RNS Number:3212P
Signet Group PLC
03 September 2003
Signet Group plc
(LSE: SIG and Nasdaq NMS: SIGY)
Unaudited Interim Results for 26 weeks ended 2 August 2003
Embargoed until 12.00 noon (BST) 3 September 2003
SIGNET REPORTS FIRST HALF RESULTS
Group profit before tax: #47.8m (2002/03: #47.6m) Unchanged*
Group like for like sales up 3%
Group sales: #667.4m (2002/03: #682.8m) down 2%*
Earnings per share: 1.8p (2002/03: 1.8p) Unchanged
Interim dividend per share: 0.341p (2002/03: 0.310p) up 10%
*At constant exchange rates Group profit before tax increased by 10% and sales
by 5%.
See note 10 for a reconciliation between the published GAAP results and figures
quoted at constant exchange rates.
Terry Burman, Group Chief Executive, commented: "The Group has made further good
progress in the first half with an increase in profit before tax of 10% at
constant exchange rates. The effect of exchange translation means that the
extent of the underlying improvement is not immediately apparent in reported
results.
The US business continued to gain market share against the background of a
challenging trading environment. The UK division again outperformed the UK
retail market, the drive to increase market share in diamonds being particularly
successful.
In the US recent economic indicators have shown a more positive trend, although
it is too early to conclude that this will be maintained. In the UK the
economic environment remains satisfactory; however some further gradual
moderation in the growth of consumer spending is generally predicted.
Our businesses on both sides of the Atlantic are in excellent shape to compete
in the important final quarter, having significantly strengthened their
respective positions in recent years."
Enquiries:
Terry Burman, Group Chief Executive +44 (0) 20 7399 9520
Walker Boyd, Group Finance Director +44 (0) 20 7399 9520
Mike Smith, Brunswick +44 (0) 20 7404 5959
Tim Grey, Brunswick +44 (0) 20 7404 5959
Signet operated 1,675 speciality retail jewellery stores at 2 August 2003; these
included 1,073 stores in the US, where the Group trades as "Kay Jewelers", "
Jared The Galleria Of Jewelry" and under a number of regional names. At that
date Signet operated 602 stores in the UK, where the Group trades as "H.Samuel",
"Ernest Jones" and "Leslie Davis". Further information on Signet is available
at www.signetgroupplc.com
Interim Results Statement
GROUP
In the 26 weeks to 2 August 2003 profit before tax at constant exchange rates
rose by 9.6%. The US dollar weakened by some 10% compared to the same period
last year resulting in a maintained level of reported profit before tax of #47.8
million (H1 2002/03: #47.6 million restated for adoption of FRS 17 - "Retirement
Benefits").
Like for like sales increased by 2.8% with total sales at constant exchange
rates up by 4.9%; on an actual exchange rate basis total sales were down 2.3% at
#667.4 million (H1 2002/03: #682.8 million).
Operating profit at constant exchange rates rose by 6.8%, although on a reported
basis fell to #53.9 million (H1 2002/03: #55.3 million restated). Operating
margin was unchanged at 8.1% (H1 2002/03: 8.1% restated). Earnings per share
were maintained at 1.8p, the tax rate being the same as last year at 35.5%. The
Board has declared an interim dividend of 0.341p per ordinary share (H1 2002/03:
0.310p), an increase of 10.0%.
OPERATING REVIEW
US (circa 71% of Group sales)
The period started with a strong Valentine's Day performance. Subsequent
trading was affected by the geopolitical situation and inclement weather
resulting in a like for like sales increase in the first quarter of 1.1%.
Although some degree of uncertainty continued throughout the second quarter the
overall trading environment improved and like for like sales rose by 3.1%.
Against this background the division again outperformed its competition and
gained market share with a like for like sales increase for the first half of
2.1%. Sales rose by 4.9% at constant exchange rates but fell by 4.9% on a
reported basis to #474.9 million (H1 2002/03: #499.1 million). Operating profit
at #48.9 million (H1 2002/03: #51.8 million), was up by 4.1% at constant
exchange rates but down 5.6% on a reported basis.
Gross margin was the same as the comparable period last year, the successful
implementation of a range of initiatives having offset planned changes in the
product mix and gold price increases. The latter may have a greater impact in
the second half. Operating margin was 10.3% (H1 2002/03: 10.4%) with costs and
inventory levels remaining under close control. Bad debt charges were 2.6% of
total sales (H1 2002/03: 2.7%), this being an improvement on the average of the
previous five years.
