LONDON, Sept. 3 /PRNewswire-FirstCall/ -- Signet Group plc (LSE and
NYSE: SIG), the world's largest speciality retail jeweller, today
announced unaudited half year results for the 26 weeks ended 2
August 2008. Group profit before tax: $78.7m down 27.8% (excluding
non-recurring relisting costs) Group like for like sales: down 3.4%
Group sales: $1,591.4m down 0.6% Diluted earnings per share: 2.6c
down 35.0% Interim dividend per share: 0.96c no change Operational
Highlights: US: - Net space increase of about 4% expected in
2008/09 - Results of price increases continue to be encouraging -
On track to at least maintain gross merchandise margin rate at last
year's level - Jared launches e-commerce capability - Expanded
ranges of exclusive merchandise UK: - 2.3% increase in like for
like sales - Strong performance by prestige watch category -
Commenced roll-out of enhanced Ernest Jones store format Terry
Burman, Group Chief Executive, commented: "The Group's strong
balance sheet and superior operating metrics on both sides of the
Atlantic enables the business to continue to implement its proven
strategy. Appropriate adjustments in execution are being made to
reflect the challenging economic conditions with tight control of
costs, inventory, gross merchandise margin and investment in new
space. As a result, the business will be well positioned when the
economy improves. However, in the short term, the consumer
environment in both the US and the UK remains very challenging. As
always, the results for the year will be significantly influenced
by the Group's performance during the important Christmas period."
Enquiries: Terry Burman, Group Chief Executive +1 212 889 4350
Walker Boyd, Group Finance Director +1 212 889 4350 Press: Jonathan
Glass, Brunswick +44 (0) 20 7404 5959 Wendel Verbeek, Brunswick +44
(0) 20 7404 5959 John Dudzinsky, Taylor Rafferty +1 212 889 4350
Signet operated 1,973 speciality retail jewellery stores at 2
August 2008; these included 1,414 stores in the US, where the Group
trades as "Kay Jewelers", "Jared The Galleria Of Jewelry" and under
a number of regional names. At that date Signet operated 559 stores
in the UK, where the Group trades as "H.Samuel", "Ernest Jones" and
"Leslie Davis". Further information on Signet is available at
http://www.signetgroupplc.com/. See also http://www.kay.com/,
http://www.jared.com/, http://www.hsamuel.co.uk/ and
http://www.ernestjones.co.uk/. Interim Management Report NEW YORK
LISTING On 19 August 2008 shareholders approved the proposal to
facilitate the move of the Group's primary listing to the New York
Stock Exchange ("the Proposal"). It is intended to establish
concurrently a secondary listing on the London Stock Exchange.
Subject to the necessary Court and other approvals, the Proposal is
expected to become effective on 11 September 2008 with trading in
Signet Jewelers Limited commencing on the New York Stock Exchange
("NYSE") on that date. GROUP In the 26 weeks ended 2 August 2008,
Group profit before tax excluding non-recurring costs of $10.5
million related to the move of the primary listing to the NYSE fell
by 27.8% to $78.7 million (H1 2007/08: $109.0 million), see note
10. Like for like sales were down by 3.4% and total sales were down
by 0.6% to $1,591.4 million (H1 2007/08: $1,601.8 million). The
average US dollar exchange rate for the period was �1/$1.98 (H1
2007/08: �1/$1.99). See note 10 for changes at constant exchange
rates. The components of the change in sales are set out below:
Change in sales US UK Group % % % Like for like sales (5.2) 2.3
(3.4) Change in net new store space 4.4 (1.9) 2.9 Exchange
translation - (0.5) (0.1) Total sales growth as reported (0.8)
(0.1) (0.6) Operating profit excluding relisting costs fell by
22.8% to $90.3 million (H1 2007/08: $116.9 million) and operating
margin was 5.7% (H1: 2007/08: 7.3%). On a reported basis the
operating profit was $79.8 million. The factors influencing the
lower operating margin are set out below: Change in operating
margin US UK Group % % % H1 2007/08 operating margin 10.4 (0.2) 7.3
Gross merchandise margin movement 0.9 0.7 0.8 Expense
(deleverage)/leverage (3.1) 0.7 (2.2) Impact of new store space
(0.3) - (0.2) H1 2008/09 operating margin before relisting costs
7.9 1.2 5.7 Relisting costs - - (0.7) H1 2008/09 operating margin
7.9 1.2 5.0 The tax rate was 35.8% (H1 2007/08: 36.5%) and profit
for the financial period was $43.8 million. Diluted earnings per
share excluding listing costs declined by 20.0% to 3.2c. On a
reported basis diluted earnings per share were 2.6c (H1 2007/08:
4.0c). The Board has approved an unchanged interim dividend of
0.96c. Outlook The Group's strong balance sheet and superior
operating metrics on both sides of the Atlantic enables the
business to continue to implement its proven strategy. Appropriate
adjustments in execution are being made to reflect the challenging
economic conditions with tight control of costs, inventory, gross
merchandise margin and investment in new space. As a result, the
business will be well positioned when the economy improves.
