10th Jun 2005 07:30
Signet Group PLC10 June 2005 Embargoed until 7.30 a.m. (BST)Signet Group plc (LSE: SIG, NYSE: SIG) 10 June 2005 10% INCREASE IN SIGNET'S 1ST QUARTER EARNINGS Signet Group plc (LSE: SIG and NYSE: SIG), the world's largest speciality retailjeweller, today announces its first quarter results for the 13 week period from30 January to 30 April 2005. These results are reported under InternationalFinancial Reporting Standards ('IFRS'), see note 8 for details. Group Group profit before tax was £27.9 million (Q1 2004/05: £26.1 million), up by9.4% at constant exchange rates (see note 7 for reconciliation). On a reportedbasis the increase was 6.9% reflecting a weakening of the average US dollar rateto £1/$1.89 from £1/$1.84 in the comparable period last year. Like for likesales rose by 3.3%. Total sales were £369.2 million (Q1 2004/05: £351.9million), up by 7.0% at constant exchange rates and by 4.9% on a reported basis. Operating profit at £29.5 million (Q1 2004/05: £28.2 million) increased by 7.3%at constant exchange rates and by 4.6% on a reported basis. Operating margin wasunchanged at 8.0%, while gross margin was up slightly compared to the samequarter last year. The tax rate was 34.4% (Q1 2004/05: 36.4%). Earnings pershare rose by 10.0% to 1.1p (Q1 2004/05: 1.0p). United States (circa 70% of Group annual sales) Operating profit at £31.4 million (Q1 2004/05: £27.1 million) was up by 18.9% atconstant exchange rates and by 15.9% on a reported basis. The operating marginincreased to 11.3% (Q1 2004/05: 10.6%), principally due to operating leveragefrom the increase in like for like sales. Like for like sales rose by 7.1%, although up against particularly strong prioryear comparatives. Total sales increased by 11.6% at constant exchange rates andby 8.6% on a reported basis to £277.9 million (Q1 2004/05: £255.8 million).Gross margin was broadly in line with the first quarter in 2004/05. Thisreflected anticipated mix changes and commodity cost increases offset by a rangeof management initiatives, including selective action on selling prices. The baddebt ratio was comparable to the first quarter of last year. United Kingdom (circa 30% of Group annual sales) As previously indicated, the period saw a marked deterioration in the generalretail environment. Consequently like for like sales fell by 6.2% resulting inan operating loss of £0.4 million (Q1 2004/05: profit £2.6 million). Total saleswere £91.3 million (Q1 2004/05: £96.1 million) and gross margin showed anincrease. H.Samuel's like for like sales were down 6.4% and those of ErnestJones down 6.0%. Both chains saw a further increase of diamonds in the salesmix. Group Costs, Financing Costs and Net Debt Group costs were unchanged at £1.5 million. Financing costs were £1.6 million(Q1 2004/05: £2.1 million). Net debt at 30 April 2005 was £76.0 million (1 May2004: £68.2 million). Comment Terry Burman, Group Chief Executive, commented: "We are very pleased with theincrease in Group earnings of 10% given the present challenging tradingconditions in the UK. This underlines the benefit of operating on both sides ofthe Atlantic with a 70% US / 30% UK sales mix. The general retail environment in the UK remained very difficult throughout thequarter. The trading pattern was similar in both H.Samuel and Ernest Jones. Weare continuing to adhere to our proven strategy, although we will ensure thatcosts, gross margins and cash flow remain tightly managed. The US business performed strongly throughout the period with like for likesales up by 7.1%. Operating profit increased 18.9% at constant exchange rates.The division again out-performed its main competition and gained further marketshare. Kay continued to build on its position as the leading US specialityretail jewellery brand. Jared, our off-mall destination chain had a particularlystrong quarter." 