The bridal and diamond categories benefited from further extension of the
Group's exclusive Leo Diamond merchandising programme. Testing of additional
branded merchandise continued throughout the division together with the
expansion of the luxury watch category in Jared. Marketing activity in the
first half benefited from increased television advertising support of Kay and
the expansion of television commercials into new local markets for Jared. A
further shift to television advertising for both Kay and Jared is anticipated
for Christmas 2003.
It is expected that the overall annual advertising cost to sales ratio will be
broadly maintained at the same level as last year. The focus on staff training,
together with initiatives to reduce and simplify administrative functions in the
stores continued.
During the period there were 29 mall store openings and seven closures. It is
expected that 19 mall stores will be opened in the second half and 15 closed.
26 mall stores were refurbished or relocated in the first half, with a further
29 scheduled for the second half. The trial of 10 Kay stores in off-mall
centres will commence in the second half. The like for like sales performance of
the Jared stores continued to exceed that of the US business as a whole. One
new Jared was opened in the period, with a further 11 planned for the second
half. It is expected that approximately 7% will have been added to total US
selling space by the end of the current year. The store complement will then
consist of 1,008 mall stores, 10 off-mall Kay stores and 79 Jared stores.
UK (circa 29% of Group sales)
UK operating profit rose by 25.8% to #7.8 million (H1 2002/03: #6.2 million
restated). Sales increased by 4.8% to #192.5 million (H1 2002/03: #183.7
million). Like for like sales increased by 4.5%, but some moderation in the
pace of growth was evident in the second quarter. Although up against strong
like for like sales comparatives the division again outperformed the general
retail sector. H.Samuel (17% of Group sales) and Ernest Jones (12% of Group
sales) achieved like for like sales increases of 3.4% and 6.1% respectively.
Gross margin was above last year's level and the operating margin increased to
4.1% (H1 2002/03: 3.4% restated) reflecting improved store productivity.
The focus on diamonds continued with participation in the sales mix showing a
further encouraging increase. Further development of diamond merchandise and
in-store presentation continued, with the extension of the Leo Diamond range in
Ernest Jones and the Forever Diamond range in H.Samuel. Compared to the same
period last year the average unit selling price increased by 7.5% in H.Samuel
and by 9.9% in Ernest Jones. Staff training remains a priority.
The results of the new, more open store design, that was tested in 17 stores in
2002, continue to be encouraging and the concept is being extended to a further
39 stores (including new store openings), bringing the total up to 56. In 2004
a further increase in the number of such refurbishments is anticipated. During
the year a total of some 25 H.Samuel and 9 Ernest Jones stores will be
refurbished or relocated, and a further 7 Ernest Jones stores will be opened. At
the year end it is anticipated that, net of 14 store closures, there will be 406
H.Samuel and 197 Ernest Jones stores.
Group costs, net interest and taxation
Group central costs were #2.8 million (H1 2002/03: #2.7 million). Net interest
payable fell to #6.1 million (H1 2002/03: #7.7 million restated), primarily as a
result of the lower level of net debt. The tax charge was #17.0 million
(H1 2002/03: #16.9 million).
Net debt
Net debt at 2 August 2003 was #164.7 million (3 August 2002: #193.7 million).
Group gearing (that is the ratio of net debt to shareholders' funds) at 2 August
2003 was 22.7% (3 August 2002: 29.5% restated). Since the beginning of this
financial year net debt as reported has increased by #25.0 million before
translation differences (H1 2002/03: #10.6 million) attributable to increased
dividend and taxation payments together with anticipated investment in
inventory. Fixed capital investment in the current year is expected to be in
the range of #60 million to #65 million (2002/03: #49.5 million).
Prior Year Adjustment
The Group has now adopted FRS 17 - "Retirement Benefits". The overall effect
has been a net charge of #0.9 million to profit before tax in the first half
against a restated comparable period net credit of #0.1 million. Under the
market-based approach of FRS 17 there was a #6.7 million pension fund deficit at
1 February 2003 in comparison with a balance sheet asset of #19.1 million under
SSAP 24. Consequently a non-cash charge of #18.1 million, net of deferred tax,
has been accounted for by way of a prior year adjustment charged directly to
reserves to reflect this change, representing 2.7% of shareholders' funds at 1
February 2003. Details of the impact of adopting FRS 17 are shown in Note 9 of
the first half 2003/04 results.
PROSPECTS
In the US, recent economic indicators have shown a more positive trend, although
it is too early to conclude that this will be maintained. In the UK, the
economic environment remains satisfactory; however some further gradual
moderation in the growth of consumer spending is generally predicted.
