9th Apr 2008 12:30
Signet Group PLC09 April 2008 Signet Group plc (LSE and NYSE: SIG) Embargoed until 12.30 p.m. (BST)Annual results for the 52 weeks ended 2 February 2008 9 April 2008 Signet Reports Year End Results Reported Constant exchange rate 52 weeks comparative basis(1) • Group like for like sales down 0.7%• Group total sales: $3,665.3m up 3.0% up 3.2%• Group profit before tax: $333.5m down 16.8% down 17.4%• Basic earnings per share: 12.6 cents down 18.2% down 18.7%• Annual dividend per share: 7.277cents(2) up 1.6% (1) See note 11 for reconciliation. (2) 2006/07 interim dividend paid in poundssterling, see note 8 for translation assumption. Divisional Highlights • US:- Kay strengthened its No.1 speciality brand position with sales of $1,489.6m, c.40% greater than No.2 middle market speciality brand - Jared sales up 13.8% to $756.4m, national network TV advertising commenced - Net space growth of 10% • UK:- c.50% of sales from customer oriented store format - H.Samuel benefited from more effective marketing - Ernest Jones successfully tested enhanced store design Terry Burman, Group Chief Executive, commented: "2007/08 was a very demandingyear for the Group, with a particularly difficult fourth quarter. While the USbusiness saw an unprecedented weakening in sales over Christmas, and faced theimpact of commodity cost increases, it continued to be a leader in settingindustry operating standards. In a tough UK retail marketplace, like for likesales were ahead and operating margins, cash flow and return on capital remainedstrong. In consideration of the uncertain economic environment, actions have beenidentified to drive sales, protect gross margin, and tightly control costs. TheGroup's demanding investment hurdle rate continues to be applied, and as aresult US net store space growth is expected to be lower at about 5% in 2008/09. Since the start of 2008/09, the Group has experienced a low single digit declinein like for like sales, with the US down about 4%, having had some benefit frombetter weather over Valentine's Day. Early results have been encouraging fromthe price increases implemented after Valentine's Day in the US. UK like forlike sales were up mid single digits. However, the outlook remains verychallenging on both sides of the Atlantic. As previously announced, the Board has undertaken a review of the mostappropriate domicile and stock market listing for the Company. Followingconsultation with major investors, the Board believes that shareholders would,on balance, approve a move of the primary listing of Signet to the US.Accordingly the Board continues to take steps that would facilitate such achange. However, in light of market conditions, the determination and timing ofany such proposal remains uncertain and will continue to be kept under review bythe Board." Enquiries: Terry Burman, Group Chief Executive +44 (0) 20 7317 9700 Walker Boyd, Group Finance Director +44 (0) 20 7317 9700 Jonathan Glass, Brunswick +44 (0) 20 7404 5959 Wendel Verbeek, Brunswick +44 (0) 20 7404 5959 Signet operated 1,962 speciality retail jewellery stores at 2 February 2008;these included 1,399 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 563 stores in the UK, where the Group trades as "H.Samuel","Ernest Jones", and "Leslie Davis". Further information on Signet is availableat www.signetgroupplc.com. See also www.kay.com, www.jared.com,www.hsamuel.co.uk and www.ernestjones.co.uk. Chairman's Statement Group performance The Group continued to make progress in implementing its proven growth strategydespite the difficult economic environment. While the Group saw a decline inprofits, it still achieved a superior operating performance for the jewellerysector including a healthy operating margin and Return on Capital Employed("ROCE"). Key financial results of the year included: • Sales up by 3.0% to $3,665.3 million; • Profit before tax down by 16.8% to $333.5 million; • Basic earnings per share down by 18.2% to 12.6 cents, and • ROCE of 16.8%. The Board is pleased to recommend a final dividend of 6.317 cents per share(2006/07: 6.317 cents) for the year ended 2 February 2008. This represents atotal dividend for the year of 7.277 cents, up by 1.6% (see note 8). During theyear the Group made share repurchases of $29.0 million, completing the programmeannounced in July 2006. In total, $152.9 million was distributed to shareholdersduring 2007/08. Given the substantial increase in economic and financial sectoruncertainties, the Board will continue to evaluate dividend policy in the lightof the needs of the business taking into consideration the significantcompetitive advantages of a strong balance sheet and financial flexibility.Account will also be taken of the primary stock market listing of the Company. Group strategy The Group aims to build long term value through focusing on the customer byproviding a superior merchandise selection in high quality real estatelocations. Effective advertising draws consumers into our stores, where they areprovided with outstanding service. The operating philosophies that help theGroup achieve these aims are: • excellence in execution; • test before we invest; • continuous improvement; and • disciplined investment. The Group's strategy to deliver shareholder value is to: • continue to achieve sector leading performance standards on both sides of the Atlantic; • increase store productivity in the US and the UK; • grow new store space in the US; and • maintain a strong balance sheet. While progress was made in most of these areas, store productivity in the USdeclined in 2007/08 as a result of the sales performance in the fourth quarter.A more detailed consideration of these strategies is provided in the ChiefExecutive's, US and UK performance reviews. Group domicile and primary listing As set out in the trading statement dated 10 January 2008, the Board hasundertaken a review of the most appropriate domicile and stock market listingfor the Company. This review has confirmed that there is a clear rationale forthe primary listing of the Group to be in the US as a significant and growingmajority of its business and assets are in that country. From consultation withthe Company's major investors, the Board believes that Signet's shareholderswould, on balance, support a recommendation from the Board regarding a potentialredomicile of the Company to Bermuda and a move of the primary listing ofSignet's shares to the US. Accordingly the Board continues to take steps thatwould facilitate such a change. However, in light of market conditions, thedetermination and timing of any such proposal remains uncertain and willcontinue to be kept under review by the Board. Corporate responsibility During the year further progress was made in developing industry wideinitiatives to achieve improvements in the supply chain, and with regard tosocial, ethical and environmental issues. In keeping with the Group's approachof working with other industry representatives to maintain and improve consumerconfidence in our industry we worked with organisations such as the Council forResponsible Jewellery Practices ("CRJP"), the World Diamond Council, Jewelers ofAmerica and Jewelers Vigilance Committee to develop programmes to improve thesupply chain. Major accomplishments include: • implementation of a requirement that jewellery supplied to the Group should not contain rubies or jade from Burma. Jewelers of America also introduced the same requirement and advocated that the US government ban such imports; • the development of a Code of Practices by the CRJP which includes future third party monitoring. It is anticipated that during 2008/09 the Code will be introduced; and • a better understanding of the Group's impact on the environment and on identifying ways in which it can improve its performance. Signet remains a member of the FTSE4Good Index and also contributed in the US,to the industry charity, Jewelers for Children, St. Judes Children's ResearchHospital and in the UK, to the Princess Royal Trust for Carers. Current trading Since the start of 2008/09, the Group has experienced a low single digit declinein like for like sales, with the US down about 4%, having had some benefit frombetter weather over Valentine's Day. Early results have been encouraging fromthe price increases in the US implemented after Valentine's Day. UK like forlike sales were up mid single digits. However, the outlook remains verychallenging on both sides of the Atlantic. People I would like to thank our staff and management for their hard work anddedication in a year when the external environment has placed increasedpressures on the business. I would also like to thank Brook Land, who retires asa director at the 2008 annual general meeting, for his significant contribution.He has served on the Board for nearly 13 years, including six as seniorindependent director. Following his retirement Russell Walls will assume thisrole. In addition, I would like to welcome Lesley Knox, who was appointed as anon-executive director in January 2008. I am confident that her broad experienceof business and corporate finance will enable her to make a valuablecontribution to the Group. Chief Executive's Review Change at constant Like for exchange like rates on a change 2007/08 2006/07 Change 52 week on a 52 52 weeks 53 weeks reported basis(1) week basis $m $m % % % Sales 3,665.3 3,559.2 3.0 3.2 (0.7) Operating profit 351.3 416.2 (15.6) (15.9) Profit before tax 333.5 400.8 (16.8) (17.4) Basic earnings per share 12.6c 15.4c (18.2) (18.7) Operating margin 9.6% 11.7% ROCE 16.8% 22.8% (1) See note 11 for reconciliation of impact of exchange rates and adjustment for 53rd week in 2006/07. 