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 Pamela Small, Brunswick +44 (0) 20 7404 5959 A conference call for all interested parties will take place today at 2.00 p.m.BST. European dial-in: +44 (0) 20 7365 1850 European 48 hr replay: +44 (0) 20 7784 1024 Access code: 4956717# US dial-in: +1 718 354 1172 US 48 hr replay: +1 718 354 1112 Access code: 4956717# The Annual General Meeting will take place at 11.00 a.m. today. The secondquarter sales performance for the 13 weeks ending 30 July 2005 is expected to beannounced on Thursday 4 August 2005. Signet operated 1,769 speciality retail jewellery stores at 30 April 2005; theseincluded 1,170 stores in the US, where the Group trades as "Kay Jewelers","Jared The Galleria Of Jewelry" and under a number of regional names. At thatdate Signet operated 599 stores in the UK, where the Group trades as "H.Samuel","Ernest Jones" and "Leslie Davis". Further information on Signet is available atwww.signetgroupplc.com. This release includes statements which are forward-looking statements within themeaning of the Private Securities Litigation Reform Act of 1995. Thesestatements, based upon management's beliefs as well as on assumptions made byand data currently available to management, appear in a number of placesthroughout 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 Group operates. Our use of the words"expects," "intends," "anticipates," "estimates," "may," "forecast,""objective," "plan" or "target," and other similar expressions are intended toidentify forward-looking statements. These forward-looking statements are notguarantees of future performance and are subject to a number of risks anduncertainties, including but not limited to general economic conditions, themerchandising, pricing and inventory policies followed by the Group, thereputation of the Group, the level of competition in the jewellery sector, theprice and availability of diamonds, gold and other precious metals, seasonalityof the Group's business and financial market risk. For a discussion of these and other risks and uncertainties which could causeactual results to differ materially, see the "Risk and Other Factors" section ofthe Company's 2004/05 Annual Report on Form 20-F filed with the U.S. Securitiesand Exchange Commission on May 3, 2005 and other filings made by the Companywith the Commission. Actual results may differ materially from those anticipatedin such forward-looking statements even if experience or future changes make itclear that any projected results expressed or implied therein may not berealised. The Company undertakes no obligation to update or revise anyforward-looking statements to reflect subsequent events or circumstances. SIGNET GROUP plc Unaudited interim consolidated income statementfor the 13 weeks ended 30 April 2005 13 weeks 13 weeks 52 weeks ended ended ended 30 April 1 May 29 January 2005 2004 2005------------------------------ ----- ------- ------- ------- Notes £m £m £m------------------------------ ----- ------- ------- ------- Sales 2,7 369.2 351.9 1,615.5 Cost of sales (333.0) (316.2) (1,371.8)------------------------------ ----- ------- ------- -------Gross profit 36.2 35.7 243.7Administrative expenses (18.4) (17.3) (69.8)Other operating income 11.7 9.8 38.6------------------------------ ----- ------- ------- -------Operating profit 2,7 29.5 28.2 212.5Financing costs 3 (1.6) (2.1) (8.6)------------------------------ ----- ------- ------- -------Profit before tax 7 27.9 26.1 203.9Taxation 4 (9.6) (9.5) (69.1)------------------------------ ----- ------- ------- -------Profit for the financial period 18.3 16.6 134.8------------------------------ ----- ------- ------- ------- Earnings per share - basic 6 1.1p 1.0p 7.8p- diluted 1.1p 1.0p 7.8p------------------------------ ----- ------- ------- ------- All of the above relates to continuing activities. Unaudited consolidated balance sheetat 30 April 2005 30 April 1 May 29 January 2005 2004 2005--------------------------------- ------- ------- ------- £m £m £m--------------------------------- ------- ------- ------- AssetsNon-current assetsIntangible assets 17.1 18.7 17.4Property, plant and equipment 227.5 209.3 225.2Other receivables 12.8 11.6 11.6Retirement benefit asset - 1.7 -Deferred tax assets 12.4 34.7 12.4--------------------------------- ------- ------- ------- 269.8 276.0 266.6--------------------------------- ------- ------- -------Current assetsInventories 601.9 573.7 