The Group's businesses on both sides of the Atlantic are in excellent shape to
compete in the important final quarter, having significantly strengthened their
respective positions in recent years.
*********************
There will be an analysts' presentation at 2.00 p.m. London time today (9.00
a.m. New York time). For all interested parties there will be a simultaneous
webcast available at www.signetgroupplc.com and a live conference call. The
details for the conference call are:
European dial-in: +44 (0) 20 7984 7582 Password "Signet"
Replay: +44 (0) 20 7784 1024 Access code: 414115
US dial-in: +1 719 457 2629 Password "Signet"
Replay: +1 719 457 0820 Access code: 414115
Slides for the presentation are expected to be available at
www.signetgroupplc.com for the conference call. A video webcast of the
presentation is expected to be available from close of business on 3 September
2003 at www.signetgroupplc.com and on the RAW broadband network.
This release includes statements which are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements, based upon management's beliefs as well as on assumptions made by
and data currently available to management, appear in a number of places
throughout this release and include statements regarding, among other things,
our results of operation, financial condition, liquidity, prospects, growth,
strategies and the industry in which the company operates. Our use of the words
"expects," "intends," "anticipates," "estimates," "may," "forecast," "objective,
" "plan" or "target," and other similar expressions are intended to identify
forward-looking statements. These forward-looking statements are not guarantees
of future performance and are subject to a number of risks and uncertainties,
including but not limited to general economic conditions, the merchandising,
pricing and inventory policies followed by the Group, the reputation of the
Group, the level of competition in the jewellery sector, the price and
availability of diamonds, gold and other precious metals, seasonality of the
Group's business and financial market risk.
For a discussion of these and other risks and uncertainties which could cause
actual results to differ materially, see the "Risk and Other Factors" section of
the Company's 2002/03 Annual Report on Form 20-F filed with the U.S. Securities
and Exchange Commission on April 24, 2003 and other filings made by the Company
with the Commission. Actual results may differ materially from those
anticipated in such forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied therein
may not be realised. The Company undertakes no obligation to update or revise
any forward-looking statements to reflect subsequent events or circumstances.
The interim report will be posted to shareholders on or around 18 September
2003. Copies of the interim report may be obtained from the Company Secretary,
Zenith House, The Hyde, London NW9 6EW.
The third quarter sales for the 13 weeks ending 1 November 2003 are expected to
be announced on Thursday 6 November 2003.
Unaudited interim consolidated profit and loss account
for the periods ended 2 August 2003
13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
2 August 3 August 2 August 3 August 1 February
2003 2002 2003 2002 2003
as as as
restated restated restated
(1) (1) (1)
____________________________________________ _______ _________ __________ __________ __________ __________
Notes #m #m #m #m #m
____________________________________________ _______ _________ __________ __________ __________ __________
Sales 2 324.5 328.0 667.4 682.8 1,608.0
____________________________________________ _______ _________ __________ __________ __________ __________
Operating profit 2,9 26.7 27.4 53.9 55.3 213.9
Net interest payable and similar charges 3,9 (3.0) (3.7) (6.1) (7.7) (14.0)
____________________________________________ _______ _________ __________ __________ __________ __________
Profit on ordinary activities before
taxation 9 23.7 23.7 47.8 47.6 199.9
Tax on profit on ordinary activities 4 (8.4) (8.4) (17.0) (16.9) (70.8)
Profit for the financial period 15.3 15.3 30.8 30.7 129.1
Dividends 6 (5.8) (5.3) (5.8) (5.3) (36.1)
____________________________________________ _______ _________ __________ __________ __________ __________
Retained profit attributable to shareholders 9.5 10.0 25.0 25.4 93.0
____________________________________________ _______ _________ __________ __________ __________ __________
Earnings per share - basic 7 0.9p 0.9p 1.8p 1.8p 7.5p
- diluted 0.9p 0.9p 1.8p 1.8p 7.5p
____________________________________________ _______ _________ __________ __________ __________ __________
All of the above relates to continuing activities.
(1) Restated for the implementation in 2003/04 of FRS 17 - 'Retirement Benefits'
(see note 9).
