Gusbourne Regulatory News (GUS)

14 Apr 2005 07:00

GUS PLC14 April 2005 14 April 2005 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: "Despite challenges in some of our markets, GUS has completed another successfulyear. Looking forward, while the UK retail environment has become moredifficult, we remain confident that the strong competitive positions and clearstrategies for growth in all our main businesses will enable GUS to deliverfurther progress in the new financial year." Argos Retail Group (ARG) % change in sales year-on-yearSix months to 31 March 2005 %Argos - total 5 - like-for-like 0 Five months to 28 February 20051 Homebase - total 6 - like-for-like 2 1 Homebase's year-end is the end of February to avoid distortions relating tothe timing of Easter. Sales growth at Homebase for the four months to 30 June2005 will be reported in GUS' First Quarter Trading Update. ArgosIn the year to 31 March 2005, Argos delivered sales growth of 8% (3% on alike-for-like basis) while also improving its gross margin. By offeringconsumers increased choice, value and convenience, Argos again outperformed itsmarket. Against a background of weakening UK retail demand, Argos increased its sales inthe second half by 5% in total, all of which came from new stores. Thesecontinue to perform well. Like-for-like sales were unchanged compared to thesame period last year. Supply chain gains enabled Argos to reduce prices furtherfor consumers, while still moving its gross margin slightly ahead compared tolast year. In the second half, there were strong performances from consumer electronics,digital cameras and leisure. However, the rate of growth in sales at Argos offurniture and white goods slowed during the period. Argos Direct, thedelivery-to-home operation, grew its sales by 10% in the second half andaccounted for 20% of Argos' revenue. At 31 March 2005, Argos had 592 stores, having opened 36 during the year. TheArgos Extra catalogue (4,000 additional lines) was available in 179 stores atyear-end and preparations continue for national roll-out. Total sales via theInternet increased by 29% in the second half, contributing 5% of sales. HomebaseHomebase increased its sales in the year to 28 February 2005 by 6% (3% on alike-for-like basis) at the same time as improving its gross margin. Thisreflects further good progress in improving its core ranges, enhancing customerservice and driving synergies by leveraging the scale and expertise of ARG. In the five months to 28 February 2005, sales increased by 6%, of which 4% camefrom new stores. Like-for-like growth was 2%. Total sales in all four majorproduct areas showed growth, with strong performances from new ranges in tiling,decorative fittings and lighting. Gross margin in the second half was slightlyahead of the same period last year. At 28 February 2005, Homebase had 287 stores, an increase of nine during theyear. 111 stores had mezzanine floors (compared to 67 a year ago), with thelatest enhanced formats giving sales uplifts in excess of the 15% delivered byearlier trials. ARGConsumer spending in the UK has slowed sharply in recent months, resulting in amodest decline on a like-for-like basis in the non-food, non-clothing market.Looking forward, we are planning on the assumption that this trend in the marketcontinues. At the same time, retailers are facing higher cost inflation in areassuch as rates, wages and energy costs. Clearly Argos and Homebase are not immunefrom this downturn in demand or these cost pressures. However, both businesseshave ongoing initiatives to deliver sustainable growth, underpinned byinvestment in the supply chain which continues to deliver substantial savings. As previously announced, ARG is planning to relocate a number of Homebasefunctions currently based in Wallington, Surrey to its head office in MiltonKeynes. This relates to about 500 Homebase employees, including themerchandising and buying functions. The costs of this move will be between £15mand £20m and will be charged against Homebase's operating profit in the yearjust ended. Experian % change in sales year-on-year for the six months to 31 March 2005Continuing At actual At constant activities only exchange rates % exchange rates % Experian North 16 22America Experian 18 18International Global Experian 17 20 In the year to 31 March 2005, Experian's sales from continuing activitiesincreased by 18% at constant exchange rates, with strength across allbusinesses. This marks the third consecutive year that Experian has delivereddouble-digit growth and demonstrates the benefits of continued investment inproduct innovation, expansion into new markets and successful infillacquisitions. In the second half, total sales from continuing activities increased by 20% atconstant exchange rates. Experian North AmericaIn dollars, Experian North America's sales from continuing activities increasedby 22% in the second half. Of this, 8% came from corporate acquisitions (most ofwhich were purchased by the end of March 2004). Growth was spread widely acrossthe business. Excluding corporate acquisitions, Credit sales grew particularly strongly, withexceptional performances from Consumer Direct (up by over one-third in the half)and MetaReward, the lower margin Internet lead-generation business. Businessinformation and value-added solutions, especially online notification, fraud,authentication, scoring and analytics, also delivered strong growth. There wasgood organic growth in Marketing, reflecting improving information sales. The second phase of the roll-out of the free credit report service, as requiredunder the FACT Act, took effect from 1 March 2005. The planned cost recoverycharge contributed about 2% to total sales in the half. Experian InternationalExperian International, which accounts for about 45% of Experian's worldwiderevenue, grew sales from continuing activities in the second half by 18% atconstant exchange rates. Of this, 13% came from acquisitions, mainly QAS, theaddress management software company acquired in October 2004, which is tradingto plan. Excluding acquisitions, Experian International showed good growth in Credit,Marketing and Outsourcing. There were strong performances from many areas,including Business Strategies (micromarketing and economic forecasting), creditand marketing in Italy, business-to-business solutions and emerging markets. BurberryGUS has a 66% stake in Burberry Group plc. The following summarises the latter'sTrading Update released on 13 April 2005. % change in sales year-on-year for the six months ended 31 March 2005 %At actual exchange rates 2At constant exchange rates 6 Sales in the year to 31 March 2005 increased by 10% at constant exchange rates,with good growth across all channels, further capitalising on the opportunitiesavailable to the brand. Total revenues at Burberry in the second half increased by 6% at constantexchange rates. Retail sales increased by 6% at constant exchange rates, drivenby contributions from newly opened and refurbished stores. Wholesale salesincreased by 5% at constant exchange rates. Licensing revenues increased by 8%at constant exchange rates, reflecting declines in Japanese volumes and stronggains by global product licensees. PensionsAs previously disclosed, GUS' two UK Defined Benefit pension schemes had modestdeficits at 31 March 2004. To improve the funding of these schemes, the Groupagain made voluntary special contributions, which totalled £76m in March 2005.The contributions were made from existing financial resources and willmarginally increase earnings in the new financial year and beyond. Future announcementsGUS will announce its Preliminary Results for the 12 months to 31 March 2005 on25 May 2005. These will be prepared under UK GAAP. It is planned to publish therestatement of these results under IFRS on 14 June 2005. The First QuarterTrading Update will be on 20 July 2005. 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 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 results to differ materiallyfrom any expected future results in forward-looking statements. This information is provided by RNS The company news service from the London Stock Exchange