However, in the short term, the consumer environment in both the US
and the UK remains very challenging. As always, the results for the
year will be significantly influenced by the Group's performance
during the important Christmas period. OPERATING REVIEW US Division
(circa 75% of Group sales) In a very challenging retail
environment, US like for like sales were down 5.2% and total sales
decreased by 0.8% to $1,206.7 million (H1 2007/08: $1,216.9
million). The underlying like for like sales performance in the
first and second quarters was stable after adjusting for the impact
of more favorable weather over Valentine's Day than in the prior
year. Operating profit was down 24.9% at $94.8 million (H1 2007/08:
$126.3 million), primarily reflecting the deleverage of the cost
base due to the decline in same store sales (see table above). As
anticipated, the gross margin rate was up on last year due to price
changes implemented during late February and March, which more than
offset commodity cost increases, adverse changes in the sales mix
and increased promotional cadence. The results of the price
increases continue to be encouraging and the division remains on
track to at least maintain its gross merchandise margin rate in
2008/09 at last year's level. Operating margin was 7.9% (H1
2007/08: 10.4%). While all major merchandising categories were down
in the half on a same store basis, the bridal category, which
accounts for approximately 45% of sales, performed better than
average. Exclusive merchandise ranges continue to be expanded and a
number of new designs have tested very well. The average unit
selling price in both the mall formats and Jared rose by about 7%.
The bad debt charge at 3.9% of total sales (H1 2007/08: 2.8%), was
above the tight range of the past ten years. The increase in bad
debt was meaningfully offset by higher income from the receivables
portfolio. Overall the cost base, excluding the impact of new
space, is expected to be similar to last year despite an
anticipated rise in the level of bad debts and inflationary cost
increases in occupancy costs, utilities, freight and staff wage
rates. As part of the expense realignment programme, the annual
gross marketing to sales ratio is planned to be about 7% of sales,
down from 7.5% in 2007/08 and more in line with historic levels.
The reductions have been greatest in lower returning media and
formats. National television advertising for Kay and Jared will be
least impacted because they are the most effective. The marketing
to sales ratio is expected to remain considerably greater than the
jewellery sector average and to be the largest in the category. The
Jared website launched an e-commerce capability in August. It is
expected that in 2008/09 US net new store space will increase by
about 4%, including the closure of about 50 mall brand stores as
leases expire. Capital expenditure in new and existing stores is
planned to be circa $60 million (2007/08: $88 million). Investment
in working capital, that is inventory and receivables, associated
with space growth of some $90 million is anticipated (2007/08: $119
million). The planned change in store numbers by format in 2008/09,
together with the long term potential for each is set out below: 3
February Expected Expected Planned Long term 2008 openings closures
2 February potential 2009 Kay Mall 789 25(a) 14 800 850+ Off-mall
92 23 5 110 500+ Outlet centres 10 8 - 18 100+ Metropolitan 3 - - 3
5-10 Kay total 894 56 19 931 1,460+ Regional brands 351 3 41(a) 313
700+ Jared 154 17 - 171 300+ Total 1,399 76(a) 60(a) 1,415 2,460+
(a) Includes 11 stores rebranded to Kay from regional brands. UK
Division (circa 25% of Group sales) In the 26 weeks ended 2 August
2008 total sales were little changed at $384.7 million (H1 2007/08:
$384.9 million). Like for like sales were up by 2.3% (H.Samuel
+2.4% and Ernest Jones +2.2%), a very encouraging performance given
the trading environment. Operating profit was $4.5 million (H1
2007/08: $0.6 million loss), the normal seasonal deficit being
eliminated. Tight control of costs and inventory was maintained,
with gross margin increasing by 70 basis points. The expectation is
for both full year costs in sterling and gross merchandising margin
percentage to be similar to last year. The watch category continued
to perform well, particularly in Ernest Jones, and diamond
participation in H.Samuel increased further. The focus on enhancing
customer service remains a priority and progress in staff training
is increasingly evident. The average unit selling price in H.Samuel
was up 13% and in Ernest Jones it rose by 16%, reflecting changes
in sales mix and increased prices. About 53 stores are expected to
be refurbished or relocated this year (2007/08: 27), the majority
in the enhanced Ernest Jones format. Five new stores are planned to
be opened (2007/08: one) with 14 closures (2007/08: 19). Total
store capital expenditure is anticipated to be some $42 million
(2007/08: $18.4 million) primarily reflecting a return to a more
normal refit cycle in Ernest Jones following a successful test of
the new store format. At the year end, 350 H.Samuel (2 February
2008: 359) and 205 Ernest Jones (2 February 2008: 204) stores are
planned to be operating. Group central costs, financing items and
taxation In the 26 weeks ended 2 August 2008 group central costs
were $9.0 million (H1 2007/08: $8.8 million), excluding $10.5
million of non-recurring costs relating to the move of the primary
listing to the NYSE. Financing costs rose to $11.6 million (H1
2007/08: $7.9 million),the increase being primarily due to the cash
outflow in 2007/08 and a reduced pension credit. The tax charge was
$24.4 million (H1 2007/08: $39.8 million). Net debt Net debt at 2
August 2008 was $433.3 million (4 August 2007: $354.8 million).