Unaudited consolidated balance sheet
at 2 August 2003
2 August 3 August 1 February
2003 2002 2003
as restated as restated
(1) (1)
_______________________________________________________________ _____ __________ ___________ ___________
Notes #m #m #m
_______________________________________________________________ _____ __________ ___________ ___________
Fixed assets
Intangible assets 19.7 21.3 19.8
Tangible assets 214.8 206.5 205.5
_______________________________________________________________ _____ __________ ___________ ___________
234.5 227.8 225.3
_______________________________________________________________ _____ __________ ___________ ___________
Current assets
Stocks 562.4 520.1 539.5
Debtors (2) 316.1 309.0 345.9
Cash at bank and in hand 31.1 23.5 89.2
_______________________________________________________________ _____ __________ ___________ ___________
909.6 852.6 974.6
Creditors: amounts falling due within one year (228.4) (221.6) (324.9)
__________ ___________ ___________
Bank loans and overdrafts (25.2) (30.4) (52.0)
Other (203.2) (191.2) (272.9)
__________ ___________ ___________
Net current assets (2) 681.2 631.0 649.7
_______________________________________________________________ _____ __________ ___________ ___________
Total assets less current liabilities 915.7 858.8 875.0
Creditors: amounts falling due after more than one year (183.7) (193.1) (189.1)
__________ ___________ ___________
Bank loans (166.3) (179.0) (171.4)
Other (17.4) (14.1) (17.7)
__________ ___________ ___________
Deferred tax - (3.2) -
Provisions for liabilities and charges (7.2) (6.4) (7.5)
_______________________________________________________________ _____ __________ ___________ ___________
Total net assets 724.8 656.1 678.4
_______________________________________________________________ _____ __________ ___________ ___________
Capital and reserves - equity
Called up share capital 8.6 8.6 8.6
Reserves 716.2 647.5 669.8
_______________________________________________________________ _____ __________ ___________ ___________
Shareholders' funds 8 724.8 656.1 678.4
_______________________________________________________________ _____ __________ ___________ ___________
Unaudited consolidated statement of total recognised gains and losses
for the periods ended 2 August 2003
13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
2 August 3 August 2 August 3 August 1 February
2003 2002 2003 2002 2003
as restated as as
(1) restated restated
(1) (1)
______________________________________________ __________ ___________ __________ __________ __________
#m #m #m #m #m
______________________________________________ __________ ___________ __________ __________ __________
Profit for the financial period 15.3 15.3 30.8 30.7 129.1
Translation differences (1 February 2003: net of 1.7 (35.0) 18.8 (55.7) (143.2)
#0.7m tax credit)
Actuarial loss arising on pension asset (note 9) - - - - (22.3)
______________________________________________ __________ ___________ __________ __________ __________
Total recognised gains and losses relating to the 17.0 (19.7) 49.6 (25.0) (36.4)
period
Prior year adjustment (note 9) - - (18.1) - -
______________________________________________ __________ ___________ __________ __________ __________
Total recognised gains and losses 17.0 (19.7) 31.5 (25.0) (36.4)
______________________________________________ __________ ___________ __________ __________ __________
(1) Restated for the implementation in 2003/04 of FRS 17 - 'Retirement Benefits'
(see note 9).
(2) Debtors and net current assets include amounts recoverable after more than
one year of #5.5m (3 August 2002: #nil, 1 February 2003; #5.3m).
Unaudited consolidated cash flow statement
for the periods ended 2 August 2003
13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
2 August 3 August 2 August 3 August 1 February
2003 2002 2003 2002 2003
as as restated as restated
restated (1) (1)
(1)
_______________________________________________ __________ __________ __________ ___________ ____________
#m #m #m #m #m
_______________________________________________ __________ __________ __________ ___________ ____________
Net cash inflow from operating activities 35.4 30.8 72.4 79.1 182.2
Net cash outflow from returns on investments and (3.2) (4.7) (6.5) (9.0) (16.5)
servicing of finance
Taxation paid (17.9) (13.8) (38.8) (33.5) (57.3)
Net cash outflow for capital expenditure and (14.5) (12.2) (23.9) (24.3) (48.2)
financial investment
Equity dividends paid (30.8) (25.6) (30.8) (25.6) (30.8)
_______________________________________________ __________ __________ __________ ___________ ____________
Cash (outflow)/inflow before use of liquid (31.0) (25.5) (27.6) (13.3) 29.4
resources and financing
Management of liquid resources - decrease/ 40.2 38.0 59.1 47.0 (29.9)
(increase) in bank deposits
Financing - proceeds from issue of shares 2.5 0.1 2.6 2.7 4.3
- repayment of bank loans (10.3) (8.8) (10.4) (11.1) (12.1)
