6 8.6
Increase in inventories (147.4) (117.0) (157.2) (137.9) (52.3)
Decrease/(increase) in
trade and other
receivables 10.7 7.9 46.0 47.5 (44.5)
Increase in payables and
deferred income 76.8 61.2 50.8 37.8 11.1
Other non-cash movements 1.0 0.9 3.0 2.5 4.5
----------------------------------------------------------------------
Cash generated from
operations (43.0) (27.5) 34.8 42.4 172.6
Interest paid (2.8) (3.4) (8.1) (9.7) (11.6)
Taxation paid (13.2) (9.0) (54.9) (47.0) (56.5)
----------------------------------------------------------------------
Net cash from operating
activities (59.0) (39.9) (28.2) (14.3) 104.5
----------------------------------------------------------------------
Investing activities:
Interest received 0.2 0.2 1.9 1.2 1.8
Proceeds from sale of
property, plant and
equipment 7.5 - 7.5 - 0.2
Purchase of plant and
equipment (24.2) (23.4) (59.4) (59.1) (70.5)
----------------------------------------------------------------------
Cash flows from investing
activities (16.5) (23.2) (50.0) (57.9) (68.5)
----------------------------------------------------------------------
Financing activities:
Proceeds from issue of
share capital 0.6 0.5 2.5 5.2 7.3
Purchase of own shares by
ESOT - - - (9.5) (9.5)
Increase in/(repayment of)
borrowings 67.7 62.5 82.3 52.7 (8.1)
Dividends paid - - (45.5) (37.3) (43.8)
----------------------------------------------------------------------
Cash flows from financing
activities 68.3 63.0 39.3 11.1 (54.1)
----------------------------------------------------------------------
Reconciliation of movement
in cash and cash
equivalents:
Net decrease in cash and
cash equivalents (7.2) (0.1) (38.9) (61.1) (18.1)
Opening cash and cash
equivalents 28.4 15.9 59.6 76.9 76.9
Translation difference (1.4) 0.3 (0.9) 0.3 0.8
----------------------------------------------------------------------
Closing cash and cash
equivalents 19.8 16.1 19.8 16.1 59.6
----------------------------------------------------------------------
Reconciliation of cash
flows to movement in net
debt:(1)
Change in net debt
resulting from cash flows (74.9) (62.6) (121.2) (113.8) (10.0)
Translation difference (2.7) 1.1 (13.2) 1.1 6.4
----------------------------------------------------------------------
Movement in net debt in
the period (77.6) (61.5) (134.4) (112.7) (3.6)
Opening net debt (140.3) (131.1) (83.5) (79.9) (79.9)
----------------------------------------------------------------------
Closing net debt (217.9) (192.6) (217.9) (192.6) (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 39 weeks ended 29 October 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") expected to be endorsed
by the European Union ("EU") and available for use by European
companies for accounting periods beginning on or after 1 January
2005. IFRS is subject to review and possible amendment or
interpretive 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
for the adoption of IFRS, details of which are given in Note 10
below. These policies assume that the amendments to IAS 19
'Employee Benefits', allowing actuarial 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,
have been reported on by the Company's auditors and have been
delivered to the Registrar of Companies 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 39 weeks 39 weeks 52 weeks
ended ended ended ended ended
29 30 29 30 29
October October October October January
2005 2004 2005 2004 2005
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Sales by origin and
destination
UK, Channel Islands &
Republic of Ireland 90.5 97.4 273.8 294.7 507.7
US 220.0 196.3 759.6 683.3 1,107.8
----------------------------------------------------------------------
310.5 293.7 1,033.4 978.0 1,615.5
----------------------------------------------------------------------
Operating (loss)/profit
UK, Channel Islands &
Republic of Ireland
-Trading(1) (2.5) 3.7 (4.9) 9.7 76.9
-Group central costs (1.5) (1.7) (4.7) (4.9) (6.8)
----------------------------------------------------------------------
(4.0) 2.0 (9.6) 4.8 70.1
US 9.5 7.9 70.6 59.8 142.4
----------------------------------------------------------------------
5.5 9.9 61.0 64.6 212.5
----------------------------------------------------------------------
The Group's results derive from one business segment - the retailing
of jewellery, watches and gifts.
(1) UK trading profit for the 39 weeks ended 30 October 2004 and for
the 52 weeks ended 29 January 2005 includes a restructuring charge
of GBP 1.7 million.