Group gearing (that is the ratio of net debt to shareholders'
funds) at 2 August 2008 was 24.9% (4 August 2007: 20.8%). The
seasonal increase in net debt since the start of the financial year
was significantly less than last year (H1 2008/09: up $58.7
million; H1 2007/08: up $121.6 million) reflecting tight management
of working capital and lower tax payments, which more than offset
the lower level of profits. An increased number of Ernest Jones
refurbishments balanced by reduced store investment in the US, is
expected to result in fixed capital expenditure in the current year
of about $140 million, similar to the level in 2007/08. Cash
outflow for 2008/09 is now expected to be neutral to $40 million
compared with the anticipated range of $40 million and $80 million
projected at the time of the announcement of the 2007/08 results.
Risk factors and related party transactions The principal risk
factors are set out on pages 44 to 50 of the Group's Annual Report
& Accounts for the 52 weeks ended 2 February 2008 and pages 6
to 8 of the circular to shareholders dated 24 July 2008 for the
scheme of arrangement shareholder meetings held on 19 August 2008,
copies of which are available in electronic format on the Group's
website http://www.signetgroupplc.com/. In the view of the
directors there has been no material change in these factors in
respect of the remaining six months of the financial year, except
that the Proposal has now been approved by shareholders. There have
been no additional related party transactions to those disclosed on
page 115 of the Group's Annual Report & Accounts. Copies of the
half year report may be downloaded as a pdf file from
http://www.signetgroupplc.com/. INVESTOR RELATIONS PROGRAMME Second
quarter results A conference call will take place for all
interested parties today at 9.00 a.m. (EDT) and 2.00 p.m. (BST).
The call will be broadcast live on the Group's website,
http://www.signetgroupplc.com/ European dial-in: +44 (0)20 7138
0840 European 48 hr. replay: +44 (0)20 7806 1970 Access code:
9840702# US dial-in: +1 718 354 1362 US 48 hr. replay: +1 718 354
1112 Access code: 9840702# Goldman Sachs 15th Annual Global Retail
Conference in New York Signet will be presenting at the Goldman
Sachs 15th Annual Global Retail Conference in New York on Thursday
4 September at 11.10 a.m. The presentation, which will also be
webcast on http://www.signetgroupplc.com/, will be given by Terry
Burman, Group Chief Executive, and Walker Boyd, Group Finance
Director. Johnson Rice & Company 7th Annual Consumer Conference
in New Orleans Signet will be attending the Johnson Rice 7th Annual
Consumer Conference in New Orleans on Monday 27 October and Tuesday
28 October. Signet will be represented by Tim Jackson, Investor
Relations Director. Third quarter sales The third quarter sales
performance for the 13 weeks ending 2 November 2008 is expected to
be announced at 2.30 a.m. (EST) and 7.30 a.m. (GMT) on Thursday 6
November. Deutsche Bank Retail Round Table and Dinner in London
Signet will be taking part in the Deutsche Bank Retail Round Table
and Dinner in London on Thursday 6 November. The Group will be
represented by Walker Boyd, Group Finance Director and Tim Jackson,
Investor Relations Director. This release includes statements which
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act 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,
seasonality of the Group's business, financial market risk and
risks and uncertainties relating to the Proposal (including, but
not limited to, risks and uncertainties relating to implementation
of the Proposal, market price, future sales, dilution and
transferability of Signet Jewelers Limited common shares, secondary
listing, changes in tax treatment, takeover protections, and more
extensive US regulation of Signet Jewelers Limited). 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 Annual Report & Accounts for
the year ended 2 February 2008 included as an exhibit to its Report
on Form 6-K furnished with the U.S. Securities and Exchange
Commission on 1 May 2008, the 'Risk factors' section of the scheme
circular pertaining to the Proposal, and other filings with and
submissions to the SEC made by the Company. 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 therein may not be
realised. The Company undertakes no obligation to update or revise
any forward-looking statements to reflect subsequent events or
circumstances, other than as required by applicable law, rule or
regulation. SIGNET GROUP plc Condensed consolidated income
statement (unaudited) for the 26 weeks ended 2 August 2008 13 weeks
13 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended 2
August 4 August 2 August 4 August 2 February 2008 2008 2008 2008
2008 Notes $m $m $m $m $m Sales 2,10 768.9 787.4 1,591.4 1,601.8
3,665.3 Cost of sales (710.9) (713.1) (1,481.6) (1,465.5) (3,264.8)
Gross profit 58.0 74.3 109.8 136.3 400.5 Administrative expenses
(50.8) (37.5) (88.2) (72.8) (158.0) Other operating income 28.8
26.1 58.2 53.4 108.8 Operating profit 2,10 36.0 62.9 79.8 116.9
351.3 Finance income 3 1.3 2.7 3.6 6.1 11.0 Finance expense 3 (7.7)
(7.4) (15.2) (14.0) (28.8) Profit before tax 10 29.6 58.2 68.2
109.0 333.5 Taxation 4 (10.5) (21.5) (24.4) (39.8) (118.3) Profit
for the financial period 19.1 36.7 43.8 69.2 215.2 Earnings per
share - basic 1.2c 2.2c 2.6c 4.1c 12.6c - diluted 6 1.2c 2.1c 2.6c
4.0c 12.6c All of the above relate to continuing activities.