_______________________________________________ __________ __________ __________ ___________ ____________
Increase/(decrease) in cash in the period 1.4 3.8 23.7 25.3 (8.3)
_______________________________________________ __________ __________ __________ ___________ ____________
Reconciliation of net cash flow to movement in net debt
_______________________________________________ __________ __________ __________ ___________ ___________
Increase/(decrease) in cash in the period 1.4 3.8 23.7 25.3 (8.3)
Cash inflow from increase in debt 10.3 8.8 10.4 11.1 12.1
Cash (inflow)/outflow from (decrease)/increase in (40.2) (38.0) (59.1) (47.0) 29.9
liquid resources
_______________________________________________ __________ __________ __________ ___________ ___________
Change in net debt resulting from cash flows (28.5) (25.4) (25.0) (10.6) 33.7
Translation difference 1.5 12.3 0.4 18.6 27.9
_______________________________________________ __________ __________ __________ ___________ ___________
Movement in net debt in the period (27.0) (13.1) (24.6) 8.0 61.6
Opening net debt (137.7) (180.6) (140.1) (201.7) (201.7)
_______________________________________________ __________ __________ __________ ___________ ___________
Closing net debt (164.7) (193.7) (164.7) (193.7) (140.1)
_______________________________________________ __________ __________ __________ ___________ ___________
Reconciliation of operating profit to operating cash flow
_______________________________________________ __________ __________ __________ ___________ ____________
Operating profit 26.7 27.4 53.9 55.3 213.9
Depreciation and amortisation charges 9.4 8.7 18.7 18.0 37.8
Decrease/(increase) in stocks 16.7 8.2 (12.6) (5.9) (44.9)
Decrease/(increase) in debtors 14.7 9.2 37.8 40.0 (26.5)
(Decrease)/increase in creditors (31.9) (22.3) (25.1) (27.7) 1.4
(Decrease)/increase in other provisions (0.2) (0.4) (0.3) (0.6) 0.5
_______________________________________________ __________ __________ __________ ___________ ____________
Net cash inflow from operating activities 35.4 30.8 72.4 79.1 182.2
_______________________________________________ __________ __________ __________ ___________ ____________
(1) Restated for the implementation in 2003/04 of FRS 17 - 'Retirement Benefits'
(see note 9).
Notes to the unaudited interim financial results
for the periods ended 2 August 2003
1. Basis of preparation
These interim financial statements are unaudited and do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. They have
been prepared on a basis which is consistent with the financial statements for
the 52 weeks ended 1 February 2003 except where restatements arise from the
implementation of FRS 17 - 'Retirement Benefits'. The comparative figures for
the 52 weeks ended 1 February 2003 are not the Company's statutory accounts for
that period. Those accounts have been reported on by the Company's auditors
under Section 235 of the Companies Act 1985 and have been delivered to the
Registrar of Companies. The report of the auditors was unqualified and did not
contain a statement under Section 237(2) or Section 237(3) of the Companies Act
1985.
2. Segmental information
13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
2 August 3 August 2 August 3 August 1 February
2002 2003 2002 2003
2003 as as restated as restated
restated (1) (1)
(1)
_____________________________________________ __________ __________ __________ ___________ ____________
#m #m #m #m #m
_____________________________________________ __________ __________ __________ ___________ ____________
Sales by origin and destination
UK, Channel Islands & Republic of Ireland 99.9 96.2 192.5 183.7 473.6
US 224.6 231.8 474.9 499.1 1,134.4
_____________________________________________ __________ __________ __________ ___________ ____________
324.5 328.0 667.4 682.8 1,608.0
_____________________________________________ __________ __________ __________ ___________ ____________
Operating profit/(loss)
UK, Channel Islands & Republic of Ireland
- Trading (a) 5.4 4.4 7.8 6.2 64.7
- Group central costs (b) (1.4) (1.3) (2.8) (2.7) (6.0)
_____________________________________________ __________ __________ __________ ___________ ____________
4.0 3.1 5.0 3.5 58.7
US 22.7 24.3 48.9 51.8 155.2
_____________________________________________ __________ __________ __________ ___________ ____________
26.7 27.4 53.9 55.3 213.9
_____________________________________________ __________ __________ __________ ___________ ____________
The Group's results derive from one business segment - the retailing of
jewellery, watches and gifts.
(a) UK trading profit for the 26 weeks ended 2 August 2003 includes a charge of
#1.3m relating to pension net service cost arising from the adoption in 2003/04
of FRS 17 - 'Retirement Benefits' (26 weeks ended 3 August 2002: #1.2m, 52 weeks
ended 1 February 2003: #2.3m).
(b) Group central costs for the 52 weeks ended 1 February 2003 include a charge
of #0.5m relating to an increase in the provision against an onerous lease of a
dormant Group property (26 weeks ended 2 August 2003: #nil, 26 weeks ended 3
August 2002: #nil).
