Final Results
March 26 2003 - 7:00AM
UK Regulatory
RNS Number:2046J
Signet Group PLC
26 March 2003
Embargoed until 12.00 Noon (GMT) 26 March 2003
Signet Group plc (LSE: SIG, Nasdaq NMS: SIGY)
PRELIMINARY RESULTS YEAR ENDED 1 FEBRUARY 2003
Signet Continues Profits Growth
Final Dividend Up 20%
* Group profit before tax: #199.7 million (2001/02: #182.8 million) up 9%*
* Group sales: #1,608.0 million (2001/02: #1,578.1 million) up 2%*
* Group like for like sales up 5%
* Earnings per share: 7.5p (2001/02: 7.1p) up 6%*
* Proposed final dividend: 1.80p (2001/02: 1.50p) up 20%
* Gearing down from 30% at 2 February 2002 to 20%
*2001/02 was a 53 week year. On a comparable 52 week basis at constant exchange
rates Group profit before tax increased by 16%, sales by 8% and earnings per
share by 12%.
Terry Burman, Group Chief Executive, commented: "The business did well to
achieve a record level of profit in 2002/03 which was a challenging year in
respect of trading conditions and adverse exchange rate movements. The Group's
strong cash flow and low level of gearing has enabled the Board to recommend a
20% increase in the final dividend after investing #121 million in fixed and
working capital during the year.
The US business had another good year increasing underlying operating profit by
16%. The business again outperformed the speciality jewellery sector and gained
market share. The UK business also performed well increasing underlying
operating profit by 13%; this was achieved against the background of demanding
sales comparatives and a marked slowing in the growth of consumer expenditure in
the last quarter.
Overall the Group has had a generally satisfactory start to the year. Both the
US and the UK businesses had strong Valentine's Day performances. Subsequent
trading has been affected by inclement weather in the US, the timing of Easter
and the geopolitical situation."
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
Tim Grey, Brunswick +44 (0) 20 7404 5959
Signet operated 1,660 speciality retail jewellery stores at 1 February 2003;
these included 1,050 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 610 stores in the UK, where the Group trades as "H.Samuel",
"Ernest Jones" and "Leslie Davis".
Chairman's Statement
Results
In the 52 weeks to 1 February 2003 the Group built further on the growth trend
of the last eight years. Profit before tax rose to #199.7 million compared to
#182.8 million in the 53 week period last year. This represented a 16.2%
increase on a comparable 52 week basis at constant exchange rates. Earnings per
share rose from 7.1p to 7.5p, the tax rate having increased as anticipated from
34.5% to 35.5%. Like for like sales rose by 5.3% and total sales grew to
#1,608.0 million (2001/02 53 weeks: #1,578.1 million), a 7.9% increase on a
comparable 52 week basis at constant exchange rates.
Net debt was reduced to #140.1 million at the year end (2 February 2002: #201.7
million), #27.9 million of the improvement being accounted for by exchange
translation. Gearing fell to 20.1% (2 February 2002: 29.7%). Interest cover
(operating profit divided by net interest cost) was a very comfortable 13.1
times.
Overall these were strong results given comparison with a 53 week period, a
weaker US dollar and a softening in the trading environment on both sides of the
Atlantic in the last quarter.
The US business did extremely well in a challenging retail market. The division
continued to implement its proven strategy and again outperformed the speciality
jewellery sector. The UK division also had a very encouraging outcome. Like
for like sales growth outperformed the general retail market, with Ernest Jones
achieving a particularly good result.
Dividend
The Board is pleased to recommend a 20% increase in the final dividend to 1.80p
per share (2001/02: 1.50p), the total for the year being 2.110p per share (2001/
02: 1.789p). The full year dividend cover was 3.6 times (2001/02: 3.9 times).
Future dividend policy will continue to take account of earnings, cash flow,
gearing and the needs of the business.
Current Trading
Overall the Group has had a generally satisfactory start to the year. Both the
US and the UK businesses had strong Valentine's Day performances. Subsequent
trading has been affected by inclement weather in the US, the timing of Easter
and the geopolitical situation.
Chief Executive's Review
Group Summary
Group like for like sales increased by 5.3%, with both the US and UK businesses
exceeding the performance of the general retail sector in their respective
markets. Group operating profit rose to #216.2 million from #200.7 million, an
increase of 7.7% (14.8% on a comparable 52 week basis at constant exchange
rates). The operating margin increased to 13.4% (2001/02: 12.7%) and the return
on capital employed ("ROCE") to 23.8% (2001/02: 23.3%). The year saw a further
strengthening of the balance sheet after investment in fixed and working capital
of #121.3 million.
