Gusbourne Regulatory News (GUS)

12 Apr 2006 07:01

GUS PLC12 April 2006 12 April 2006 GUS plc Second Half Trading Update GUS plc, the retail and business services group, today issues its regular updateon trading. John Peace, Group Chief Executive of GUS, said: "Experian has delivered record sales growth in the year just ended, with a goodbalance between organic and acquired growth. It continues to benefit from itsinvestment in new products, markets and regions. We continue to remain cautious on the outlook for UK retailing, especially inDIY. However, in the difficult environment during the second half, sales at bothArgos and Homebase again outperformed their markets." Argos Retail Group (ARG) % change in sales year-on-yearSix months to 31 March 2006 % Argos - total 9 - like-for-like 0 Five months to 28 February 20061 Homebase - total (1) - like-for-like (5)------------------------- ----------------------1 Homebase's year-end is the end of February to avoid distortions relating tothe timing of Easter. ArgosArgos again outperformed its market, with total sales up 9% in the second halfof the year. All of this came from new stores, including the 33 sites acquiredfrom Index. At 31 March 2006, Argos had 657 stores, having opened 65 during theyear. Like-for-like sales in the second half were in line with last year. Consumerelectronics continued to perform strongly, as did bedroom furniture, textilesand white goods. Jewellery remained a difficult market. Argos now offerscustomers a wider choice than ever with the national roll-out of Argos Extra.The current catalogue is the first Spring/Summer edition to offer the expanded range of 17,200 lines (up from 13,300 in the main catalogue a year ago). Gross margin was in line with last year, with supply chain gains funding lowerprices for consumers.Customers again increased their use of Argos' multi-channel capabilities. ArgosDirect, the delivery to home operation, grew sales by 13% in the second half,representing 21% of revenue. Within this, sales ordered over the Internet roseby 39%, contributing 7% of revenue. A further 12% of sales were reserved byphone or Internet for later collection in store (known as Check and Reserve).The latter was also 39% ahead of the same period last year. HomebaseThe DIY market weakened further in the second half of the financial year.Against this background, sales at Homebase in the five months to 28 February2006 fell by 1% in total. New stores contributed 4% to sales. At 28 February 2006, Homebase had 297stores, an increase of 10 during the year. Of these, 144 had a mezzanine floor,compared to 111 a year ago. Despite increased promotional activity, like-for-like sales deteriorated duringthe period, leading to a 5% decline in the half. Although kitchens and furnitureshowed continued strong growth (helped by the roll-out of Furniture Extra andadditional mezzanines), core DIY and decorating ranges showed significantlike-for-like sales declines in the period. Gross margin was down year-on-year, reflecting an adverse mix and more pricereductions, especially in the latter part of the period. The impact of thesereductions, which did not generate the required volume uplifts, coupled withhigher costs, will result in EBIT at Homebase for the year just ended of around£50m. Looking forward, Homebase expects the DIY market to remain weak for muchof 2006, but also expects to continue to take share driven by its initiatives incustomer service, new space and leveraging the ARG infrastructure. Experian % change in sales year-on-year for the six months to 31 March 2006Continuing activities only At actual exchange At constant rates % exchange rates %Experian North America 45 35Experian International 13 13Global Experian 30 25 Experian has completed another successful year, delivering double digit salesgrowth for the fourth consecutive 12 month period. In the second half of thisfinancial year, sales increased by 25% reflecting the strength of Experian'sorganic growth (9%), as well as its ability to acquire and integrate relatedbusinesses. Experian continues to invest in new products, markets andinfrastructure. Experian North AmericaIn dollars, sales at Experian North America grew by 35%. Of this, 9% was organicgrowth and 26% was from corporate acquisitions, including LowerMyBills which wasacquired in May 2005. In the next financial year, acquisitions made to date areexpected to increase percentage sales growth by mid single digits. Credit Information and Solutions together increased sales by 10% excludingacquisitions. This was driven by good market demand for consumer creditprofiles, prescreen services and business credit reports, as well as increasedsales penetration in value-added solutions such as account management, triggersand authentication services. The FACT Act cost recovery charge fully annualisedon 1 January 2006, contributing only 1% to Credit sales in the second half as awhole. Marketing Information and Solutions together showed solid organic growth in thesecond half, with a continued strong performance in email marketing andsyndicated market research partially offset by weakness in data sales. Sales at Experian Interactive more than doubled in the second half of the year,largely reflecting first time contributions from acquired businesses, includingLowerMyBills and PriceGrabber, both of which are trading well. Consumer Directgrew by about 30% year-on-year, driven by more new members and increased revenueper member. As expected, sales at MetaReward were significantly down year-on-year.MetaReward has now decided to close its incentive marketing websites, whichoperate in an increasingly unattractive market for both consumers and thusclients. Sales here in the year to 31 March 2006 were about $75m (equivalent toabout 4% of Experian North America's total revenue), with an EBIT margin wellbelow 10%. Experian InternationalSales at Experian International increased by 13% at constant exchange rates inthe second half. Acquisitions contributed 4% of this, aided by the purchase ofClarityBlue in late January 2006. ClarityBlue is trading well and has recentlywon a significant contract extension to support BSkyB's subscriber growthtargets. Organic sales growth in the second half was 9%. Sales of Credit Information andSolutions accelerated, reflecting strong growth in decision analytics,especially in Europe and Asia Pacific and a robust performance from the UK,especially outside financial services. Marketing showed good growth in the half,helped by strong performances from email marketing, Business Strategies and fromQAS in the public sector. Outsourcing continued with its steady rate of growth.Experian recently won a multi-million euro contract with the French governmentto run the workers' electoral roll (Prud'homales) for the third consecutivetime. Further on the demerger of ARG and ExperianFollowing discussions with the FTSE, it is expected that ARG will be classifiedin the General Retailing sector and Experian in the Support Services sector. Future announcementsGUS will announce its Preliminary Results for the 12 months to 31 March 2006 on24 May 2006. Enquiries GUSDavid Tyler Group 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 Trading Update 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. This information is provided by RNS The company news service from the London Stock Exchange