3. Net interest payable and similar charges
13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
2 August 3 August 2 August 3 August 1 February
2003 2002 2003 2002 2003
as restated as restated as restated
(1) (1) (1)
_____________________________________________ ___________ ___________ ___________ ___________ ___________
#m #m #m #m #m
Net interest payable (3.2) (4.4) (6.5) (9.0) (16.5)
FRS 17 - net interest credit 0.2 0.7 0.4 1.3 2.5
_____________________________________________ ___________ ___________ ___________ ___________ ___________
(3.0) (3.7) (6.1) (7.7) (14.0)
_____________________________________________ ___________ ___________ ___________ ___________ ___________
4. Taxation
The net taxation charges in the profit and loss account for the 13 weeks and 26
weeks ended 2 August 2003 have been based on the anticipated effective taxation
rate for the 52 weeks ending 31 January 2004.
(1) Restated for the implementation in 2003/04 of FRS 17 - 'Retirement Benefits'
(see note 9).
Notes to the unaudited interim financial results
for the periods ended 2 August 2003
5. Translation differences
The exchange rates used for the translation of US dollar transactions and
balances in these interim statements are as follows:
2 August 3 August 1 February
2003 2002 2003
_________________________________________________________________ _________ _________ _________
Profit and loss account (average rate) 1.61 1.46 1.53
Balance sheet (closing rate) 1.60 1.57 1.64
_________________________________________________________________ _________ _________ _________
The effect of restating the balance sheet at 3 August 2002 to the exchange rates
ruling at 2 August 2003 would be to decrease net debt by #3.7m to #190.1m.
Restating the profit and loss account would decrease the operating profit for
the 26 weeks ended 3 August 2002 by #4.8m to #50.5m and the profit before
taxation for the 26 weeks ended 3 August 2002 by #4.0m to #43.6m.
6. Dividend
The dividend of 0.341p per share will be paid on 7 November 2003 to shareholders
on the register of members at close of business on 10 October 2003.
7. Earnings per share
13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
2 August 3 August 2 August 3 August 1 February
2003 2002 2003 2002 2003
as as as
restated(1) restated(1) restated(1)
_________________________________________________ ___________ ___________ ___________ ___________ ___________
#m #m #m #m #m
_________________________________________________ ___________ ___________ ___________ ___________ ___________
Profit attributable to shareholders 15.3 15.3 30.8 30.7 129.1
_________________________________________________ ___________ ___________ ___________ ___________ ___________
Weighted average number of shares in issue 1,716.1 1,711.3 1,715.0 1,709.6 1,710.7
(million)
Dilutive effect of share options (million) 14.7 18.4 11.9 19.4 16.4
_________________________________________________ ___________ ___________ ___________ ___________ ___________
Diluted weighted average number of shares 1,730.8 1,729.7 1,726.9 1,729.0 1,727.1
(million)
_________________________________________________ ___________ ___________ ___________ ___________ ___________
Earnings per share - basic 0.9p 0.9p 1.8p 1.8p 7.5p
- diluted 0.9p 0.9p 1.8p 1.8p 7.5p
_________________________________________________ ___________ ___________ ___________ ___________ ___________
The number of shares in issue at 2 August 2003 was 1,718,704,582 (3 August 2002:
1,711,344,751 shares; 1 February 2003: 1,713,768,396 shares).
8. Changes in shareholders' equity
Share Share Revaluation Special Profit and Total
capital premium reserve reserves loss
account account
_______________________________________ _________ ___________ ___________ ___________ ___________ ________
#m #m #m #m #m #m
_______________________________________ _________ ___________ ___________ ___________ ___________ ________
Balance at 1 February 2003 8.6 53.9 3.1 101.7 529.2 696.5
Prior year adjustment (note 9) - - - - (18.1) (18.1)
_______________________________________ _________ ___________ ___________ ___________ ___________ ________
As restated 8.6 53.9 3.1 101.7 511.1 678.4
Retained profit - - - - 25.0 25.0
Share options exercised - 2.6 - - - 2.6
Translation differences - - - (10.2) 29.0 18.8
_______________________________________ _________ ___________ ___________ ___________ ___________ ________
Balance at 2 August 2003 8.6 56.5 3.1 91.5 565.1 724.8
_______________________________________ _________ ___________ ___________ ___________ ___________ ________
(1) Restated for the implementation in 2003/04 of FRS 17 - 'Retirement Benefits'
(see note 9).