The US business continued to build on its competitive strengths in a fluctuating
and uncertain trading environment.
Operating profit rose from #145.1 million to #155.2 million, an increase of 7.0%
(15.6% increase on a 52 week basis at constant exchange rates). Consolidation
within the US speciality jewellery sector continues and the US division's share
of the speciality market is estimated to have risen over the last five years to
c.6.7% from c.4.7%. Like for like sales have risen at a compound annual growth
rate of 6.6% over the same period. During last year 6% was added to selling
space, with the increase over the last five years being some 64%. A core
objective of the US business is to increase selling space by 6% to 8% per annum,
the majority of this being related to expansion of the Jared concept. In the
longer term the potential is for over 200 Jared stores generating sales of over
$1 billion. Space growth and improved store productivity should contribute
further to leveraging of both central overhead costs and marketing expenditure.
Continued enhancement of customer service is another key aim. It is planned to
achieve this through the implementation of leading edge operating systems and
procedures, which should result in staff spending less time on administrative
functions. New merchandising initiatives, including branding programmes,
continue to be identified, tested and developed. A continued shift to broadcast
advertising is increasing brand name awareness and driving footfall.
The UK business took a further significant step forward in its strategy to
increase store productivity and make existing space work harder. Operating
profit rose by 10.4% (13.2% on a comparable 52 week basis). Like for like sales
in the year increased by 5.2%, the compound annual growth rate over the last
five years being 5.3%. Average sales per store during the same period increased
from #613,000 to #747,000. The drive to gain market share in diamonds, which is
a core objective of the division's strategy, continues to show considerable
success. The compound annual growth rate of the diamond category over the last
five years was 14.4% per annum, a performance which was considerably ahead of
the 8.9% recorded by the overall diamond market. A range of initiatives being
implemented in merchandising, store operations, marketing and real estate will
continue to assist the business in achieving its strategic targets, as will the
continuing transfer of best practice from the US division.
US Performance Review (71% of Group sales)
Details of the US division's performance are set out below:
2002/03 2001/02 Change Like for like
change
#m #m % %
Sales 1,134.4 1,126.0 +0.7(a) +5.4
Operating profit 155.2 145.1 +7.0(b)
Operating margin 13.7% 12.9%
ROCE 21.5% 20.4%
(a) On a comparable 52 week basis and at constant exchange rates US total
sales increased by 8.6% (2.2% at actual exchange rates).
(b) On a comparable 52 week basis and at constant exchange rates US operating
profit increased by 15.6% (8.8% at actual exchange rates).
Costs, gross margin and inventories remained under tight control. Significant
benefit was obtained from a number of management initiatives, including the
development of the Leo Diamond(R) and three-stone diamond jewellery ranges,
increased levels of staff training, expansion of television advertising and
continued investment in real estate.
The increase in operating margin and ROCE reflected leverage from like for like
sales growth which more than offset the adverse impact of immature store space.
The gross margin rate was slightly down on last year's level due to anticipated
changes in sales mix. The increase in the price of gold bullion had limited
effect on the year but could have a greater impact in the current year. The
proportion of sales through the in-house credit card decreased to 49.5% (2001/
02: 50.4%). The bad debt charge was at the bottom of the range of the last six
years at 3.0% of total sales (2001/02: 3.2%). This was before a $2.2 million
one-off benefit from a better than anticipated performance of the residue of the
acquired Marks & Morgan receivables portfolio.
Customers responded positively to the merchandise programmes, many of which have
been developed and tested over a number of years. An example was the Leo
Diamond range where the Group has exclusive rights. Leo Diamonds have more
brilliance than normally cut stones of similar size and quality. The range was
first tested in Jared stores during Christmas 2000, rolled out to 300 mall
stores in 2001, and by Christmas 2002 it was in all the division's stores.
Three-stone diamond merchandise is another example of a range that has been
successfully developed over a number of years.
Staff training was undertaken at a record level in 2002/03, with emphasis on
improving product knowledge and selling skills. A longer term programme has
also been introduced to reduce and simplify administrative functions carried out
in the stores, thereby allowing sales staff more time to serve customers. This
programme has already contributed some improvement in stock losses.