577.9Trade and other receivables 329.1 305.3 359.4Cash and cash equivalents 80.9 113.5 102.4--------------------------------- ------- ------- ------- 1,011.9 992.5 1,039.7--------------------------------- ------- ------- ------- Total assets 1,281.7 1,268.5 1,306.3--------------------------------- ------- ------- ------- LiabilitiesCurrent liabilitiesShort-term borrowings (25.4) (29.7) (53.1)Trade and other payables (170.6) (180.3) (161.3)Deferred income (48.4) (47.7) (55.5)Current tax (29.0) (47.2) (43.8)--------------------------------- ------- ------- ------- (273.4) (304.9) (313.7)--------------------------------- ------- ------- -------Non-current liabilitiesBank loans (131.4) (150.3) (132.8)Trade and other payables (13.3) (11.7) (12.3)Deferred income (73.3) (67.1) (70.6)Provisions (5.7) (6.3) (5.8)Retirement benefit obligation (1.9) - (1.9)--------------------------------- ------- ------- ------- (225.6) (235.4) (223.4)--------------------------------- ------- ------- ------- Total liabilities (499.0) (540.3) (537.1)--------------------------------- ------- ------- ------- --------------------------------- ------- ------- -------Net assets 782.7 728.2 769.2--------------------------------- ------- ------- ------- EquityCapital and reserves attributable to equityshareholdersCalled up share capital 8.7 8.7 8.7Share premium 68.3 62.5 68.0Other reserves 156.7 130.1 152.3Retained earnings 549.0 526.9 540.2--------------------------------- ------- ------- -------Total equity 782.7 728.2 769.2--------------------------------- ------- ------- ------- Unaudited consolidated statement of recognised income and expensefor the 13 weeks ended 30 April 2005 13 weeks 13 weeks 52 weeks ended ended ended 30 April 1 May 29 January 2005 2004 2005--------------------------------- ------- ------- ------- £m £m £m--------------------------------- ------- ------- ------- Profit for the financial period 18.3 16.6 134.8Translation differences (8.8) 25.9 (32.6)Losses on cash flow hedges (1.7) - -Actuarial loss on retirement benefitscheme - - (3.9)--------------------------------- ------- ------- -------Total recognised income and expense forthe period 7.8 42.5 98.3--------------------------------- ------- ------- ------- Unaudited changes in total equityfor the 13 weeks ended 30 April 2005 Share Share Revaluation Special Reserve for own Retained Total capital premium reserve reserves shares earnings ------------------ ------ ------ ------ ------ ------ ------ ------ £m £m £m £m £m £m £m------------------ ------ ------ ------ ------ ------ ------ ------ Balance at 29January 2005 8.7 68.0 4.3 155.9 (7.9) 540.2 769.2Recognised incomeand expense:- Profit forthe financialperiod - - - - - 18.3 18.3- Losses oncash flowhedges - - - - - (1.7) (1.7)- Translationdifferences - - - 3.7 - (8.8) (5.1)Equity-settledtransactions -net of tax - - - - - 1.0 1.0Share optionsexercised - 0.3 - - 0.7 - 1.0------------------ ------ ------ ------ ------ ------ ------ ------Balance at 30April 2005 8.7 68.3 4.3 159.6 (7.2) 549.0 782.7------------------ ------ ------ ------ ------ ------ ------ ------ Unaudited changes in total equityfor the 13 weeks ended 1 May 2004 Share Share Revaluation Special Reserve for own Retained Total capital premium reserve reserves shares earnings ------------------ ------ ------ ------ ------ ------ ------ ------ £m £m £m £m £m £m £m------------------ ------ ------ ------ ------ ------ ------ ------ Balance at 31January 2004 8.6 60.7 3.1 142.2 - 483.2 697.8Recognised incomeand expense:- Profit forthe financialperiod - - - - - 16.6 16.6- Translationdifferences - - - (10.4) - 25.9 15.5Equity-settledtransactions -net of tax - - - - - 1.2 1.2Share optionsexercised 0.1 1.8 - - - - 1.9Purchase ofown shares(1) - - - - (4.8) - (4.8)------------------ ------ ------ ------ ------ ------ ------ ------Balance at 1May 2004 8.7 62.5 3.1 131.8 (4.8) 526.9 728.2------------------ ------ ------ ------ ------ ------ ------ ------ (1) Shares purchased to satisfy the exercise of share options granted toemployees of Signet Group plc and its subsidiaries. Unaudited consolidated cash flow statementfor the 13 weeks ended 30 April 2005 