Notes to the unaudited interim financial results
for the periods ended 2 August 2003
9. Prior year adjustment
It was previously the Company's policy, in compliance with SSAP 24, to spread
the pension valuation surplus arising under its UK defined benefit pension
scheme ('the Scheme') over the average service life of the employees. In
compliance with this standard, a pension scheme prepayment of #19.1m was
included in the balance sheet at 1 February 2003 within debtors falling due
after more than one year. An associated deferred tax liability of #5.7m was also
carried on the balance sheet at 1 February 2003.
The adoption of FRS 17 - 'Retirement Benefits' has led to the write off of the
#19.1m pension asset previously recognised under SSAP 24 together with provision
for the net deficit of #6.7m in the Scheme as at 1 February 2003. This #6.7m net
deficit has been classified as a creditor falling due after more than one year.
The #5.7m deferred tax liability associated with the SSAP 24 pension asset has
been written back and a #2.0m deferred tax asset has been recognised in respect
of the net deficit provided for under FRS 17. The total net deficit of #18.1m
arising from the adoption of FRS 17 has been accounted for as a prior year
adjustment charged directly to shareholders' funds.
The consolidated statement of total recognised gains and losses for the 52 weeks
ended 1 February 2003 has been restated to include the actuarial loss on pension
assets arising during that period net of deferred tax, calculated in accordance
with FRS 17. This amounted to #22.3m.
The profit and loss accounts for the 13 weeks and for the 26 weeks ended 3
August 2002 and for the 52 weeks ended 1 February 2003 have been restated to
include the following items, reflecting the requirements of FRS 17.
13 weeks 26 weeks 52 weeks
ended ended ended
3 August 3 August 1 February
2002 2002 2003
______________________________________________________________ ______________ ______________ ______________
#m #m #m
______________________________________________________________ ______________ ______________ ______________
Operating profit:
As originally reported 28.0 56.5 216.2
- Net service cost (0.6) (1.2) (2.3)
______________________________________________________________ ______________ ______________ ______________
As restated 27.4 55.3 213.9
______________________________________________________________ ______________ ______________ ______________
Net interest payable and similar charges:
As originally reported (4.4) (9.0) (16.5)
- Expected return on Scheme assets 1.8 3.6 7.1
- Interest on Scheme liabilities (1.1) (2.3) (4.6)
______________________________________________________________ ______________ ______________ ______________
As restated (3.7) (7.7) (14.0)
______________________________________________________________ ______________ ______________ ______________
Profit on ordinary activities before taxation:
As originally reported 23.6 47.5 199.7
- Net impact of FRS 17 adjustments 0.1 0.1 0.2
______________________________________________________________ ______________ ______________ ______________
As restated 23.7 47.6 199.9
______________________________________________________________ ______________ ______________ ______________
Notes to the unaudited interim financial results
for the periods ended 2 August 2003
10. Impact of constant exchange rates
The Company has historically used constant exchange rates to compare
period-to-period changes in certain financial data. This is referred to as 'at
constant exchange rates' throughout this release and constitutes a 'non-GAAP
financial measure'. The Company considers this to be a useful measure for
analysing and explaining changes and trends in the Company's results. The impact
of the re-calculation of sales, operating profit and profit before tax at
constant exchange rates, including a reconciliation to the Group's most directly
comparable GAAP results, is analysed below.
H1 2003 H1 2002 Growth at H1 2002 H1 2002 Growth at
reported reported actual impact of at constant
(1) exchange exchange constant exchange
rate rate exchange rates
movement rates(1) (non-GAAP)
(non-GAAP)
________________________________________ __________ __________ ________ __________ __________ _________
#m #m % #m #m %
________________________________________ __________ __________ ________ __________ __________ _________
Sales by origin and destination
UK, Channel Islands & Republic of Ireland 192.5 183.7 4.8 - 183.7 4.8
US 474.9 499.1 (4.9) (46.5) 452.6 4.9
________________________________________ __________ __________ ________ __________ __________ _________
667.4 682.8 (2.3) (46.5) 636.3 4.9
________________________________________ __________ __________ ________ __________ __________ _________
Operating profit/(loss)
UK, Channel Islands & Republic of Ireland
- Trading 7.8 6.2 25.8 - 6.2 25.8
- Group central costs (2.8) (2.7) n/a - (2.7) n/a
________________________________________ __________ __________ ________ __________ __________ _________
5.0 3.5 n/a - 3.5 n/a
US 48.9 51.8 (5.6) (4.8) 47.0 4.1
________________________________________ __________ __________ ________ __________ __________ _________
53.9 55.3 (2.5) (4.8) 50.5 6.8
________________________________________ __________ __________ ________ __________ __________ _________
Profit before tax
________________________________________ __________ __________ ________ __________ __________ _________
47.8 47.6 0.4 (4.0) 43.6 9.6
________________________________________ __________ __________ ________ __________ __________ _________
(1) Restated for the implementation in 2003/04 of FRS 17 - 'Retirement Benefits'
(see note 9).