Marketing events and promotional activity proved to be particularly successful
during critical selling periods such as Valentine's Day, Mother's Day and
Christmas. Broadcast advertising was further extended and Kay television
advertising impressions were increased by 16% over the Christmas period. The
romance and appreciation based advertising theme, "Every kiss begins with Kay",
once more proved successful in heightening name recognition. The Leo Diamond
was featured strongly in this advertising. The annual gross marketing spend
amounted to 6.4% of sales (2001/02: 6.3%), the increase reflecting growth in the
number of Jared stores where the advertising spend is higher than for mall
stores.
Jared now has sales of over $250 million and its like for like sales performance
was significantly ahead of that of the rest of the division. The Jared concept
is the primary vehicle for US space growth and in the period a further 12 stores
were opened, bringing the total up to 67 such stores at the end of the period.
Jared television advertising was expanded from three markets in 2001 to ten
markets over Christmas 2002 and will be developed further in 2003. An
initiative to increase sales of luxury watches in Jared stores was also
launched.
In 2002/03 total fixed capital investment in the US business was #33.1 million
(2001/02: #41.0 million). The enhancement and expansion of the real estate
portfolio continued, although at the lower end of the planned range. This
reflected the tightened investment criteria in place to take account of the
uncertain trading environment.
Details of recent investment in the store portfolio are set out below:
Number of stores
___________ ___________ __________ __________
2002/03 2001/02 2000/01 1999/00
___________ ___________ __________ __________
Store refurbishments and relocations 71 91 99 57
New mall stores 36 41 40 41
New Jared stores 12 12 15 13
Fixed capital expenditure #28m #37m #40m #23m
Total investment(a) #63m #68m #72m #50m
(a) Fixed and working capital investment in new space and refurbishments/
relocations.
The change in store numbers by chain is shown in the following table:
Total Kay Regional Jared
_________ _________ _________ _________
2 February 2002 1,025 667 303 55
Openings 48 22 14 12
Closures (23) (13) (10) -
_________ _________ _________ _________
1 February 2003 1,050 676 307 67
_________ _________ _________ _________
In 2003/04 it is planned to refurbish or relocate approximately 90 stores and to
increase selling space by c.7%. A further 12 new Jared stores should account
for some 65% of the increase, the remainder comprising up to 30 net mall store
openings and a trial of up to 10 Kay stores in outdoor centres.
UK Performance Review (29% of Group sales)
Details of the UK division's performance are set out below:
2002/03 2001/02 Change Like for like
change
#m #m % %
Sales: H.Samuel 279.1 277.3 +0.6 +2.6
Ernest Jones 188.0 168.5 +11.6 +9.4
Other 6.5 6.3
____________ ____________
Total 473.6 452.1 +4.8(a) +5.2
____________ ____________
Operating profit 67.0 60.7 +10.4(b)
Operating margin 14.1% 13.4%
ROCE 38.0% 39.4%
(a) On a comparable 52 week basis UK total sales increased by 6.2%.
(b) On a comparable 52 week basis UK operating profit increased by 13.2%.
The strategy to improve store productivity by increasing the average transaction
value again proved successful, despite an increasingly challenging trading
environment. Benefit was gained from a range of management initiatives. The
initial phase of a trial of new store designs was expanded.
The gross margin rate was slightly ahead of last year. Increased store
productivity contributed to the improved operating margin while the decrease in
ROCE reflected the benefit of the 53rd week in 2001/02 and higher investment in
diamond inventory. H.Samuel average sales per store rose by 1.5% to #677,000
(2001/02: #667,000) and Ernest Jones (including Leslie Davis) by 12.1% to
#1,030,000 (2001/02: #919,000).
The average retail price of items sold increased by 7.1% to #32.91 (2001/02:
#30.74) in H.Samuel and by 9.3% to #130.27 (2001/02: #119.14) in Ernest Jones.
Diamond assortments were further enhanced, with the Leo Diamond range being
rolled out in Ernest Jones and the Forever Diamonds being tested in H.Samuel.
Diamond sales again achieved an above average increase and outpaced the growth
in the UK diamond market; they now account for 25% of the sales mix (18% in
H.Samuel and 35% in Ernest Jones). This represents a significant increase on
five years ago when diamonds accounted for 16% of the mix (14% in H.Samuel and
28% in Ernest Jones).
Staff training remains a priority, with focus on improving product knowledge,
particularly in respect of diamonds. During the year increased training support
was given to store managers and a more structured training programme introduced.
Progress in improving customer service was monitored through a mystery shopper
programme.