Condensed consolidated balance sheet (unaudited) at 2 August 2008 2
August 4 August 2 February 2008 2007 2008 Notes $m $m $m Assets
Non-current assets Intangible assets 53.4 50.4 52.6 Property, plant
and equipment 511.4 491.0 502.4 Other receivables 41.1 34.1 34.8
Retirement benefit asset - 6.5 - Deferred tax assets 21.5 29.0 19.7
627.4 611.0 609.5 Current assets Inventories 1,431.3 1,366.3
1,445.5 Trade and other receivables 834.1 801.8 927.5 Cash and cash
equivalents 66.9 51.8 41.7 2,332.3 2,219.9 2,414.7 Total assets
2,959.7 2,830.9 3,024.2 Liabilities Current liabilities Borrowings
due in less than one year (120.2) (26.6) (36.3) Trade and other
payables (313.9) (314.3) (357.5) Deferred income (106.3) (102.5)
(125.3) Current tax (59.3) (81.3) (79.5) (599.7) (524.7) (598.6)
Non-current liabilities Borrowings due in more than one year
(380.0) (380.0) (380.0) Other payables (92.1) (79.2) (85.3)
Deferred income (137.7) (134.6) (139.0) Provisions (9.1) (10.2)
(9.6) Retirement benefit obligation (4.0) - (5.6) (622.9) (604.0)
(619.5) Total liabilities (1,222.6) (1,128.7) (1,218.1) Net assets
1,737.1 1,702.2 1,806.1 Equity Capital and reserves attributable to
equity shareholders Called up share capital 15.4 15.4 15.4 Share
premium 8 140.2 138.4 140.2 Other reserves 8 235.2 235.2 235.2
Retained earnings 8 1,346.3 1,313.2 1,415.3 Total equity 1,737.1
1,702.2 1,806.1 Condensed consolidated cash flow statement
(unaudited) for the 26 weeks ended 2 August 2008 13 weeks 13 weeks
26 weeks 26 weeks 52 weeks ended ended ended ended ended 2 August 4
August 2 August 4 August 2 February 2008 2007 2008 2007 2008 $m $m
$m $m $m Cash flows from operating activities: Profit before tax
29.6 58.2 68.2 109.0 333.5 Adjustments for: Finance income (1.3)
(2.7) (3.6) (6.1) (11.0) Finance expense 7.7 7.4 15.2 14.0 28.8
Depreciation of property, plant and equipment 25.5 25.8 52.6 49.8
109.4 Amortisation of intangible assets 1.5 1.1 2.8 2.3 4.7
Share-based payment expense 1.9 2.0 3.7 4.0 0.4 Other non-cash
movements 1.7 0.9 (2.2) (0.5) (1.5) Loss on disposal of property,
plant and equipment 0.4 - 0.6 - 1.4 Operating cash flows before
movement in working capital 67.0 92.7 137.3 172.5 465.7
Decrease/(increase) in inventories 58.1 43.6 9.4 (5.4) (96.8)
Decrease/(increase) in trade and other receivables 18.8 (13.3) 81.7
59.7 (60.7) Decrease in payables and deferred income (20.3) (13.1)
(57.7) (81.2) (13.5) Cash generated from operations 123.6 109.9
170.7 145.6 294.7 Interest paid (14.3) (13.1) (15.3) (13.6) (29.8)
Taxation paid (17.1) (35.8) (42.9) (75.3) (128.5) Net cash from
operating activities 92.2 61.0 112.5 56.7 136.4 Investing
activities: Interest received 0.8 0.6 2.5 4.0 6.3 Purchase of
property, plant and equipment (38.0) (27.8) (63.1) (51.9) (129.1)
Purchase of intangible assets (2.3) (2.0) (3.6) (6.2) (11.3)
Proceeds from sale of property, plant and equipment - - 1.0 - 1.0
Cash flows from investing activities (39.5) (29.2) (63.2) (54.1)
(133.1) Financing activities: Dividends paid (107.4) (107.6)
(107.4) (107.6) (123.9) Proceeds from issue of shares - 2.3 - 5.5
6.0 Purchase of own shares - - - (29.0) (29.0) Increase in
borrowings due in less than one year 94.1 15.5 83.7 22.0 31.1 Cash
flows from financing activities (13.3) (89.8) (23.7) (109.1)
(115.8) Reconciliation of movement in cash and cash equivalents:
Cash and cash equivalents at beginning of period 29.2 105.0 41.7
152.3 152.3 Increase/(decrease) in cash and cash equivalents 39.4
(58.0) 25.6 (106.5) (112.5) Exchange adjustments (1.7) 4.8 (0.4)
6.0 1.9 Closing cash and cash equivalents 66.9 51.8 66.9 51.8 41.7
Reconciliation of cash flows to movement in net debt:(1) Net debt
at beginning of period (377.0) (286.2) (374.6) (233.2) (233.2)
Increase/(decrease) in cash and cash equivalents 39.4 (58.0) 25.6
(106.5) (112.5) Increase in borrowings (94.1) (15.5) (83.7) (22.0)
(31.1) Exchange adjustments (1.6) 4.9 (0.6) 6.9 2.2 Closing net
debt (433.3) (354.8) (433.3) (354.8) (374.6) (1) Net debt
represents cash and cash equivalents less borrowings due in less
than one year and borrowings due in more than one year. Condensed