Independent review report by KPMG Audit Plc to Signet Group plc
Introduction
We have been engaged by the Company to review the financial information set out
on pages 6 to 12 and we have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information. This report is made solely to
the company in accordance with the terms of our engagement to assist the company
in meeting the requirements of the Listing Rules of the Financial Services
Authority. Our review has been undertaken so that we might state to the company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where they
are to be changed in the next annual accounts in which case any changes, and the
reasons for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of Group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly, we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 13 weeks and 26
weeks ended 2 August 2003.
KPMG Audit Plc
Chartered Accountants
London
3 September 2003
Unaudited reconciliation of UK GAAP to US GAAP
for the periods ended 2 August 2003
Estimated effect on profit for the financial periods of differences between UK
GAAP and US GAAP
13 weeks 13 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended
2 August 3 August 2 August 3 August 1 February
2003 2002 2003 2002 2003
as restated as restated as restated
(1) (1) (1)
___________________________________________ __________ ___________ __________ ___________ ___________
#m #m #m #m #m
___________________________________________ __________ ___________ __________ ___________ ___________
Profit for the financial period in
accordance with UK GAAP 15.3 15.3 30.8 30.7 129.1
US GAAP adjustments:
Goodwill amortisation and write-offs 0.3 0.3 0.6 0.6 1.2
Sale and leaseback transactions 0.1 0.2 0.3 0.4 0.8
Extended service plan revenues (0.3) (0.5) (0.5) (1.0) (3.5)
Pensions (0.5) (0.2) (1.0) (0.3) (0.5)
Depreciation of properties - - - - 0.2
Stock compensation 0.3 2.6 (1.4) 1.2 1.3
___________________________________________ __________ ___________ __________ ___________ ___________
US GAAP adjustments before taxation (0.1) 2.4 (2.0) 0.9 (0.5)
Taxation - (0.2) 0.9 (0.2) (0.3)
___________________________________________ __________ ___________ __________ ___________ ___________
US GAAP adjustments after taxation (0.1) 2.2 (1.1) 0.7 (0.8)
___________________________________________ __________ ___________ __________ ___________ ___________
Net income attributable to shareholders in
accordance with US GAAP 15.2 17.5 29.7 31.4 128.3
___________________________________________ __________ ___________ __________ ___________ ___________
Income per ADS in accordance with US GAAP:
- basic 26.6p 30.7p 52.0p 55.1p 225.0p
- diluted 26.3p 30.4p 51.6p 54.5p 222.9p
Weighted average number of ADS outstanding
(million):
- basic 57.2 57.0 57.2 57.0 57.0
- diluted 57.7 57.7 57.6 57.6 57.6
___________________________________________ __________ ___________ __________ ___________ ___________
Estimated effect on shareholders' funds of differences between UK GAAP and US
GAAP
2 August 3 August 1 February
2003 2002 2003
as as
restated restated
(1) (1)
_____________________________________________________________________________ __________ __________ __________
#m #m #m
_____________________________________________________________________________ __________ __________ __________
Shareholders' funds in accordance with UK GAAP 724.8 656.1 678.4
US GAAP adjustments:
Goodwill in respect of acquisitions (gross) 541.3 549.5 531.2
Adjustment to goodwill (66.1) (67.4) (64.5)
Accumulated goodwill amortisation (164.9) (168.3) (162.6)
Sale and leaseback transactions (9.4) (10.1) (9.7)
Extended service plan revenues (17.5) (14.8) (16.6)
Pensions 10.9 3.1 12.0
Depreciation of properties (2.5) (2.7) (2.5)
Revaluation of properties (3.1) (3.0) (3.1)
Dividends 5.8 5.3 30.8
_____________________________________________________________________________ __________ __________ __________
US GAAP adjustments before taxation 294.5 291.6 315.0
Taxation 2.4 7.0 1.9
_____________________________________________________________________________ __________ __________ __________
US GAAP adjustments after taxation 296.9 298.6 316.9
_____________________________________________________________________________ __________ __________ __________
Shareholders' funds in accordance with US GAAP 1,021.7 954.7 995.3
_____________________________________________________________________________ __________ __________ __________
(1) Restated under UK GAAP for the implementation in 2003/04 of FRS 17 - '
Retirement Benefits' (see note 9).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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