In 2002/03 new store formats were tested in 17 locations (15 H.Samuel and 2
Ernest Jones). The new designs enable improved interaction with the customer
and better presentation of the diamond range by replacing the former window
displays with staffed display counters. In 2003/04 the trial will be extended,
with the planned new and refurbished stores utilising the new formats.
Fixed capital investment, principally in the store portfolio, amounted to #16.4
million (2001/02: #18.8 million). Four new H.Samuel stores were opened and
eight closed. Ernest Jones saw eight openings and no closures. At the year end
there were 610 stores (418 H.Samuel and 192 Ernest Jones). In total 42 stores
were refurbished in the period compared with 93 in 2001/02. Capital expenditure
was at a similar level to last year as more large key stores were refurbished,
including 13 under the new format. Some 32 further stores are scheduled for
refurbishment in 2003/04. Details of recent investment in the store portfolio
are set out below:
Number of stores
________ ________ ________ ________
2002/03 2001/02 2000/01 1999/00
________ ________ ________ ________
Store refurbishments and relocations 42 93 24 53
New H.Samuel stores 4 10 9 7
New Ernest Jones stores 8 9 3 4
Fixed capital expenditure #14m #15m #6m #7m
Financial Review
Operating Profit and ROCE
Group operating profit increased by 7.7% to #216.2 million (2001/02: #200.7
million), up 14.8% on a comparable 52 week basis. Operating profit to sales
ratio was 13.4% (2001/02: 12.7%) and ROCE was 23.8% (2001/02: 23.3%). Capital
employed is based on the average of the monthly balance sheets and at 1 February
2003 included US in-house credit card debtors amounting to #299.2 million (2
February 2002: #327.0 million).
Net income
Net income for the year increased by 7.7% to #128.9 million (2001/02: #119.7
million).
Group costs
Group central costs amounted to #6.0 million, including a property provision of
#0.5 million (2001/02: #5.1 million which did not include any property related
item).
Net interest payable
Net interest payable and similar charges amounted to #16.5 million (2001/02:
#17.9 million, at constant exchange rates #16.8 million).
Taxation
The charge of #70.8 million (2001/02: #63.1 million) represents an effective tax
rate of 35.5% (2001/02: 34.5%). It is anticipated that the effective tax rate
will remain at approximately the same level in 2003/04.
Impact of 53rd week in prior year
2001/02 was a 53 week financial year. The extra week increased total sales by
#22.4 million (#16.5 million in the US and #5.9 million in the UK) and
contributed #4.0 million to operating profit (#2.5 million in the US and #1.5
million in the UK). Net of additional interest costs of #0.4 million, profit
before tax benefited by #3.6 million in 2001/02.
Liquidity and capital resources
Cash generated from operating activities amounted to #182.2 million (2001/02:
#188.0 million). This reflected an increase in operating profit and higher
depreciation offset by working capital requirements for stores opened in the
period. It is anticipated that in 2003/04 there will be a further increase in
working capital due to planned store openings. Net financing costs of #16.5
million (2001/02: #17.9 million) and tax of #57.3 million (2001/02: #57.9
million) were paid. Cash flow before investing activities was #108.5 million
(2001/02: #112.2 million).
Group capital expenditure was #49.5 million (2001/02: #60.7 million, #58.1
million at constant exchange rates). The level of capital expenditure was some
1.4 times the depreciation charge of #36.6 million (2001/02: #33.4 million).
Capital expenditure in 2003/04 is expected to be approximately #65 million, the
vast majority of which will be store related.
Equity dividends of #30.8 million (2001/02: #27.7 million) were paid.
Net debt
Net debt at 1 February 2003 was #140.1 million (2 February 2002: #201.7 million,
#175.6 million restated at a constant exchange rate). Group gearing (that is
the ratio of net debt to shareholders' funds) at the year end was 20.1% (2
February 2001: 29.7%). Excluding the facility secured on the receivables, net
cash at the year end was #12.9 million (2 February 2002: net debt #24.9
million).
Pensions
In 2002/03 the Group has continued to account for its UK defined benefit scheme
under SSAP 24. Consistent with prior years, the Group has used the most recent
actuarial investigation (for 2002/03 as at 5 April 2002) as the basis for the
SSAP 24 calculations.
Under this accounting treatment the net pension charge in respect of the UK
scheme is #nil (2001/02: #nil). The balance sheet continues to reflect a
deferred asset, before deferred tax, of #19.1 million (2001/02: #19.1 million).
