Gusbourne Regulatory News (GUS)

12 Oct 2005 07:00

GUS PLC12 October 2005 12 October 2005 GUS plc First 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: "An outstanding performance from Experian was clearly the highlight of our firsthalf. With sales up 29%, the strength of Experian's broad product and geographicreach is evident. ARG continues to be affected by the challenging UK retailenvironment but made good operational progress in the half. We believe that allour businesses are executing effectively on plans designed to deliver long-termvalue creation for shareholders." Argos Retail Group (ARG) % change in sales year-on-yearSix months to 30 September 2005 %Argos - total 4 - like-for-like (3) Seven months to 30 September 20051 Homebase - total (1) - like-for-like (4)--------------------------- -------------------- 1 Homebase's year-end is the end of February to avoid distortions relating tothe timing of Easter. The non-food, non-clothing market in the UK remained weak during the first half,with sales falling on a like-for-like basis. ARG is planning on the assumptionthat like-for-like sales will remain in decline for the market as a whole forthe next 12 months. However, in the first half, against this background, both Argos and Homebaseoutperformed their markets and maintained or improved gross margin.Retailers are currently facing higher cost inflation which is adverselyaffecting Argos but more so Homebase, given its cost structure. Despite thecurrent weak economic environment, both businesses continue to invest in areassuch as new space, supply chain and new ranges to strengthen their long-termcompetitive position. ArgosArgos increased its sales by 4% in total in the first half. Of this, new storescontributed nearly 7%, while like-for-like sales declined by 3%. Compared to thesame period last year, there were good performances from consumer electronics(particularly MP3 players and LCD televisions), white goods, leisure and toys.Jewellery and housewares remained difficult. Argos continued to deliver supplychain gains such that gross margin was in line with last year despite an adverseproduct and promotional mix. The biggest ever Autumn/Winter catalogue was successfully launched on 30 July.This catalogue now offers 17,700 lines (up from 13,200 a year ago) to customersin all stores. Argos also opened 44 stores in the half, including 30 of the 33acquired Index stores, which were refitted and reopened near to the end of theperiod. The remaining three Index stores will open by the end of October. At 30September 2005, Argos traded from 636 stores. Argos Direct, the delivery to home operation, grew its sales by 6% in the firsthalf and accounted for 25% of Argos' revenue. Sales via the Internet increasedby 30%, representing 7% of total revenue. A further 7% of total sales was madevia Argos' "Check and Reserve" multi-channel ordering facilities, up 26% year onyear. As previously announced, profit at Argos in the first half will bear thetransitional costs for the Index stores, the costs associated with the change instaffing arrangements in-store and higher catalogue and payroll-related costs asreported under IFRS. Combined, these are expected to total around £20m. HomebaseIn a market that deteriorated further towards the end of the first half, salesat Homebase declined by 1% in total for the seven months to 30 September 2005.Of this, new stores contributed 3% growth while like-for-like sales declined by4%. There were strong performances from horticulture (new ranges andmerchandising) and from big ticket items, especially in kitchens and FurnitureExtra, which benefited from new ranges and additional mezzanine space. Tools,building and seasonal gardening lines were weaker. Driven by supply chain gains, gross margin at Homebase in the first half wasslightly ahead of last year although higher costs are impacting its operatingmargin. Looking forward, increased promotional activity in the market may alsoaffect profit. At 30 September 2005, Homebase traded from 293 stores, an increase of six in thehalf. 19 mezzanine floors were added to existing stores in the period, withanother four planned for the second half. 134 stores currently have mezzaninefloors. Experian % change in sales year-on-year for the six months to 30 September 2005 Continuing activities only At actual exchange At constant rates % exchange rates % Experian North America 36 37Experian International 20 19 Global Experian 29 29 Experian has achieved record underlying sales growth in the first half. This wasdriven by the strength of Experian's offer in many products and in manycountries, aided by effective sales execution and continued innovation invalue-added solutions. Total sales in the first half increased by 29% atconstant exchange rates with strong organic growth (12%) complemented by thecontribution from acquisitions (17%) which are trading well. Experian North AmericaIn dollars, Experian North America's sales from continuing activities increasedby 37% in the first half. Corporate acquisitions contributed 19% to sales growthin the first half, with the largest being LowerMyBills.com which was purchasedin May 2005. Excluding these acquisitions, sales grew by an exceptional 18%. Thebusiness faces much stronger comparatives in the second half (H1 2004/5: +7%; H22004/5: +14%). Credit sales benefited from strong market demand in credit profiles andprescreen activity, from the FACTA cost recovery charge as well as continuedcontract wins in value-added products such as event triggers, account managementand scoring products. Strong organic sales growth from email marketing, businessmarketing and the automotive business underpinned the performance of Marketing.Excluding acquisitions, sales at Experian Interactive grew by nearly 40% in thefirst half, slowing in the latter part of the period. Increased use of theInternet by consumers and advertisers coupled with product innovation continuesto drive premium growth in this business. Experian InternationalExperian International, which accounts for over 40% of Experian's worldwiderevenue, grew sales from continuing activities in the first half by 19% atconstant exchange rates. Of this, 14% came from acquisitions, mainly QAS, aleading supplier of address management software, which was acquired in October2004. Excluding acquisitions, Experian International showed solid growth in Credit,Marketing and Outsourcing. Despite a slowdown in the rate of growth in grosslending in the UK, Experian continued to deliver a robust performance in thismarket driven by value-added products and by initiatives focused on marketsincluding automotive, telecommunications and the public sector. Underlyingdouble-digit growth continued in Spain, Italy and Eastern Europe. Experiancontinues to invest in new regions, recently signing its first contract in Japanto sell decision solutions to JCB, the largest card issuer in Japan. BurberryGUS has a 65% stake in Burberry Group plc. The following summarises the latter'sTrading Update released today. % change in sales year-on-year for the six months ended 30 September 2005 %At actual exchange rates 2At constant exchange rates1 3 1 Also excludes the financial effect of the acquisition of Burberry's Taiwan-related business. Underlying sales at Burberry in the first half increased by 3% at constantexchange rates excluding the effect of the acquisition of Burberry'sTaiwan-related business. Underlying retail sales increased by 9% driven by contributions from new andrefurbished stores. Underlying Wholesale revenue declined by 1% in the half. Onthe basis of Spring/Summer 2006 merchandise orders received to date, Burberryanticipates a moderate underlying decline in Wholesale revenue for the secondhalf. Underlying licensing revenue increased by 3%. Burberry recently announceda new ten-year eyewear licence with Luxottica Group. The management team at Burberry will be further strengthened by the appointmentof Angela Ahrendts. She will join Burberry in January 2006 and become ChiefExecutive on 1 July 2006. Rose Marie Bravo will assume the role of Vice-Chairmanat that time. Preparations for the planned demerger of GUS' remaining 65% stake in Burberry inDecember 2005 are on track. Future announcementsGUS will announce its Interim Results for the six months to 30 September 2005 on17 November 2005. The Third Quarter Trading Update will be on 12 January 2006. 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. All financial statements presented by GUS are now prepared under InternationalFinancial Reporting Standards (IFRS). The unaudited financial results for theyear to 31 March 2005 and the six months to 30 September 2004 as prepared underIFRS were released on 14 June 2005 and are available 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