consolidated statement of recognised income and expense (unaudited)
for the 26 weeks ended 2 August 2008 13 weeks 13 weeks 26 weeks 26
weeks 52 weeks ended ended ended ended ended 2 August 4 August 2
August 4 August 2 February 2008 2007 2008 2007 2008 $m $m $m $m $m
Exchange differences on translation of foreign operations (2.7)
13.5 - 18.8 (0.1) Effective portion of changes in value of cash
flow hedges 5.7 (8.4) (4.0) (5.1) 14.1 Transfer to initial carrying
value of inventory from cash flow hedges (3.3) (0.1) (8.7) (1.7)
(10.2) Actuarial gain on retirement benefit scheme - - - - (15.0)
Tax on items recognised in equity (0.7) 2.5 3.6 2.0 3.7 Net
(expense)/income recognised directly in equity (1.0) 7.5 (9.1) 14.0
(7.5) Profit for the financial period 19.1 36.7 43.8 69.2 215.2
Total recognised income and expense attributable to shareholders
18.1 44.2 34.7 83.2 207.7 Notes to the condensed consolidated
financial statements (unaudited) for the 26 weeks ended 2 August
2008 1. Basis of preparation This condensed set of financial
statements has been prepared in accordance with the requirements of
IAS 34 'Interim Financial Reporting' as adopted by the EU. As
required by the Disclosure and Transparency Rules ("the DTR") of
the UK's Financial Services Authority ("the UK FSA"), the condensed
set of financial statements has been prepared applying the
accounting policies and presentation that were applied in the
preparation of the Company's published consolidated financial
statements for the 52 week period ended 2 February 2008, which were
prepared in accordance with IFRS as adopted 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
2 February 2008 are not the Company's statutory accounts for that
period. Those accounts have been reported on by the Company's
auditors and have been delivered to the Registrar of Companies. The
report of the auditors was (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report, and (iii) did not
contain a statement under section 237(2) or (3) of the Companies
Act 1985. 2. Segment information 13 weeks 13 weeks 26 weeks 26
weeks 52 weeks ended ended ended ended ended 2 August 4 August 2
August 4 August 2 February 2008 2007 2008 2007 2008 $m $m $m $m $m
Sales by origin and destination UK, Channel Islands & Republic
of Ireland 193.3 202.8 384.7 384.9 959.6 US 575.6 584.6 1,206.7
1,216.9 2,705.7 768.9 787.4 1,591.4 1,601.8 3,665.3 Operating
(loss)/profit UK, Channel Islands & Republic of Ireland -
Trading 1.8 1.3 4.5 (0.6) 105.1 - Group central costs: - underlying
(4.6) (4.8) (9.0) (8.8) (16.0) - re-listing (10.5) - (10.5) - -
(13.3) (3.5) (15.0) (9.4) 89.1 US 49.3 66.4 94.8 126.3 262.2 36.0
62.9 79.8 116.9 351.3 The Group's results derive from one business
segment - the retailing of jewellery, watches and associated
services. 3. Net financing costs 13 weeks 13 weeks 26 weeks 26
weeks 52 weeks ended ended ended ended ended 2 August 4 August 2
August 4 August 2 February 2008 2007 2008 2007 2008 $m $m $m $m $m
Interest receivable 0.8 1.6 2.5 4.0 6.2 Defined benefit pension
scheme: - expected return on scheme assets 4.2 4.4 8.6 8.6 18.3 -
interest on pension liabilities (3.7) (3.3) (7.5) (6.5) (13.5)
Finance income 1.3 2.7 3.6 6.1 11.0 Finance expense (7.7) (7.4)
(15.2) (14.0) (28.8) (6.4) (4.7) (11.6) (7.9) (17.8) Notes to the
condensed consolidated financial statements (unaudited) for the 26
weeks ended 2 August 2008 4. Taxation The net taxation charges in
the income statements for the 13 weeks and 26 weeks ended 2 August
2008 have been based on the anticipated effective taxation rate for
the 52 weeks ending 31 January 2009. 5. Translation differences The
exchange rates used for the translation of UK pound sterling
transactions and balances in these interim statements are as
follows: 2 August 4 August 2 February 2008 2007 2008 Income
statement (average rate) 1.98 1.99 2.00 Balance sheet (closing
rate) 1.97 2.04 1.97 The effect of restating the balance sheet at 4
August 2007 to the exchange rates ruling at 2 August 2008 would be
to increase net debt by $0.3 million to $(355.1) million. 6.
