Gusbourne Regulatory News (GUS)

12 Jul 2006 07:00

GUS PLC12 July 2006 12 July 2006 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 pleased with the progress of both ARG and Experian in the first quarterof our new financial year, each of which is trading in line with expectations.Both businesses have clear strategies for growth, putting them in good shape fortheir future as independent companies." Argos Retail Group (ARG) % change in sales year-on-yearThree months to 30 June 2006 %Argos - total 14 - like-for-like 7 Four months to 30 June 2006* (1)Homebase - total (5) - like-for-like ------------------------- ---------------------- * 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 was stronger than expected. However, ARG remains cautious on the outlookfor a recovery in the rate of growth in consumer spending and expects the DIYmarket in particular to remain difficult. ArgosArgos again outperformed its market in the first quarter, with total sales up14% of which new stores contributed 7%. At 30 June 2006, Argos traded from 663stores with six new stores opened in the quarter. Like-for-like sales increasedby 7%. Consumer electronics performed very strongly, especially in flat panel TVpackages and set top boxes in the lead up to and during the World Cup. There wasalso good sales growth in bedroom furniture, photography and video game systems. This strong sales performance was, however, substantially offset by a relatedreduction in gross margin compared to the previous year. This was driven by theshift in the product mix and by the popularity of Argos' promotional offers inthe quarter, partially countered by the benefits obtained from ARG's supplychain initiatives. Argos Direct, the delivery to home operation, grew sales by 10% in the firstquarter and accounted for 25% of Argos' revenue. Within this, sales ordered overthe Internet for delivery to home rose by 46%, representing 8% of total revenue.An additional 10% of sales were reserved by phone or the Internet for latercollection in store (the service known as Check and Reserve), which was 69%ahead of the same period last year. The Autumn/Winter 2006 catalogue will launchon 29 July and will offer about 17,000 lines to all customers as the Argos Extraextended ranges continue to be made available across all stores and channels. HomebaseSales at Homebase decreased in the four months to 30 June 2006 by 1% in total,of which 4% came from new stores. Homebase opened three stores in the quarterbringing the total at 30 June 2006 to 300, of which 151 had a mezzanine floor. Like-for-like sales declined by 5%. Although kitchens and furniture showedstrong growth, core DIY and decorating ranges remained weak. As planned, grossmargin was ahead of the previous year as a result of a reduced level ofpromotional activity together with the benefits obtained from ARG's supply chaininitiatives. Experian % change in sales year-on-year for the three months to 30 June 2006 Continuing activities At actual exchange At constant only* rates % exchange rates % Experian North America 29 26Experian International 16 15Global Experian 23 21 * As disclosed in the preliminary results announcement on 24 May 2006, twobusinesses have been treated as discontinuing activities from 1 April 2006.These are MetaReward's incentive marketing websites which have been closed andlarge scale UK account processing, where Experian has announced its phasedwithdrawal by Autumn 2009. In the three months to 30 June 2006, Experian grew its sales from continuingactivities by 21% at constant exchange rates. Organic growth was 8% with thebalance from acquisitions. This performance reflects the benefits of Experian'sbroad portfolio by product, by sector and by geography. Experian North AmericaIn dollars, sales from continuing activities in the three months to 30 June 2006increased by 26% in total. Corporate acquisitions generated 17% of this, largelyin Interactive, while organic growth was the remaining 9%. In dollars and excluding acquisitions, Credit Information and Solutions grewsales slightly in the quarter, against a period where the comparatives were verystrong (H1 2005/6: +18%). There was double-digit growth in decision solutions,helped by client wins in application processing, fraud authentication, accountmanagement and triggers. In dollars, sales in Marketing Information andSolutions together were in line with the first quarter last year excludingacquisitions. There was strong growth in email marketing and research servicesbut continuing weakness in data sales and list processing. In dollars, Experian Interactive sales grew by about 75% in total to reachalmost 40% of Experian North America's revenue. Organic growth was strong inboth Consumer Direct and LowerMyBills.com, which was acquired in May 2005. Experian InternationalIn the three months to 30 June 2006, sales from continuing activities atExperian International increased by 15% in total at constant exchange rates.Organic growth was 7% in the period and the contribution from acquisitions,largely ClarityBlue, was 8%. Experian in the UK delivered another robustperformance despite a subdued UK credit environment. At constant exchange rates, Credit Information and Solutions together saw goodgrowth, led by decision solutions in Europe and Consumer Direct in the UK.Excluding acquisitions, Marketing Information and Solutions together saw solidgrowth in the quarter with particular strength in QAS. Outsourcing alsodemonstrated solid growth and recently won a two-year contract with the Ministryof Health in France. Experian International has made further small complementary acquisitions duringthe first quarter of the year, including Eiger Systems, a market-leadingprovider of bank account validation and payment processing software. Thiscomplements QAS, which validates customers' names and addresses, and which isgrowing strongly around the world, leveraging Experian's sales force andinfrastructure. Annual General Meeting GUS will hold its AGM on 19 July 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