3. Financing costs
13 weeks 13 weeks 39 weeks 39 weeks 52 weeks
ended ended ended ended ended
29 30 29 30 29
October October October October January
2005 2004 2005 2004 2005
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Interest payable (2.8) (3.4) (8.1) (9.7) (11.6)
Pensions financing credit 0.1 0.3 0.3 0.9 1.2
Interest receivable 0.2 0.2 1.9 1.2 1.8
----------------------------------------------------------------------
(2.5) (2.9) (5.9) (7.6) (8.6)
----------------------------------------------------------------------
Notes to the unaudited interim financial results
for the 39 weeks ended 29 October 2005
4. Taxation
The net taxation charges in the profit and loss accounts for the
13 weeks and 39 weeks ended 29 October 2005 have 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:
29 30 29
October October January
2005 2004 2005
----------------------------------------------------------------------
Profit and loss account (average rate) 1.84 1.82 1.86
Balance sheet (closing rate) 1.78 1.83 1.89
----------------------------------------------------------------------
The effect of restating the balance sheet at 30 October 2004 to
the exchange rates ruling at 29 October 2005 would be to increase
net debt by GBP 5.6 million to GBP 198.2 million. Restating the
profit and loss account would decrease the pre-tax profit for the
39 weeks ended 30 October 2004 by GBP 0.5 million to GBP 56.5
million.
6. Earnings per share
13 weeks 13 weeks 39 weeks 39 weeks 52 weeks
ended ended ended ended ended
29 30 29 30 29
October October October October January
2005 2004 2005 2004 2005
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Profit attributable to
shareholders 2.0 4.1 36.1 35.9 134.8
----------------------------------------------------------------------
Weighted average number
of shares in issue
(million) 1,736.6 1,732.9 1,736.3 1,730.8 1,731.6
Dilutive effect of share
options (million) 5.5 5.3 5.8 5.1 3.6
----------------------------------------------------------------------
Diluted weighted average
number of shares
(million) 1,742.1 1,738.2 1,742.1 1,735.9 1,735.2
----------------------------------------------------------------------
Earnings per share
- basic 0.1p 0.2p 2.1p 2.1p 7.8p
- diluted 0.1p 0.2p 2.1p 2.1p 7.8p
----------------------------------------------------------------------
The number of shares in issue at 29 October 2005 was 1,736,757,673 (30
October 2004: 1,733,113,548 shares, 29 January 2005: 1,735,615,152
shares).
7. Dividend
A dividend of 0.4125p per share was paid on 4 November 2005 to
shareholders on the register of members at the close of business
on 7 October 2005.
Notes to the unaudited interim financial results
for the 39 weeks ended 29 October 2005
8. 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 results, is analysed below.
39 weeks 39 weeks 39 weeks Growth at Impact of At Growth at
ended 29 ended ended actual exchange constant constant
October 29 30 exchange rate exchange exchange
2005 October October rates movement rates rates
2005 2004 (non-GAAP)(non-GAAP)
----------------------------------------------------------------------
GBPm GBPm % GBPm GBPm %
----------------------------------------------------------------------
Sales by origin
and destination
UK, Channel
Islands &
Republic of
Ireland 273.8 294.7 (7.1) - 294.7 (7.1)
US 759.6 683.3 11.2 (7.4) 675.9 12.4
----------------------------------------------------------------------
1,033.4 978.0 5.7 (7.4) 970.6 6.5
----------------------------------------------------------------------
Operating
(loss)/profit
UK, Channel
Islands &
Republic of
Ireland
-Trading (4.9) 9.7 n/a - 9.7 n/a
-Group central
costs (4.7) (4.9) n/a - (4.9) n/a
----------------------------------------------------------------------
(9.6) 4.8 n/a - 4.8 n/a
US 70.6 59.8 18.1 (0.6) 59.2 19.3
----------------------------------------------------------------------
61.0 64.6 (5.6) (0.6) 64.0 (4.7)
----------------------------------------------------------------------
Profit
before tax 55.1 57.0 (3.3) (0.5) 56.5 (2.5)
----------------------------------------------------------------------
At 29 October 2005 29 October 30 October Impact of At constant
2005 2004 exchange exchange rates
rate movement (non-GAAP)
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Net debt (217.9) (192.6) (5.6) (198.2)
----------------------------------------------------------------------
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
provides 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.
Notes to the unaudited interim financial results
for the 39 weeks ended 29 October 2005
10. 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 with IFRS as adopted by
the EU. The Group therefore now prepares its results under IFRS.