Earnings per share 13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended 2 August 4 August 2 August 4 August 2
February 2008 2007 2008 2007 2008 $m $m $m $m $m Profit
attributable to shareholders 19.1 36.7 43.8 69.2 215.2 Weighted
average number of shares in issue (million) 1,704.0 1,702.4 1,703.9
1,703.0 1,703.8 Dilutive effect of share options (million) 0.8 7.7
1.0 9.4 3.3 Diluted weighted average number of shares (million)
1,704.8 1,710.1 1,704.9 1,712.4 1,707.1 Earnings per share - basic
1.2c 2.2c 2.6c 4.1c 12.6c - diluted 1.2c 2.1c 2.6c 4.0c 12.6c
Earnings per ADS - basic 11.3c 21.5c 25.7c 40.6c 126.3c - diluted
11.3c 21.4c 25.7c 40.4c 126.1c The number of ordinary and deferred
shares in issue at 2 August 2008 was 1,705,541,827 and 50,000
respectively (4 August 2007: 1,705,339,904 ordinary and 50,000
deferred shares, 2 February 2008: 1,705,510,466 ordinary and 50,000
deferred shares). 7. Seasonality The Group's business is highly
seasonal with a very significant proportion of its sales and
operating profit generated during its fourth quarter, which
includes the Christmas season. The Group expects to continue to
experience a seasonal fluctuation in sales and profit. Notes to the
condensed consolidated financial statements (unaudited) for the 26
weeks ended 2 August 2008 8. Share premium and reserves 26 weeks
ended 2 August 2008 Other reserves Retained earnings Purchase
Capital Special of trans- Retained Total Share redemp re- own
Hedging tion re- premium tion serves shares reserve reserve serves
$m $m $m $m $m $m $m $m Balance at 2 February 2008 140.2 0.4 234.8
(10.8) 8.2 10.0 1,407.9 1,790.7 Recognised income and expense: -
profit for the financial period - - - - - - 43.8 43.8 - cashflow
hedges (net) - - - - (9.1) - - (9.1) - translation differences - -
- - - - - - Dividends - - - - - - (107.4) (107.4) Equity-settled
transactions - - - - - - 3.7 3.7 Balance at 2 August 2008 140.2 0.4
234.8 (10.8)(0.9) 10.0 1,348.0 1,721.7 9. Dividend A dividend of
0.96 cent per share will be paid on 7 November 2008 to shareholders
on the register of members at the close of business on 26 September
2008. The US dollar to pound sterling rate used to convert the 0.96
cent dividend per share for payment to shareholders who elect to
receive a pound sterling dividend will be the rate as derived from
Reuters at 4.00pm on the record date of 26 September 2008.
Shareholders wishing to change the currency in which they receive
the dividend should contact the Company's registrars. 10. Impact of
constant exchange rates and re-listing costs 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, and net debt at constant
exchange rates, including a reconciliation to the Group's GAAP
results, is analysed below. 26 weeks ended 2 August 2008 26 weeks
26 weeks Growth at Impact of At constant Growth at ended ended
actual exchange exchange constant 2 August 4 August exchange rate
rates exchange 2008 2007 rates movement (non-GAAP) rates (non-GAAP)
$m $m % $m $m % Sales by origin and destination UK, Channel Islands
& Republic of Ireland 384.7 384.9 (0.1) (1.9) 383.0 0.4 US
1,206.7 1,216.9 (0.8) - 1,216.9 (0.8) 1,591.4 1,601.8 (0.6) (1.9)
1,599.9 (0.5) Operating (loss)/profit UK, Channel Islands &
Republic of Ireland - Trading 4.5 (0.6) n/a - (0.6) n/a - Group
central costs: - underlying (9.0) (8.8) (2.3) - (8.8) (2.3) -
re-listing (10.5) - n/a - - n/a (15.0) (9.4) (59.6) - (9.4) (59.6)
US 94.8 126.3 (24.9) - 126.3 (24.9) 79.8 116.9 (31.7) - 116.9
(31.7) Notes to the condensed consolidated financial statements
(unaudited) for the 26 weeks ended 2 August 2008 10. Impact of
constant exchange rates and re-listing costs (continued) At 2
August 2008 2 August 4 August Impact of At constant 2008 2007
exchange exchange rate movement rates (non-GAAP) $m $m $m $m Net
debt (433.3) (354.8) (0.3) (355.1) The underlying performance of
the business excluding the impact of re- listing costs is detailed
below. 26 weeks ended 2 August 2008 Impact of Excluding 26 weeks 26
weeks Movement re- re- Movement ended ended including listing
listing excluding 2 August 4 August re-listing costs costs
re-listing 2008 2007 costs 2008 2008 costs $m $m % $m $m %
Operating profit 79.8 116.9 (31.7) 10.5 90.3 (22.8) Profit before
tax 68.2 109.0 (37.4) 10.5 78.7 (27.8) Diluted earnings per share
2.6c 4.0c (35.0) 0.6c 3.2c (20.0) Responsibility statement of the
directors in respect of the half year report We confirm that to the
best of our knowledge: -- the condensed set of financial statements
has been prepared in accordance with IAS 34 'Interim Financial
Reporting' as adopted by the EU; -- the interim management report
includes a fair review of the information required by: (a) DTR
4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year;
and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the Company
during that period; and any changes in the related party
transactions described in the last annual report that could do so.