Under the transitional arrangements for FRS 17 the Group's published accounts
for the 52 weeks ended 1 February 2003 will set out the additional required
disclosures. In summary, compliance would have resulted in a net pension credit
of #0.2 million in respect of the UK Scheme for the 2002/03 year. As a result
of the fall in the value of the UK Scheme's assets, under FRS 17 the market
value of those assets compared to the present value of the UK Scheme's
liabilities at 1 February 2003 showed a deficit of #6.7 million before deferred
tax, compared to a surplus of #24.9 million at 2 February 2002.
Summary of Fourth Quarter Results (Unaudited)
13 weeks 14 weeks
ended ended
1 February 2 February Like for
2003 2002(a) like
change
#m #m %
Sales
UK 198.7 198.8 3.1
US 447.6 480.8 4.3
___________ __________
646.3 679.6 3.9
___________ __________
Operating profit
UK - Trading 55.6 51.7
- Group central costs (2.0) (1.1)
___________ __________
53.6 50.6
US(b) 98.9 92.8
___________ __________
Total operating profit 152.5 143.4
Interest (3.9) (4.2)
___________ __________
Profit before tax 148.6 139.2
Taxation (52.6) (48.0)
___________ __________
Profit for the period 96.0 91.2
___________ __________
EPS - both basic and diluted 5.6p 5.4p
(a) The profit impact of the extra week is analysed in the Financial Review,
above.
(b) After goodwill amortisation of #0.3 million (2001/02: #0.3 million).
The Board of Directors approved this statement of preliminary results on 26
March 2003.
There will be an analysts' presentation at 2.00 p.m. London time today (9.00
a.m. New York time). For all interested parties there will be a simultaneous
audio webcast plus slides available at www.signetgroupplc.com and a live
telephone conference call. The details for the conference call are:
European dial-in: +44 (0) 20 7984 7576 Password "Signet"
Replay: +44 (0) 20 7984 7578 Access code: 163387
US dial-in: +1 719 457 2621 Password "Signet"
Replay: +1 719 457 0820 Access code: 163387
A video webcast of the presentation is expected to be available on the Group web
site (www.signetgroupplc.com) from close of business 26 March 2003.
High resolution photographs are available to the media free of charge at
www.newscast.co.uk
+44 (0) 20 7608 1000.
The next announcement is expected to be that for the first quarter 2003/04 sales
figures, which is scheduled for release on 8 May 2003.
This release includes certain forward-looking information that is based upon
management's beliefs as well as on assumptions made by, and data currently
available to, management. This information, which has been, or in the future
may be, included in reliance on the "safe harbor" provisions of the US Private
Securities Litigation Reform Act of 1995, is subject to a number of risks and
uncertainties, including but not limited to the factors identified in the
Company's filings with the US Securities and Exchange Commission, including its
2001/02 Annual Report on Form 20-F filed with the Commission on May 16, 2002.
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.
Consolidated profit and loss account
for the 52 weeks ended 1 February 2003
52 weeks 53 weeks
ended ended
1 February 2 February
2003 2002 Notes
__________ __________ ________
#m #m
_____________________________________________________ __________ __________ ________
Sales 1,608.0 1,578.1 2
_____________________________________________________ __________ __________ ________
Operating profit 216.2 200.7 2
Net interest payable and similar charges (16.5) (17.9)
_____________________________________________________ __________ __________ ________
Profit on ordinary activities before taxation 199.7 182.8
Tax on profit on ordinary activities (70.8) (63.1) 4
_____________________________________________________ __________ __________ ________
Profit for the financial period 128.9 119.7
Dividends (36.1) (30.5) 5
_____________________________________________________ __________ __________ ________
Retained profit attributable to shareholders 92.8 89.2
_____________________________________________________ __________ __________ ________
Earnings per share - basic 7.5p 7.1p 6
- diluted 7.5p 7.0p 6
_____________________________________________________ __________ __________ ________
All of the above relates to continuing activities.