13 weeks 13 weeks 52 weeks ended ended ended 30 April 1 May 29 January 2005 2004 2005--------------------------------- ------- ------- ------- £m £m £m--------------------------------- ------- ------- -------Cash flows from operating activities: Profit before tax 27.9 26.1 203.9Depreciation charges 10.1 8.9 41.3Financing costs 1.6 2.1 8.6Increase in inventories (28.7) (20.8) (52.3)Decrease/(increase) in trade and otherreceivables 24.6 28.6 (44.5)Increase in payables and deferred income 8.4 3.5 16.5Other non-cash movements (0.1) 1.1 (0.9)--------------------------------- ------- ------- -------Cash generated from operations 43.8 49.5 172.6Interest paid (2.6) (3.2) (11.6)Taxation paid (23.1) (16.7) (56.5)--------------------------------- ------- ------- -------Net cash from operating activities 18.1 29.6 104.5--------------------------------- ------- ------- ------- Investing activities:Interest received 1.0 0.8 1.8Proceeds from sale of plant and equipment - - 0.2Purchase of plant and equipment (13.8) (13.0) (70.5)--------------------------------- ------- ------- -------Cash flows from investing activities (12.8) (12.2) (68.5)--------------------------------- ------- ------- ------- Financing activities:Proceeds from issue of share capital 0.3 1.8 7.3Purchase of own shares - (4.8) (9.5)Repayment of borrowings (2.3) (0.8) (8.1)Dividends paid - - (43.8)--------------------------------- ------- ------- -------Cash flows from financing activities (2.0) (3.8) (54.1)--------------------------------- ------- ------- ------- Reconciliation of movement in cash and cash equivalents: Net increase/(decrease) in cash and cash equivalents 3.3 13.6 (18.1)Opening cash and cash equivalents 59.6 76.9 76.9Translation difference 0.4 1.7 0.8--------------------------------- ------- ------- -------Closing cash and cash equivalents 63.3 92.2 59.6--------------------------------- ------- ------- ------- Reconciliation of cash flows to movement in net debt:(1) Change in net debt resulting from cash flows 5.6 14.4 (10.0)Translation difference 1.9 (2.7) 6.4--------------------------------- ------- ------- -------Movement in net debt in the period 7.5 11.7 (3.6)Opening net debt (83.5) (79.9) (79.9)--------------------------------- ------- ------- -------Closing net debt (76.0) (68.2) (83.5)--------------------------------- ------- ------- ------- (1) Net debt represents cash and cash equivalents, short-term borrowings andbank loans. Notes to the unaudited interim financial resultsfor the 13 weeks ended 30 April 2005 1. Basis of preparation These interim financial statements have been prepared on the basis ofInternational Accounting Standards and International Financial ReportingStandards (collectively "IFRS") expected to be endorsed by the European Union("EU") and available for use by European companies for accounting periodsbeginning on or after 1 January 2005. IFRS is subject to review and possibleamendment or interpretive guidance and therefore subject to change. Details ofthe accounting policies applied are set out in the Group's Annual Report andAccounts for the year ended 29 January 2005, as amended for the adoption ofIFRS, details of which are given in Note 8 below. These policies assume that theamendments to IAS 19 'Employee Benefits', allowing actuarial gains and losses tobe recognised in full through reserves, will be endorsed by the EU. These interim financial statements are unaudited and do not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Thecomparative figures for the 52 weeks ended 29 January 2005 are not the Company'sstatutory accounts for that period. Those accounts, which were prepared under UKGAAP, have been reported on by the Company's auditors and will be delivered tothe Registrar of Companies following the Company's Annual General Meeting. Thereport of the auditors was unqualified and did not contain a statement underSection 237(2) or Section 237(3) of the Companies Act 1985. 