Terry Burman Group Chief Executive Walker Boyd Group Finance
Director 3 September 2008 Independent review report by KPMG Audit
Plc to Signet Group plc Introduction We have been instructed by the
Company to review the financial information set out on pages 7 to
14 in the half year report for the 26 weeks ended 2 August 2008
which comprises a condensed consolidated income statement, a
condensed consolidated balance sheet, a condensed consolidated cash
flow statement, a condensed consolidated statement of recognised
income and expense and the related explanatory notes. We have read
the other information contained in the half year 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 with the terms
of our engagement to assist the Company in meeting the requirements
of the Disclosure and Transparency Rules ("the DTR") of the UK's
Financial Services Authority ("the UK FSA"). 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 half year 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 half year report in accordance with
the DTR of the UK FSA. As disclosed in note 1, the annual financial
statements of the Company are prepared in accordance with IFRS as
adopted by the EU. The financial information included in this half
year report has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the EU . Our responsibility Our
responsibility is to express to the Company a conclusion on the
financial information in the half year report based on our review.
Scope of Review We conducted our review in accordance with the
International Standard on Review Engagements (UK and Ireland) 2410
'Review of interim financial information performed by the
independent auditor of the entity' issued by the Auditing Practices
Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion. Review conclusion Based on our
review, nothing has come to our attention that causes us to believe
that the financial information in the half year report for the 26
weeks ended 2 August 2008 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the
DTR of the UK FSA. KPMG Audit Plc Chartered Accountants London UK 3
September 2008 EXHIBIT 1 Unaudited condensed consolidated income
statements under US GAAP 13 weeks 13 weeks 26 weeks 26 weeks ended
ended ended ended 2 August 4 August 2 August 4 August 2008 2007
2008 2007 $m $m $m $m Sales 768.9 787.4 1,591.4 1,601.8 Cost of
sales (519.8) (541.3) (1,064.6) (1,081.9) Gross margin 249.1 246.1
526.8 519.9 Selling, general and administrative expenses (240.4)
(203.7) (502.1) (449.6) Other operating income, net 28.8 26.1 58.7
53.4 Operating income 37.5 68.5 83.4 123.7 Interest income 0.8 1.6
2.5 4.0 Interest expense (7.7) (7.4) (15.2) (14.0) Income before
income taxes 30.6 62.7 70.7 113.7 Income taxes (10.9) (21.7) (25.3)
(39.4) Net income 19.7 41.0 45.4 74.3 Earnings per share - basic
1.2c 2.4c 2.7c 4.4c - diluted 1.2c 2.4c 2.7c 4.4c All of the above
relate to continuing activities attributable to equity
shareholders. Unaudited condensed consolidated balance sheets under
US GAAP 2 August 4 August 2 February 2008 2007 2008 $m $m $m Assets
Current assets: Cash and cash equivalents 66.9 51.8 41.7 Accounts
receivable, net 760.8 723.0 848.2 Other receivables 27.0 35.7 40.5
Other current assets 46.3 43.1 38.8 Deferred tax assets - 1.6 -
Inventories 1,454.5 1,368.3 1,453.6 Total current assets 2,355.5
2,223.5 2,422.8 Non-current assets: Property, plant and equipment,
net of accumulated depreciation of $695.4 million, $601.8 million
and $642.8 million, respectively. 498.7 477.1 489.2 Goodwill 556.0
561.2 556.0 Other intangible assets, net 22.8 19.8 22.0 Other
assets 41.1 34.1 34.8 Retirement benefit asset - 6.5 - Deferred tax
assets 74.8 58.6 74.6 Total assets 3,548.9 3,380.8 3,599.4
Liabilities and Shareholders' equity: Current liabilities: Loans
and overdrafts 120.2 26.6 36.3 Accounts payable 82.5 85.7 89.3
Accrued expenses and other current liabilities 231.4 228.8 268.2
Deferred revenue 106.3 102.5 125.3 Deferred tax liabilities 53.1
27.8 47.9 Income taxes payable 59.3 81.3 79.5 Total current
liabilities 652.8 552.7 646.5 Non-current liabilities: Long-term
debt 380.0 380.0 380.0 Other liabilities 112.6 105.4 96.4 Deferred
revenue 137.7 134.6 149.7 Retirement benefit obligation 4.0 - 5.6
Total liabilities 1,287.1 1,172.7 1,278.2 Shareholders' equity:
Common stock of 0.9c par value: authorised 5,929.9 million shares,
1,705.5 million shares issued and outstanding (4 August 2007:
