Gusbourne Regulatory News (GUS)

20 Jul 2005 07:00

GUS PLC20 July 2005 20 July 2005 GUS plc First Quarter Trading Update GUS plc, the retail and business services group, today issues its regular updateon trading. John Peace, Group Chief Executive of GUS, said: "We are delighted with Experian's strong start to the year, with sales up 27% atconstant exchange rates, building on its three year record of double-digit salesgrowth. Although the UK retail environment remains very challenging, we areconfident that all our businesses have clear strategies to deliver sustainablelong-term growth." Argos Retail Group (ARG) % change in sales year-on-yearThree months to 30 June 2005 %Argos - total 2 - like-for-like (4) Four months to 30 June 20051 Homebase - total 1 - like-for-like (2)------------------------- ----------------------1 Homebase's year-end is the end of February to avoid distortions relating tothe timing of Easter. In the first quarter of the financial year, the non-food, non-clothing market inthe UK continued to decline on a like-for-like basis. Argos and Homebase cannotbe immune from this downturn in demand or from the higher cost inflation thatretailers are facing. However, against this challenging background, both Argosand Homebase outperformed their markets in the first quarter. ArgosArgos increased its sales by 2% in total in the first quarter. Of this, newstores contributed 6% while like-for-like sales declined by 4%. At 30 June 2005,Argos traded from 601 stores, with nine new stores opened in the quarter. Compared to the same period last year, there were good performances fromconsumer electronics, white goods and toys, while housewares, garden ranges andjewellery were difficult. Gross margin was in line with last year, despite anadverse product mix and an increased take-up by consumers of promotional offers. Argos Direct, the delivery to home operation, grew its sales by 6% in the firstquarter and accounted for 26% of Argos' revenue. Sales via the Internetincreased by 24%, representing 7% of total revenue. A further 6% of total saleswas derived from Argos' "Check and Reserve" multi-channel ordering facilities. The acquisition of 33 Index stores will complete tomorrow (21 July 2005), whenthe leases on the majority of the stores will transfer to Argos, enabling themto be re-fitted and re-branded during August and September. However, as alreadystated, the transitional costs will reduce profit by about £8m in the firsthalf. The Autumn/Winter 2005 catalogue will launch on 30 July. Compared to the 13,200lines in the standard catalogue last year, this will offer about 17,700 lines toall customers as the Argos Extra extended ranges are made available in allstores and channels for the first time. Approximately 160 stores will nowstock-in the additional lines, with the remaining stores offering customers theoption to order-in the additional products for collection later from store. HomebaseMuch progress has been made in the last two years in improving the shoppingexperience at Homebase in areas such as customer service, stock availability,new ranges and better pricing. Although this requires continuing investment,these initiatives are enabling Homebase to take share in what remains a verydifficult market. In the four months to 30 June 2005, sales at Homebase increased by 1% in total.Of this, new stores contributed 3% while like-for-like sales declined by 2%. At30 June 2005, Homebase traded from 288 stores, of which 122 had a mezzaninefloor. Certain core DIY ranges including tiling and flooring performed well, as didkitchens, furniture and horticulture. Other seasonal garden areas, mainly gardenfurniture, were weak. Gross margin was in line with last year. Experian % change in sales year-on-year for the three months to 30 June 2005Continuing activities only At actual exchange At constant rates % exchange rates %Experian North America 31 33Experian International 22 21 Global Experian 26 27 Experian has delivered an exceptionally strong performance in the first quarterof the financial year. Total sales increased by 27% at constant exchange rates,driven by both organic growth (13%) and the contribution from acquisitions(14%). This performance results from continuing investment in new products,markets and businesses, reinforcing the strong market position of Experian. Experian North AmericaIn dollars, Experian North America's sales from continuing activities increasedby 33% in the first quarter, or 20% excluding corporate acquisitions. There wasdouble-digit organic growth in nearly all business units. Credit sales were helped by strong market demand in credit profiles andprescreen activity, as well as contract wins in value added-products such astriggers, account management and scoring products. Strong organic sales growthfrom email marketing, database management and the automotive businessunderpinned the performance of Marketing. Experian has this month acquiredCredit Data Services Inc, its largest affiliate bureau, based in Florida. Experian Interactive saw further exceptional sales growth of about 50% excludingacquisitions. This was driven by the success of new products in both ConsumerDirect and MetaReward, as well as increasing Internet usage by consumers.LowerMyBills.com and Affiliate Fuel, which were acquired in the first quarter,are trading in line with expectations. The third phase of the roll out of the free credit report service, as requiredunder the FACT Act, took effect from 1 June 2005. The cost recovery chargecontributed nearly 3% to total sales growth in the quarter. Experian InternationalExperian International, which accounts for about 45% of Experian's worldwiderevenue, grew sales from continuing activities in the first quarter by 21% atconstant exchange rates. Of this, 15% came from acquisitions, mainly QAS, aleading supplier of address management software acquired in October 2004, whichis trading to plan. This business is winning significant contracts with thepublic sector, a key growth opportunity. Excluding acquisitions, Experian International showed good growth in Credit,Marketing and Outsourcing. There was a strong performance in UK consumer creditinformation from traditional financial services clients, as well as increasingactivity in authentication for the public sector. UK business creditinformation, Southern and Eastern Europe and email marketing were also strong. BurberryGUS has a 66% stake in Burberry Group plc. The following summarises the latter'sTrading Update released on 13 July 2005. % change in sales year-on-year for the three months ended 30 June 2005 %At actual exchange rates 10 At constant exchange rates 9 Total sales at Burberry in the first quarter increased by 9% at constantexchange rates. Burberry has agreed to acquire its Taiwan distributors, whooperate 12 retail stores and concessions across Taiwan, for approximately £9m. Retail sales increased by 9%, driven by contributions from newly opened andrefurbished stores and marginal gains at existing stores. Burberry continues toanticipate broadly flat first half wholesale sales, excluding the impact of theTaiwan acquisition. Wholesale revenue in the first quarter increased by 5%.Total licensing revenues increased 26% at constant exchange rates, reflectingincreased royalties from global product licensees, led by fragrance. GUS today announces that the demerger of its remaining 66% stake in Burberry isexpected to take place in December 2005 after the release of Burberry's InterimResults. Future announcementsGUS will announce its Interim Results for the six months to 3O September 2005 on17 November 2005. The First Half Trading Update will be on 12 October 2005.All financial statements presented by GUS are now prepared under InternationalFinancial Reporting Standards. Enquiries GUSDavid Tyler Finance Director 020 7495 0070Fay Dodds Director of Investor Relations FinsburyRupert Younger 020 7251 3801Rollo Head GUS announcements are available on its website, www.gusplc.com. There will be aconference call to discuss this update at 3pm today, with a recording availablelater on the GUS website. Certain statements made in this announcement are forward looking statements.Such statements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual events or results to differmaterially from any expected future events or results referred to in theseforward looking statements. Any shares to be distributed in the proposed demerger of Burberry Group plc havenot been and will not be registered under the US Securities Act of 1933 (the"Securities Act") and may not be offered or sold within the United States absentregistration under the Securities Act or an exemption from registration. Nopublic offering of such shares will be made in the United States. This information is provided by RNS The company news service from the London Stock Exchange