Consolidated balance sheet
at 1 February 2003
1 February 2 February
2003 2002 Notes
____________________________________________________ __________ __________ ________
#m #m
____________________________________________________ __________ __________ ________
Fixed assets:
Intangible assets 19.8 24.2
Tangible assets 205.5 214.1
____________________________________________________ _________ __________ ________
225.3 238.3
____________________________________________________ _________ __________ ________
Current assets:
Stocks 539.5 555.5
Debtors (see note below) 359.8 380.7
Cash at bank and in hand 89.2 66.5
____________________________________________________ _________ __________ ________
988.5 1,002.7
Creditors: amounts falling due within one year (324.9) (320.5)
____________________________________________________ _________ __________ ________
Net current assets (see note below) 663.6 682.2
____________________________________________________ _________ __________ ________
Total assets less current liabilities 888.9 920.5
Creditors: amounts falling due after more than one year (184.4) (224.6)
Provisions for liabilities and charges:
Deferred taxation (0.5) (9.2)
Other provisions (7.5) (7.0)
____________________________________________________ _________ __________ ________
Total net assets 696.5 679.7 2
____________________________________________________ _________ __________ ________
Capital and reserves - equity:
Called up share capital 8.6 8.6
Share premium account 53.9 48.3
Revaluation reserve 3.1 3.0
Special reserves 101.7 38.3
Profit and loss account 529.2 581.5
____________________________________________________ _________ __________ ________
Shareholders' funds 696.5 679.7 7
____________________________________________________ _________ __________ ________
Note:
Debtors and net current assets include amounts recoverable after more than one
year of #19.1 million (2002: #19.1 million).
Consolidated statement of total recognised gains and losses
52 weeks 53 weeks
ended ended
1 February 2 February
2003 2002
_______________________________________________________________ ___________ __________
#m #m
_______________________________________________________________ ___________ __________
Profit for the financial period 128.9 119.7
Adjustment to property revaluation - 2.1
Translation differences (143.2) 28.0
_______________________________________________________________ ___________ __________
Total recognised gains and losses (14.3) 149.8
_______________________________________________________________ ___________ __________
Consolidated cash flow statement
for the 52 weeks ended 1 February 2003
52 weeks 53 weeks
ended ended
1 February 2 February
2003 2002 Notes
___________________________________________________ __________ __________ _________
#m #m
___________________________________________________ __________ __________ _________
Net cash inflow from operating activities 182.2 188.0 8a
___________________________________________________ __________ __________ _________
Returns on investments and servicing of finance:
Interest received 1.1 1.6
Interest paid (17.6) (19.5)
___________________________________________________ __________ __________ _________
Net cash outflow from returns on investments
and servicing of finance (16.5) (17.9)
___________________________________________________ __________ __________ _________
Taxation paid (57.3) (57.9)
___________________________________________________ __________ __________ _________
Capital expenditure:
Purchase of tangible fixed assets (49.5) (60.7)
Proceeds from sale of tangible fixed assets 1.3 -
___________________________________________________ __________ __________ _________
Net cash outflow from capital expenditure (48.2) (60.7)
___________________________________________________ __________ __________ _________
Equity dividends paid (30.8) (27.7)
___________________________________________________ __________ __________ _________
Cash inflow before use of liquid resources and financing 29.4 23.8
___________________________________________________ __________ __________ _________
Management of liquid resources:
Decrease in bank deposits (29.9) (27.9)
___________________________________________________ __________ __________ _________
Financing:
Proceeds from issue of shares 4.3 8.9
Repayment of bank loans (12.1) (16.5)
___________________________________________________ __________ __________ _________
Cash outflow from financing (7.8) (7.6)
___________________________________________________ __________ __________ _________
Decrease in cash in the period (8.3) (11.7)
___________________________________________________ __________ __________ _________
Reconciliation of net cash flow to movement in net debt
___________________________________________________ __________ _________ _________
Decrease in cash in the period (8.3) (11.7)
Cash outflow from decrease in debt 12.1 16.5
Cash outflow from increase in liquid resources 29.9 27.9
___________________________________________________ __________ _________ _________
Change in net debt resulting from cash flows 33.7 32.7
Translation difference 27.9 (5.3)
___________________________________________________ __________ _________ _________
Movement in net debt in the period 61.6 27.4
Opening net debt (201.7) (229.1)
___________________________________________________ __________ _________ _________
Closing net debt (140.1) (201.7) 8b
___________________________________________________ __________ _________ _________
Notes
1. Basis of preparation
This financial information has been prepared in accordance with applicable UK
accounting standards and under the UK historical cost convention as modified by
the revaluation of freehold and long leasehold properties. It is prepared on
the basis of the accounting policies as set out in the accounts for the 52 weeks
ended 1 February 2003.