1,705.3 million shares issued and shares outstanding; 2008: 1,705.5
million shares issued and outstanding) 15.3 15.3 15.3 Deferred
stock, �1 par value: authorised 50,000, issued and outstanding
50,000 shares 0.1 0.1 0.1 Additional paid-in capital 163.5 157.7
162.5 Other reserves 235.2 235.2 235.2 Retained earnings 1,856.4
1,791.7 1,918.4 Treasury stock - 1.7 million shares, 2.0 million
shares and 1.7 million shares, respectively (10.8) (11.4) (10.8)
Accumulated other comprehensive income 2.1 19.5 0.5 Total
liabilities and shareholders' equity 3,548.9 3,380.8 3,599.4
Unaudited condensed consolidated statements of cash flows under US
GAAP 13 weeks 13 weeks 26 weeks 26 weeks ended ended ended ended 2
August 4 August 2 August 4 August 2008 2007 2008 2007 $m $m $m $m
Cash flows from operating activities: Net income 19.7 41.0 45.4
74.3 Adjustments to reconcile net income to cash flows provided by
operations: Depreciation of property, plant and equipment 25.5 25.8
52.6 49.8 Amortisation of other intangible assets 1.5 1.1 2.8 2.3
Pension expense 0.3 (0.4) 0.5 (0.8) Stock-based payments expense
0.4 (2.9) 0.7 (1.2) Deferred taxation - - (1.5) - Other non-cash
movements 1.4 0.6 (2.8) (1.3) Loss on disposal of property, plant
and equipment 0.4 - 0.1 - Changes in operating assets and
liabilities: Decrease/(increase) in inventories 58.1 43.6 9.4 (5.4)
Decrease in trade receivables 24.0 11.6 86.0 69.7
(Increase)/decrease in other receivables (5.9) (9.4) (7.0) 0.5
Decrease/(increase) in other current assets 0.7 (15.5) 2.7 (10.5)
Decrease in accounts payable (21.6) (19.7) (12.8) (31.4) Decrease
in accrued expense and other liabilities (5.4) (0.1) (45.0) (49.4)
Decrease in income taxes payable (6.1) (14.1) (16.1) (35.9) Net
cash provided by operating activities 93.0 61.6 115.0 60.7
Investing activities: Purchase of property, plant and equipment
(38.0) (27.8) (63.1) (51.9) Purchase of other intangible assets
(2.3) (2.0) (3.6) (6.2) Proceeds from sale of property, plant and
equipment - - 1.0 - Net cash flows used in investing activities
(40.3) (29.8) (65.7) (58.1) Financing activities: Dividends paid
(107.4) (107.6) (107.4) (107.6) Proceeds from issue of stock - 2.3
- 5.5 Purchase of own stock - - - (29.0) Proceeds from short-term
borrowings 94.1 15.5 83.7 22.0 Net cash flows used in financing
activities (13.3) (89.8) (23.7) (109.1) Cash and cash equivalents
at beginning of period 29.2 105.0 41.7 152.3 Increase/(decrease) in
cash and cash equivalents 39.4 (58.0) 25.6 (106.5) Effect of
exchange rate changes on cash and cash equivalents (1.7) 4.8 (0.4)
6.0 Cash and cash equivalents at end of period 66.9 51.8 66.9 51.8
Reconciliation of net income and shareholders' funds from IFRS to
US GAAP Effect on profit for the financial period of differences
between IFRS and US GAAP 13 weeks 13 weeks 26 weeks 26 weeks ended
ended ended ended 2 August 4 August 2 August 4 August 2008 2007
2008 2007 $m $m $m $m Profit for the financial period in accordance
with IFRS 19.1 36.7 43.8 69.2 Pensions (0.8) (0.7) (1.6) (1.3) Sale
and leaseback transactions 0.3 0.4 0.6 0.8 Share-based payment 1.5
4.8 3.0 5.2 Profit on disposal of revalued asset - - 0.5 - Taxation
on reconciling items (0.4) (0.2) (0.9) 0.4 Retained profit
attributable to shareholders in accordance with US GAAP 19.7 41.0
45.4 74.3 Effect on shareholders' funds of differences between IFRS
and US GAAP 2 August 4 August 2 February 2008 2007 2008 $m $m $m
Shareholders' funds in accordance with IFRS 1,737.1 1,702.2 1,806.1
Goodwill in respect of acquisitions (gross) 876.1 884.4 876.1
Accumulated goodwill amortisation (350.7) (354.0) (350.7) Sale and
leaseback transactions (10.2) (12.0) (10.7) Depreciation of
properties (4.5) (5.1) (4.7) Revaluation of properties (8.2) (8.8)
(8.5) Share-based payment (1.2) (4.0) (1.5) Commodity derivatives
23.2 2.0 8.1 Taxation on reconciling items 0.2 3.4 7.0 US GAAP
adjustments 524.7 505.9 515.1 Shareholders' funds in accordance
with US GAAP 2,261.8 2,208.1 2,321.2 A narrative description of the
reconciling items is disclosed in the annual report for the 52
weeks ended 2 February 2008. DATASOURCE: Signet Group plc CONTACT:
Enquiries: Terry Burman, Group Chief Executive, +1-212-889- 4350,
Walker Boyd, Group Finance Director, +1-212-889-4350; or Press:
Jonathan Glass, Brunswick, +44 (0) 20 7404 5959, Wendel Verbeek,
Brunswick, +44 (0) 20 7404 5959, John Dudzinsky, Taylor Rafferty,
+1-212-889-4350 Web site: http://www.signetgroupplc.com/
Copyright