This announcement contains comparative information for the 13
weeks and 39 weeks ended 30 October 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 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 to determine its opening
balance sheet under IFRS. A number of exceptions from
retrospective 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 valuation
model and charged to income over the relevant option vesting
period. The optional transitional arrangements, which allow
companies to apply IFRS 2 fully retrospectively to all options
granted but not fully vested at the relevant reporting date, have
been used.
IFRS 3 Business Combinations
Goodwill is carried at cost with impairment reviews performed
annually and when there are indications that the carrying value
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 for until approved.
IAS 17 Leasing
Where operating leases include clauses in respect of predetermined
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 holidays are included in the
determination of the straight-line 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 with movements in these provisions
recognised in the income statement.
IAS 32 and 39 Financial Instruments
The Group has taken the exemption not to restate 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 and 39 weeks ended 30 October 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 provisions of
IAS 39 as they relate to forward currency and commodity contracts
to the extent practically and economically appropriate in order to
minimise future volatility arising from its implementation.
IAS 38 Intangible 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. Depreciation is charged on a
straight line basis over periods from three to five years.
Notes to the unaudited interim financial results
for the 39 weeks ended 29 October 2005
10. Adoption of IFRS (continued)
(ii) Reconciliation of IFRS to UK GAAP
Estimated effect on sales and profit before tax of differences between
IFRS and UK GAAP
13 weeks 39 weeks 13 weeks 52 weeks
ended ended ended ended
30 October 30 October 29 January 29 January
2004 2004 2005 2005
----------------------------------------------------------------------
GBPm GBPm GBPm GBPm
----------------------------------------------------------------------
Sales previously reported
under UK GAAP 292.1 963.8 650.6 1,614.4
US extended service
agreements restated (0.4) (2.3) 2.3 -
-------------------------------------------
Sales restated under UK
GAAP 291.7 961.5 652.9 1,614.4
IFRS adjustments:
US insurance income 2.5 7.7 2.7 10.4
Voucher promotions - 9.7 (11.9) (2.2)
Movement in returns
provision 0.8 3.0 (3.4) (0.4)
UK warranty sales (1.3) (3.9) (2.8) (6.7)
----------------------------------------------------------------------
Sales in accordance with
IFRS 293.7 978.0 637.5 1,615.5
----------------------------------------------------------------------
Profit before tax
previously reported under
UK GAAP 8.4 62.3 148.0 210.3
US extended service
agreements restated (0.4) (2.3) 2.3 -
-------------------------------------------
Profit before tax restated
under UK GAAP 8.0 60.0 150.3 210.3
IFRS adjustments:
Share-based payments (1.0) (2.9) (1.0) (3.9)
Goodwill amortisation 0.3 0.8 0.2 1.0
Leases (0.9) (2.5) (1.0) (3.5)
Movement in returns
provision 0.6 1.6 (1.6) -
----------------------------------------------------------------------
Profit before tax in
accordance with IFRS 7.0 57.0 146.9 203.9
----------------------------------------------------------------------
Taxation:
Taxation as previously
reported under UK GAAP (2.9) (21.5) (47.6) (69.1)
US extended service
agreements restated 0.1 0.9 (0.9) -
Tax effect of IFRS
adjustments (0.1) (0.5) 0.5 -
----------------------------------------------------------------------
(2.9) (21.1) (48.0) (69.1)
----------------------------------------------------------------------
----------------------------------------------------------------------
Profit for the financial
period in accordance with
IFRS 4.1 35.9 98.9 134.8
----------------------------------------------------------------------
Estimated cumulative effect on total equity of differences between
IFRS and UK GAAP
31 30 29
January October January
2004 2004 2005
----------------------------------------------------------------------
GBPm GBPm GBPm
----------------------------------------------------------------------
Total equity previously reported under UK
GAAP 674.9 719.7 739.1
US extended service agreements restated - (19.0) -
-------------------------
Total equity restated under UK GAAP 674.9 700.7 739.1
IFRS adjustments:
Share-based payments - - -
Goodwill amortisation - 0.8 1.0
Leases (14.9) (16.4) (17.9)
Revenue recognition (6.0) (5.0) (6.0)
Deferred taxation 6.5 6.5 7.5
Dividend recognition 37.3 6.5 45.5
----------------------------------------------------------------------
Total equity in accordance with IFRS 697.8 693.1 769.2
----------------------------------------------------------------------
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