2. Segment information
2003 2002
____________________________________________________________ __________ __________
#m #m
____________________________________________________________ __________ __________
Sales by origin and destination:
UK 473.6 452.1
US 1,134.4 1,126.0
____________________________________________________________ __________ __________
1,608.0 1,578.1
____________________________________________________________ __________ __________
Operating profit:
UK - Trading 67.0 60.7
- Group central costs (1) (6.0) (5.1)
____________________________________________________________ __________ __________
61.0 55.6
US 155.2 145.1
____________________________________________________________ __________ __________
Total 216.2 200.7
____________________________________________________________ __________ __________
2003 2002
____________________________________________________________ __________ __________
#m #m
____________________________________________________________ __________ __________
Net assets:
UK 144.3 136.1
US 692.3 745.3
Net debt (140.1) (201.7)
____________________________________________________________ __________ __________
696.5 679.7
____________________________________________________________ __________ __________
Notes:
The figures for the UK include the United Kingdom, Channel Islands and Republic
of Ireland.
The Group's results derive from one business segment - the retailing of
jewellery, watches and gifts.
(1) Group central costs include a charge of #0.5 million relating to an increase
in the provision against an onerous lease of a dormant Group property (2002:
#nil).
Notes
3. Foreign currency translation
2003 2002
____________________________________________________________ __________ __________
The exchange rates used for translation of US dollar
transactions and
balances in these accounts are as follows:
Profit and loss account (average rate) 1.53 1.44
Balance sheet (year end rate) 1.64 1.42
____________________________________________________________ __________ __________
The effect of translation on foreign currency borrowings less deposits in the
period was to decrease the Group's net borrowings by #27.9 million (2002: #5.3
million increase). The net effect of exchange rate movements on foreign
currency investments (excluding goodwill) and foreign currency borrowings less
deposits in the period was a loss of #79.8 million (2002: #15.1 million gain).
This amount has been taken to reserves in accordance with SSAP 20.
4. Taxation
2003 2002
______________________________________________________________ __________ __________
#m #m
______________________________________________________________ __________ __________
Taxes on profit:
UK corporation tax payable 22.6 19.5
US taxes 55.6 36.7
Deferred taxation:
UK (0.7) 0.3
US (6.7) 6.6
______________________________________________________________ __________ __________
70.8 63.1
______________________________________________________________ __________ __________
5. Dividends
2003 2002
_____________________________________________________________ _________ __________
#m #m
Interim dividend paid of 0.310p per share (2002: 0.289p) 5.3 5.0
Final dividend proposed of 1.80p per share (2002: 1.50p) 30.8 25.5
_____________________________________________________________ _________ __________
36.1 30.5
_____________________________________________________________ _________ __________
The interim dividend was paid on 8 November 2002. The proposed final dividend
is to be paid on 14 July 2003 to those shareholders on the register of members
on 6 June 2003.
Notes
6. Earnings per share
2003 2002
_____________________________________________________________ _________ _________
#m #m
Profit for the financial period 128.9 119.7
_____________________________________________________________ _________ _________
______________________________________________________________ _________ _________
Basic weighted average number of shares in issue (million) 1,710.7 1,690.2
Dilutive effect of share options (million) 16.4 12.5
_____________________________________________________________ _________ _________
Diluted weighted average number of shares (million) 1,727.1 1,702.7
_____________________________________________________________ _________ _________
Earnings per share - basic 7.5p 7.1p
- diluted 7.5p 7.0p
_____________________________________________________________ _________ _________
7. Consolidated shareholders' funds
Ordinary Deferred Share Revaluation Special Profit Total
share share premium reserve reserves and loss
capital capital account account
_________________________________ _________ _________ _________ __________ ________ _________ _________
#m #m #m #m #m #m #m
_________________________________ _________ _________ ________ __________ ________ _________ _________
Balance at 2 February 2002 8.5 0.1 48.3 3.0 38.3 581.5 679.7
Retained profit attributable to
Shareholders - - - - - 92.8 92.8
Exercise of share options 0.1 - 3.7 - - - 3.8
Shares issued to QUEST/ESOT - - 1.9 - - (1.9) -
Redemption of deferred share - (0.1) - - - 0.1 -
capital
Transfer on property disposals - - - 0.1 - (0.1) -
Translation differences - - - - 63.4 (143.2) (79.8)
_________________________________ _________ _________ ________ __________ ________ _________ _________
Balance at 1 February 2003 8.6 - 53.9 3.1 101.7 529.2 696.5
