12th Jan 2006 12:30
Signet Group PLC12 January 2006 CHRISTMAS LIKE FOR LIKE SALES UP 1.1% PROFIT EXPECTED TO BE WITHIN THE RANGE OF MARKET ESTIMATES Like for like sales 9 weeks to 31 December 2005 Group up 1.1%US up 5.5%UK down 9.3% Like for like sales 48 weeks to 31 December 2005 Group up 2.2%US up 6.8%UK down 8.4% COMMENT Terry Burman, Group Chief Executive, commented: "Group like for like sales wereup 1.1% over the nine week period with a solid performance by the US business(c.73% of Group sales) offsetting the downturn in the UK division. Profit beforetax for 2005/06 is currently expected to be within the range of market estimatesand to fall between £193 million and £199 million. In the US, the business again significantly outperformed its main competitionand gained market share. Like for like sales rose by 5.5% and total dollar salesincreased by 10.5% building on the consistent growth record of the business. Kaymade further progress enhancing its position as the number one speciality retailjewellery brand in the US. Jared, the off-mall destination superstores,continued to trade particularly well. The divisional operating profit isanticipated to be comfortably ahead for the year as a whole. In the UK, difficult trading conditions were experienced during the Christmasperiod and like for like sales decreased by 9.3%. Although divisional operatingprofit is likely to be significantly lower than last year, the business is stillexpected to achieve a healthy operating margin and return on capital." Enquiries: Terry Burman, Group 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 1,820 speciality retail jewellery stores at 31 December 2005;these included 1,219 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 601 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 were up by 1.1% in the nine week period to 31 December 2005.Total sales rose by 4.8% at constant exchange rates and by 11.7% on a reportedbasis (Note 1). In the 48 weeks to 31 December 2005 like for like sales advanced by 2.2%. Totalsales increased by 5.8% at constant exchange rates and by 8.3% on a reportedbasis. Profit before tax for 2005/06 is currently expected to be within the range ofmarket estimates and to fall between £193 million and £199 million. The averageUS dollar exchange rate is anticipated to be c. £1/$1.80 (2004/05: £1/$1.86). The Group's cash flow for the full year is expected to be broadly neutral andthe balance sheet remains strong. United States (circa 73% of Group annual sales) In the nine week period to 31 December 2005, US like for like sales rose by 5.5%and total dollar sales increased by 10.5% building on the consistent growthrecord of the business. Total sales on a reported basis rose by 21.3%. The business continued to implement its proven growth strategy and to focus onits competitive advantages. Television advertising again proved successful.Diamond fashion jewellery, the bridal and engagement categories and watchesperformed particularly well. Gross margin declined in-line with expectations. In the 48 weeks to 31 December 2005, like for like sales increased by 6.8%, withtotal sales up by 11.7% at constant exchange rates and by 15.4% on a reportedbasis. Net new store space has increased by 9% in 2005/06. The bad debtpercentage for the year is anticipated to be broadly in-line with the average ofrecent years. The divisional operating profit for 2005/06 is expected to becomfortably ahead of last year. United Kingdom (circa 27% of Group annual sales) In the nine week period to 31 December 2005, difficult trading conditions wereexperienced and the UK division's like for like sales fell by 9.3% and totalsales were down by 8.5%. The average selling price and diamond participationagain increased, in line with strategy. Pricing discipline was maintained andthe gross margin is slightly ahead of last year. In the 48 weeks to 31 December 2005, like for like sales fell by 8.4% and totalsales by 7.6%. Although divisional operating profit is likely to besignificantly lower than last year, the business is still expected to achieve ahealthy operating margin and return on capital. The breakdown of UK like for like sales performance is shown below: Period Ernest Jones H.Samuel UK (c. 12% of Group) (c. 15% of Group) (c. 27% of Group) 9 weeks to 31 Dec. 2005 -9.2% -9.3% -9.3%------------------------- ------- ------- -------48 weeks to 31 Dec. 2005 -7.8% -8.9% -8.4%-------------------------- ------- ------- ------- 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 7365 1834US dial-in: +1 718 354 1171 UK 48hr. replay: +44 (0) 20 7784 1024 Pass code: 3364593#US 48hr. replay: +1 718 354 1112 Pass code: 3364593# Fourth quarter sales figures are expected to be announced on 2 February 2006. 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 31 December 2005 Growth at Impact of Growth at actual exchange exchange rate constant rates movement exchange rates (non-GAAP)---------------------------------- -------- -------- -------- % % %---------------------------------- -------- -------- --------Sales by origin and destinationUK, Channel Islands & Republic ofIreland (8.5) - (8.5)US 21.3 (10.8) 10.5---------------------------------- -------- -------- -------- 11.7 (6.9) 4.8---------------------------------- -------- -------- -------- 48 weeks to 31 December 2005 Growth at Impact of Growth at actual exchange exchange rate constant rates movement exchange rates (non-GAAP)---------------------------------- -------- -------- -------- % % %---------------------------------- -------- -------- --------Sales by origin and destinationUK, Channel Islands &Republic of Ireland (7.6) - (7.6)US 15.4 (3.7) 11.7---------------------------------- -------- -------- -------- 8.3 (2.5) 5.8---------------------------------- -------- -------- -------- 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 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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