2. Segment information 13 weeks 13 weeks 52 weeks ended ended ended 30 April 1 May 29 January 2005 2004 2005-------------------------------- ------- ------- ------- £m £m £m-------------------------------- ------- ------- ------- Sales by origin and destinationUK, Channel Islands & Republic of Ireland 91.3 96.1 507.7US 277.9 255.8 1,107.8-------------------------------- ------- ------- ------- 369.2 351.9 1,615.5-------------------------------- ------- ------- ------- Operating profit/(loss)UK, Channel Islands & Republic ofIreland- Trading (0.4) 2.6 76.9- Group central costs (1.5) (1.5) (6.8)-------------------------------- ------- ------- ------- (1.9) 1.1 70.1US 31.4 27.1 142.4-------------------------------- ------- ------- ------- 29.5 28.2 212.5-------------------------------- ------- ------- ------- The Group's results derive from one business segment - the retailing ofjewellery, watches and gifts. 3. Financing costs 13 weeks 13 weeks 52 weeks ended ended ended 30 April 1 May 29 January 2005 2004 2005-------------------------------- ------- ------- ------- £m £m £m-------------------------------- ------- ------- -------Interest payable (2.6) (3.2) (11.6)Pensions financing credit - 0.3 1.2Interest receivable 1.0 0.8 1.8-------------------------------- ------- ------- ------- (1.6) (2.1) (8.6)-------------------------------- ------- ------- ------- Notes to the unaudited interim financial resultsfor the 13 weeks ended 30 April 2005 4. Taxation The net taxation charge in the profit and loss account for the 13 weeks to 30April 2005 has been based on the anticipated effective taxation rate for the 52weeks ending 28 January 2006. 5. Translation differences The exchange rates used for the translation of US dollar transactions andbalances in these interim statements are as follows: 30 April 1 May 29 January 2005 2004 2005-------------------------------- ------- ------- ------- Profit and loss account (average rate) 1.89 1.84 1.86Balance sheet (closing rate) 1.91 1.77 1.89-------------------------------- ------- ------- ------- The effect of restating the balance sheet at 1 May 2004 to the exchange ratesruling at 30 April 2005 would be to decrease net debt by £6.8 million to £61.4million. Restating the profit and loss account would decrease the pre-tax profitfor the 13 weeks ended 1 May 2004 by £0.6 million to £25.5 million. 6. Earnings per share 13 weeks 13 weeks 52 weeks ended ended ended 30 April 1 May 29 January 2005 2004 2005-------------------------------- ------- ------- ------- £m £m £m-------------------------------- ------- ------- ------- Profit attributable to shareholders 18.3 16.6 134.8-------------------------------- ------- ------- ------- Weighted average number of shares inissue (million) 1,735.9 1,727.6 1,731.6Dilutive effect of share options(million) 6.4 14.1 6.0-------------------------------- ------- ------- -------Diluted weighted average number of shares(million) 1,742.3 1,741.7 1,737.6-------------------------------- ------- ------- -------Earnings per share - basic 1.1p 1.0p 7.8p- diluted 1.1p 1.0p 7.8p-------------------------------- ------- ------- ------- The number of shares in issue at 30 April 2005 was 1,736,181,823 (1 May 2004:1,730,211,626 shares, 29 January 2005: 1,735,615,152 shares). Notes to the unaudited interim financial resultsfor the 13 weeks ended 30 April 2005 7. Impact of constant exchange rates The Group has historically used constant exchange rates to compareperiod-to-period changes in certain financial data. This is referred to as 'atconstant exchange rates' throughout this release. The Group considers this auseful measure for analysing and explaining changes and trends in the Group'sresults. The impact of the re-calculation of sales, operating profit, profitbefore tax and net debt at constant exchange rates, including a reconciliationto the Group's GAAP results, is analysed below. 13 weeks ended 30 13 weeks 13 weeks Growth at Impact of At constant Growth atApril 2005 ended ended actual exchange rate exchange constant 30 April 1 May exchange movement rates exchange 2005 2004 rates (non-GAAP) rates (non-GAAP)------------------ ------- ------- ------- ------- ------- ------- £m £m % £m £m %------------------ ------- ------- ------- ------- ------- ------- Sales by originand destinationUK, ChannelIslands &Republic ofIreland 91.3 96.1 -5.0% - 96.1 -5.0%US 277.9 255.8 8.6% (6.8) 249.0 11.6%------------------ ------- ------- ------- ------- ------- ------- 369.2 351.9 4.9% (6.8) 345.1 7.0%------------------ ------- ------- ------- ------- ------- ------- Operating profit/(loss)UK, ChannelIslands & Republicof Ireland- Trading (0.4) 2.6 n/a - 2.6 n/a- Groupcentral costs (1.5) (1.5) - - (1.5) ------------------- ------- ------- ------- ------- ------- ------- (1.9) 1.1 n/a - 1.1 n/aUS 31.4 27.1 15.9% (0.7) 26.4 18.9%------------------ ------- ------- ------- ------- ------- ------- 29.5 28.2 4.6% (0.7) 27.5 7.3%------------------ ------- ------- ------- ------- ------- ------- Profit before tax 27.9 26.1 6.9% (0.6) 25.5 9.4%------------------ ------- ------- ------- ------- ------- ------- At 30 April 2005 30 April 1 May Impact of At constant 2005 2004 exchange rate exchange rates as reported movement (non-GAAP)---------------------------- ------- ------- ------- ------- £m £m £m £m---------------------------- ------- ------- ------- ------- Net debt (76.0) (68.2) 6.8 (61.4)---------------------------- ------- ------- ------- ------- 8. Adoption of IFRS (i) Revised accounting policies adopted For financial years commencing on or after 1 January 2005 the Group is requiredto report in accordance with IFRS as adopted by the EU. The Group will thereforenow prepare its results under IFRS, commencing with the 13 weeks to 30 April2005. This announcement contains comparative information for the 13 weeks ended1 May 2004 and for the 52 weeks ended 29 January 2005 that has been preparedunder IFRS. IFRS is subject to review and possible amendment or interpretiveguidance and therefore subject to change. Revised accounting policies adopted asa result of the application of IFRS are given below. All other accountingpolicies applied are consistent with those disclosed in the Annual Report &Accounts for the 52 weeks ended 29 January 2005. These changes have no impact on the Group's historical or future cash flows orthe timing of cash received and paid. The rules for the first time adoption of IFRS are set out in IFRS 1 "First-timeAdoption of International Reporting Standards". In general, a company isrequired to determine its IFRS accounting policies and apply theseretrospectively to determine its opening balance sheet under IFRS. A number ofexceptions from retrospective application are allowed to assist companies asthey move to reporting under IFRS. Where the Group has taken advantage of theexemptions they are noted below. Notes to the unaudited interim financial resultsfor the 13 weeks ended 30 April 2005 8. Adoption of IFRS (continued) IFRS 2 Share-based PaymentsIn accordance with IFRS 2, the Group recognises a charge to income in respect ofthe fair value of outstanding employee share options. The fair value iscalculated using the binomial valuation model and charged to income over therelevant option vesting period. The optional transitional arrangements, whichallow companies to apply IFRS 2 fully retrospectively to all options granted butnot fully vested at the relevant reporting date, have been used. IFRS 3 Business CombinationsGoodwill is carried at cost with impairment reviews performed annually and whenthere are indications that the carrying value may not be recoverable. Under thetransitional arrangements the Group applies IFRS 3 prospectively from thetransition date. As a result, all prior business combination accounting isfrozen at the transition date of 31 January 2004, and the value of goodwill isalso frozen at that date. IAS 10 Proposed DividendDividends are not accrued for until approved. IAS 17 LeasingWhere operating leases include clauses in respect of predetermined rentincreases, those rents are charged to the income statement on a straight linebasis over the lease term. Furthermore, any construction period or other rentalholidays are included in the determination of the straight-line expense period.Inducements to enter into a lease are recognised over the lease term. IAS 18 Revenue RecognitionRevenue is only recognised when all significant risks of ownership have beentransferred to the buyer. Provisions for returned goods are recognised in netassets with movements in these provisions recognised in the income statement. IAS 32 and 39 Financial InstrumentsThe Group has taken the exemption not to restate comparatives for IAS 32'Financial Instruments: Disclosure and Presentation' and IAS 39 'FinancialInstruments: Recognition and Measurement'. As a result, the comparativeinformation in this announcement for the 13 weeks ended 1 May 2004 and for the52 weeks ended 29 January 2005 is presented on the previously existing UK GAAPbasis. The Group applies the hedge accounting provisions of IAS 39 as theyrelate to forward currency and commodity contracts to the extent practically andeconomically appropriate in order to minimise future volatility arising from itsimplementation. IAS 38 Intangible AssetsComputer software that is not an integral part of the related hardware isclassified as an intangible asset and is stated at cost less accumulateddepreciation. Depreciation is charged on a straight line basis over periods fromthree to five years. (ii) Reconciliation of IFRS to UK GAAP Estimated effect on profit before tax of differences between IFRS and UK GAAP -------------------------------- --------- --------- 13 weeks ended 52 weeks ended 1 May 29 January 2004 2005-------------------------------- --------- --------- £m £m-------------------------------- --------- --------- Profit before tax as previously reportedunder UK GAAP 28.1 210.3US extended service agreements: restated in2004/05(1) (1.6) - --------- ---------Profit before tax restated under UK GAAP 26.5 210.3 IFRS adjustments:Share-based payments (0.9) (3.9)Goodwill amortisation 0.3 1.0Leases (0.9) (3.5)Movement in returns provision 1.1 --------------------------------- --------- ---------Profit before tax in accordance with IFRS 26.1 203.9-------------------------------- --------- --------- Taxation:Taxation as previously reported under UKGAAP (9.7) (69.1)US extended service agreements: restated in2004/05(1) 0.6 -Tax effect of IFRS adjustments (0.4) --------------------------------- --------- --------- (9.5) (69.1)-------------------------------- --------- --------- -------------------------------- --------- ---------Profit for the financial period inaccordance with IFRS 16.6 134.8-------------------------------- --------- --------- (1) Following adoption of the amendment to FRS 5, 'Application Note G - RevenueRecognition' for the 52 weeks ended 29 January 2005. Notes to the unaudited interim financial resultsfor the 13 weeks ended 30 April 2005 8. Adoption of IFRS (continued) Estimated cumulative effect on total equity of differences between IFRS and UKGAAP 1 May 29 January 31 January 2004 2005 2004------------------------------ -------- -------- -------- £m £m £m------------------------------ -------- -------- --------Total equity previouslyreported under UK GAAP 760.1 739.1 674.9US extended serviceagreements: restated in2004/05(1) (55.2) - - -------- -------- --------Total equity restated underUK GAAP 704.9 739.1 674.9 IFRS adjustments:Share-based payments - - -Goodwill amortisation 0.3 1.0 -Leases (15.8) (17.9) (14.9)Revenue recognition (4.9) (6.0) (6.0)Deferred taxation 6.4 7.5 6.5Dividend recognition 37.3 45.5 37.3------------------------------ -------- -------- --------Total equity in accordancewith IFRS 728.2 769.2 697.8------------------------------ -------- -------- -------- (1) Following adoption of the amendment to FRS 5, 'Application Note G - RevenueRecognition' for the 52 weeks ended 29 January 2005. 9. Reconciliation of IFRS to US GAAP Whilst the Group is not required to prepare a US GAAP reconciliation on aquarterly basis, it has historically provided such a reconciliation for theconvenience of shareholders and potential investors. As part of the transitionto IFRS, the Group will provide IFRS to UK GAAP reconciliations for interimreporting during 2005 but does not expect to provide an IFRS to US GAAPreconciliation. The Group will provide an IFRS to US GAAP reconciliation in itsfinancial statements for the year ended 28 January 2006 as part of its AnnualReport on Form 20-F. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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