_________________________________ _________ _________ ________ __________ ________ _________ _________
Notes
8. Notes to the consolidated cash flow statement
a Reconciliation of operating profit to operating cash flows
2003 2002
________________________________________________________________ __________ __________
#m #m
________________________________________________________________ __________ __________
Operating profit 216.2 200.7
Depreciation and amortisation charges 37.8 34.7
Increase in stocks (44.9) (30.0)
Increase in debtors (26.5) (2.2)
Decrease in creditors (0.9) (15.1)
Increase/(decrease) in other provisions 0.5 (0.1)
________________________________________________________________ __________ __________
Net cash inflow from operating activities 182.2 188.0
________________________________________________________________ __________ __________
b Analysis of net debt
At 2 Feb Cash flow Exchange Other At 1 Feb
2002 movement movement 2003
______________________________ __________ __________ __________ __________ __________
#m #m #m #m #m
______________________________ __________ __________ __________ __________ __________
Cash at bank and in hand 0.6 - - - 0.6
Bank overdrafts (38.8) (8.3) 4.2 - (42.9)
______________________________ __________ __________ __________ __________ __________
(38.2) (8.3) 4.2 - (42.3)
______________________________ __________ __________ __________ __________ __________
Debt due after more than one year (215.3) - 28.9 12.4 (174.0)
Debt due within one year (14.1) 12.1 2.0 (12.4) (12.4)
Bank deposits 65.9 29.9 (7.2) - 88.6
______________________________ __________ __________ __________ __________ __________
(163.5) 42.0 23.7 - (97.8)
Total (201.7) 33.7 27.9 - (140.1)
______________________________ __________ __________ __________ __________ __________
9 Accounts
The financial information set out above does not constitute the Company's
statutory accounts for the 52 weeks ended 1 February 2003 or the 53 weeks ended
2 February 2002, but is derived from those accounts. Statutory accounts for the
53 weeks ended 2 February 2002 have been delivered to the Registrar of
Companies, whereas those for the 52 weeks ended 1 February 2003 will be
delivered following the Company's annual general meeting. The auditors have
reported under Section 235 of the Companies Act 1985 on those accounts for each
of those periods; their reports were unqualified and did not contain a statement
under Section 237 (2) or (3) of that Act.
Reconciliation of UK GAAP to US GAAP
Details of the appropriate effect on the Group's consolidated profit for the
financial period and shareholders' funds of differences between UK GAAP and US
GAAP are as follows:
Estimated effect on profit for the financial period 52 weeks 53 weeks
of differences between UK GAAP and US GAAP ended ended
1 February 2 February
2003 2002
__________________________________________________________________________ _________ _________
#m #m
__________________________________________________________________________ _________ _________
Profit for the financial period in accordance with UK GAAP 128.9 119.7
US GAAP adjustments:
Goodwill amortisation and write-offs 1.2 (13.4)
Sale and leaseback transactions 0.8 0.7
Extended service plan revenues (3.5) (2.0)
Pensions (0.3) (0.3)
Depreciation of properties 0.2 0.2
Stock compensation 1.3 (2.2)
__________________________________________________________________________ _________ _________
US GAAP adjustments before taxation (0.3) (17.0)
Taxation (0.3) (1.0)
__________________________________________________________________________ _________ _________
US GAAP adjustments after taxation (0.6) (18.0)
__________________________________________________________________________ _________ _________
Retained profit attributable to shareholders in
accordance with US GAAP 128.3 101.7
Earnings per ADS in accordance with US GAAP - basic 225.0p 180.5p
- diluted 222.9p 179.2p
Weighted average number of ADS's outstanding - basic 57.0 56.3
(million)
- diluted 57.6 56.8
__________________________________________________________________________ _________ _________
Estimated effect on shareholders' funds 1 February 2 February
of differences between UK GAAP and US GAAP 2003 2002
__________________________________________________________________________ _________ _________
#m #m
__________________________________________________________________________ _________ _________
Shareholders' funds in accordance with UK GAAP 696.5 679.7
US GAAP adjustments:
Goodwill in respect of acquisitions (gross) 531.2 594.7
Adjustment to goodwill (64.5) (74.7)
Accumulated goodwill amortisation (162.6) (181.8)
Sale and leaseback transactions (9.7) (10.5)
Extended service plan revenues (16.6) (15.3)
Pensions (13.8) 9.1
Depreciation of properties (2.5) (2.7)
Revaluation of properties (3.1) (3.0)
Dividends 30.8 25.6
__________________________________________________________________________ _________ _________
US GAAP adjustments before taxation 289.2 341.4
Taxation 12.3 5.8
__________________________________________________________________________ _________ _________
US GAAP adjustments after taxation 301.5 347.2
Shareholders' funds in accordance with US GAAP 998.0 1,026.9
__________________________________________________________________________ _________ _________
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAEDKALNDEEE