13th Jan 2005 12:30
Signet Group PLC13 January 2005 Signet Group plc(LSE: SIG and NYSE: SIG)Christmas Trading StatementEmbargoed until 12.30 p.m. (GMT) 13 January 2005 CHRISTMAS LIKE FOR LIKE SALES UP 3.7% 2004/05 PROFIT BEFORE TAX EXPECTED TO BE £209m TO £215m Like for like sales 9 weeks to 1 January 2005 Group up 3.7% US up 4.9% UK up 1.5% Like for like sales 48 weeks to 1 January 2005 Group up 5.1% US up 6.0% UK up 3.1% COMMENT Terry Burman, Group Chief Executive, commented: "Group like for like salesincreased by 3.7% over the Christmas period building on the strong growth recordof recent years. The Group did not participate in the higher level ofdiscounting that was generally evident on both sides of the Atlantic and grossmargin was broadly maintained during the period. Profit before tax for 2004/05is currently expected to be in the range of £209 million to £215 million, inline with market expectations, after taking account of the further weakening ofthe US dollar during December. Our US business again significantly outperformed its main competition. Like forlike sales rose by 4.9% despite very challenging comparatives. Total dollarsales were up by 8.3%. A higher level of television advertising and thecontinuing implementation of our proven strategy contributed to the salesincrease. Jared, the off-mall destination superstore concept, performedparticularly well and Kay further enhanced its position as the number onespeciality jewellery brand in the US. The UK business, which was also up against very strong comparatives, increasedlike for like sales by 1.5% in the nine week period. The drive to increasediamond participation in the sales mix showed further success. Ernest Jonesmaintained its excellent growth record with like for like sales up by 3.3%.H.Samuel also outperformed the general retail market." Enquiries: Terry Burman, Group and US Chief Executive +44 (0) 20 7399 9520Walker Boyd, Group Finance Director +44 (0) 20 7399 9520 Mike Smith, Brunswick +44 (0) 20 7404 5959Pamela Small, Brunswick +44 (0) 20 7404 5959 Signet operated 1,758 speciality retail jewellery stores at 1 January 2005;these included 1,153 stores in the US, where the Group trades as "Kay Jewelers","Jared The Galleria Of Jewelry" and under a number of regional names. At thesame date Signet also operated 605 stores in the UK, where the Group trades as"H.Samuel", "Ernest Jones" and "Leslie Davis". Further information on Signet isavailable at www.signetgroupplc.com . Group Like for like sales increased by 3.7% in the nine week period to 1 January 2005.Total sales were up by 6.1% at constant exchange rates and by 0.1% on a reportedbasis (Note 1). In both the US and the UK sales growth was stronger closer toChristmas. In the 48 weeks to 1 January 2005 like for like sales rose by 5.1%. Total salesincreased by 7.8% at constant exchange rates and by 0.2% on a reported basis. Profit before tax for 2004/05 is currently expected to be within the range of£209 million to £215 million, in line with market expectations after takingaccount of the further weakening of the US dollar during December. For the yearas a whole the devaluation of the US dollar is likely to have adversely impactedprofit before tax by some 7% reflecting the movement in the average exchangerate from $1.68/£ in 2003/04 to c. $1.86/£ in 2004/05. The Group's balance sheet remains strong. Cash flow for the full year isexpected to be broadly neutral. An increased level of capital expenditure wasincurred to support the Group's growth strategy. United States (circa 68% of Group annual sales) In the nine week period to 1 January 2005 US like for like sales rose by 4.9%notwithstanding very challenging comparatives. Total sales at constant exchangerates rose by 8.3% but declined by 0.8% on a reported basis. In an uncertain retail environment, the business continued to benefit from theimplementation of its proven growth strategy. The Leo diamond and fashion goldjewellery categories performed well. It is expected that the gross margin willhave eased slightly as planned; commodity cost increases and mix changes werelargely offset by action on prices, supply chain improvements and othermanagement initiatives. The credit portfolio bad debt percentage during theChristmas period is expected to be in line with the average for the same periodin recent years. In the 48 weeks to 1 January 2005 like for like sales increased by 6.0%, withtotal sales up by 10.4% at constant exchange rates but down by 0.9% on areported basis. United Kingdom (circa 32% of Group annual sales) In the nine week period to 1 January 2005, against the background of a weakerretail environment and strong prior year comparatives, UK like for like salesrose by 1.5% and total sales by 1.8%. The range of initiatives which have considerably strengthened the business inrecent years again helped drive performance. The key objective, to increase theparticipation of diamonds in the product mix, showed further success in bothH.Samuel and Ernest Jones. Pricing discipline was maintained and the grossmargin is expected to be somewhat ahead of last year. In the 48 weeks to 1 January 2005 like for like sales increased by 3.1% andtotal sales by 2.7%. The breakdown of UK like for like sales performance is shown below: Ernest Jones H.Samuel UK Period (c. 14% of Group) (c. 18% of Group) (c. 32% of Group)9 weeks to 1 Jan. 2005 +3.3% +0.2% +1.5%48 weeks to 1 Jan. 2005 +4.9% +1.8% +3.1% There will be a conference call for all interested parties today at 2.00 p.m.GMT (9.00 a.m. EST and 6.00 a.m. Pacific Time) and a simultaneous audio webcastat www.signetgroupplc.com. To help ensure the conference call begins in a timelymanner, could all participants please dial in 5 to 10 minutes prior to thescheduled start time. The call details are: UK dial-in: +44 (0) 20 7019 9526US dial-in: +1 718 354 1172 UK 48hr. replay: +44 (0) 20 7984 7578 Pass code: 878783US 48hr. replay: +1 718 354 1112 Pass code: 878783 Signet will be presenting at the Dresdner Kleinwort Wasserstein Conference inLondon on Thursday 27 January 2005. Fourth quarter sales figures are expected tobe announced on 3 February 2005. Note 1 - 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 to bea useful measure for analysing and explaining changes and trends in the Group'sresults. The impact of the re-calculation of sales growth at constant exchangerates is shown below. 9 weeks to 1 January 2005 Growth at Impact of Growth at actual exchange rate constant exchange movement exchange rates rates (non-GAAP)-------------------------------------------------------------------------------- % % %--------------------------------------------------------------------------------Sales by origin and destinationUK, Channel Islands & Republic ofIreland 1.8 - 1.8US (0.8) 9.1 8.3-------------------------------------------------------------------------------- 0.1 6.0 6.1-------------------------------------------------------------------------------- 48 weeks to 1 January 2005 Growth at Impact of Growth at actual exchange rate constant exchange movement exchange rates rates (non-GAAP-------------------------------------------------------------------------------- % % %--------------------------------------------------------------------------------Sales by origin and destinationUK, Channel Islands & Republic ofIreland 2.7 - 2.7US (0.9) 11.3 10.4-------------------------------------------------------------------------------- 0.2 7.6 7.8-------------------------------------------------------------------------------- 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 2003/4 Annual Report on Form 20-F filed with the U.S. Securitiesand Exchange Commission on April 22, 2004 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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