2007/08 was a very demanding year for the Group, with a particularly difficultfourth quarter. Although execution within the business continued to improve, theeconomic environment deteriorated. The speed and extent of the change in tradingconditions during the fourth quarter was unprecedented. As a result there wasvery limited time to align the business to reflect the change in marketconditions and therefore the impact on results could not be meaningfullymitigated. In the year to 2 February 2008 total sales rose by 3.2% at constant exchangerates on a 52 week basis (see note 11); the reported increase was 3.0% to$3,665.3 million (2006/07: $3,559.2 million). Like for like sales declined by0.7%, the first annual decrease since 1992/93. The average exchange rate for2007/08 was £1/$2.00 (2006/07: £1/$1.88). Operating profit fell by 15.9% at constant exchange rates on a 52 week basis(see note 11); the reported decrease was 15.6% to $351.3 million (2006/07:$416.2 million). Operating margin was 9.6% (2006/07: 11.7%). Profit before taxwas down by 17.4% at constant exchange rates on a 52 week basis (see note 11)and by 16.8% on a reported basis to $333.5 million (2006/07: $400.8 million).The tax rate was 35.5% (2006/07: 33.6%). Basic earnings per share were 12.6cents (2006/07: 15.4 cents, the 53rd week contributing 0.1 cents in 2006/07).ROCE was 16.8% (2006/07: 22.8%). Net debt at 2 February 2008 was $374.6 million (3 February 2007: $233.2million). Gearing (net debt to total equity) was 20.7% (3 February 2007: 13.4%).Given that nearly all stores are leased, a further important measure of gearingis fixed charge cover, which was 1.8 times in 2007/08 (2006/07: 2.0 times). Theincrease in net debt before exchange adjustments was $143.6 million (2006/07:$86.4 million), reflecting the lower level of profitability, investment in newstore space of $178.9 million (2006/07: $176.7 million) and distribution toshareholders of $152.9 million (2006/07: $172.1 million). It is critical to build the long term competitive position of the business whilemanaging short term pressure on profitability and the balance sheet duringchallenging economic periods. A very thorough review of the businesses on bothsides of the Atlantic has been carried out following the difficult 2007Christmas period. In consideration of the uncertain economic environment a morecautious approach to the execution of the Group's growth strategy has beenadopted. Reflecting this, management focus is more on implementation andresponding rapidly to changes in the marketplace, with less attention ondeveloping longer term operational initiatives. As part of this process, actionshave been identified to drive sales, protect gross margin, control costs tightlyand, where appropriate, to realign the Group's cost base and inventory levels tothe changed market conditions. The Board firmly believes that a strong balance sheet, and financialflexibility, are competitive advantages. Therefore it has carefully consideredthe appropriate working capital levels, investment required to maintain thequality of the Group's assets and rate of space growth, as well as itsdistribution policy to shareholders. A strong balance sheet enables the Group tocontinue to invest in the business throughout the economic cycle enhancingfurther its strong competitive position within the marketplace. Investment to reinforce the Group's strategic advantages remain in place, suchas the expansion of Kay and Jared, the development of the rough diamond supplychain initiative, as well as the Ernest Jones refurbishment programme. Demandinginvestment hurdle rates continue to be applied, and as a result US net storespace growth is expected to be about 5% in 2008/09 and 2009/10, which is belowthe 8% to 10% per annum long term target range. However, an increased level ofUK store refurbishment in 2008/09 is expected to result in a broadly unchangedlevel of Group capital expenditure, of approximately $140 million. Theanticipated reduction in working capital investment, lower tax payments and theabsence of share repurchases are expected to result in a significant reductionin cash outflow during 2008/09. US performance review (74% of Group sales) Like for like Change on a change on a 2007/08 2006/07 Change 52 week 52 week 52 weeks 53 weeks reported basis(1) basis $m $m % % % Sales(2) 2,705.7 2,652.1 2.0 4.1 (1.7) Operating profit 262.2 326.7 (19.7) (19.6) Operating margin(2) 9.7% 12.3% ROCE 14.9% 21.5% (1) See note 11 for reconciliation of impact of 53rd week in 2006/07. (2) See Group financial review for tables analysing total sales growth and movement in operating margin. In a much more demanding trading environment the consistency of the USdivision's management, strategy and execution, as well as the Group's strongbalance sheet were significant competitive advantages. While the US business sawan unprecedented weakening in sales in the fourth quarter and faced the impactof commodity cost increases, it continued to be a leader in setting industryoperating standards. A further increase in net new space of 10% was achieved, atthe top end of the target range. Like for like sales growth slowed in the first nine months of 2007/08 to 2.7%,with the gift giving events of Valentine's Day and Mother's Day beingdisappointing. The very important fourth quarter was particularly difficult withlike for like sales declining by 8.6%, resulting in a full year decline of 1.7%.Total sales increased by 4.1% on a 52 week basis (see note 11) and by 2.0% asreported. Operating profit was down by 19.6% on a 52 week basis (see note 11)and by 19.7% as reported, to $262.2 million (2006/07: $326.7 million). Theoperating margin of 9.7% (2006/07: 12.3%; 12.5% on a 52 week basis) reflectedexpense deleverage of 190 basis points as a result of the decline in like forlike sales, and the adverse impacts of additional new space (60 basis points)and change in gross margin (30 basis points). The movement in gross marginpercentage was due to the significantly higher cost of gold and a greaterproportion of sales from Jared, partly offset by supply chain initiatives andsome limited price increases. The bad debt charge of 3.4% of total sales (2006/07: 2.8%), was at the high end of the range of the last ten years, but waslargely offset by higher income associated with the receivables due to a lowermonthly collection rate. The proportion of sales through the in-house creditcard was 52.6% (2006/07: 51.7%). ROCE was 14.9% (2006/07: 21.5%), reflecting the lower operating profit andinvestment in a 10% increase in space. The proportion of stores under six yearsold continued to increase and was 38% in 2007/08 compared to 32% in 2006/07. Thehigher proportion of immature stores constrains ROCE in the short term, butincreases operating profit and drives future growth. The division continued to implement its proven strategy and the performance ofthe business against these criteria is set out below: Strategy: To achieve sector leading performance standards In 2007/08 the division increased total sales by 4.1% (52 week basis, see note11), and, despite the comparative weakness of the middle mass market, performedbroadly in line with the total US jewellery market which grew by 4.0% to $64.7billion in calendar 2007 (2006: $62.2 billion; source: US Department ofCommerce). The Group's share of the speciality jewellery market remained at8.8%. In 1997/98, the division accounted for 4.8% of speciality jewellery salesand 7.0% in 2002/03. Over the five year period ended on 2 February 2008 the division's operatingmargin averaged 12.0% and Earnings Before Interest and Tax ("EBIT") / Year EndTotal Assets ratio was 14.9%. Jewelers of America reported that the typicalspeciality retail jeweller was achieving an average operating margin of 5.4% anda 7.7% EBIT / Year End Total Assets ratio over the five years to31 December 2006, being the last year for which figures have been published.While 2007/08 was difficult, over the last five years the Group's total saleshave increased by 56.4% and operating profit by 25.8%. Strategy: To improve store productivity The key driver of the division's comparatively high operating margins and returnon assets is store productivity, which is well above that of the industry as awhole. While the Group's strategy is to increase store productivity, there was adecline in 2007/08, reflecting the fall in like for like sales and an increasein the proportion of immature stores under six years old. Over the last fiveyears the sales per store for Kay and Jared have increased to $1.71 million from$1.53 million and to $5.34 million from $4.57 million respectively. The regionalbrands achieved sales per store of $1.34 million in 2007/08 with the differencein performance between Kay and the regional brands continuing to reflect thebenefit of national television advertising. Strategy: To grow new store space The Group has strict criteria for investment which have been consistentlyapplied. Over the last five years net new store space of 10% per annum hasrequired a total investment of some $700 million in fixed and working capital.Appraisal reviews show that, in aggregate, investment returns continue to exceedthe Group's targeted 20% internal rate of return over five years. In 2007/08,net new store space grew by 10% (2006/07: 11%). Over 80% of the growth wasoutside traditional malls in 2007/08 and at 2 February 2008 about 40% of storespace was off-mall. The table below sets out the store numbers, net new openingsand the potential number of stores by chain and format: Net ExpectedStore 3 February openings 2 February net openings Long termnumbers 2007 2007/08 2008 2008/09 Potential________________________________________________________________________________ Kay Mall 772 17 789 6 850+ Off-mall 52 40 92 19 500+ Outlet 5 5 10 8 50-100 Metropolitan 3 nil 3 nil c.30________________________________________________________________________________ 832 62 894 33 1,430+Regionals 341 10 351 (14) c.700Jared 135 19 154 17 c.300________________________________________________________________________________Total 1,308 91 1,399 36 2,430+________________________________________________________________________________ Real estate investment In 2007/08, fixed capital investment was $111.1 million (2006/07: $101.1million), including some $60.1 million (2006/07: $57.3 million) related to newstore space. In 2008/09, revisions to sales projections reflecting thechallenging trading conditions, will result in fewer opportunities that meet theGroup's investment criteria. Therefore, in 2008/09, space growth is expected tobe about 5%, net of about 30 store closures (2007/08: 17). Over the longer termthe US division continues to have the potential to almost double its size. Thiscan be achieved through organic expansion within the existing formats for Kayand Jared. For the regional brands to achieve this potential would require oneor more acquisitions, and such activity is not expected to occur imminently.Recent and planned investment in the store portfolio, both fixed and workingcapital, is set out below: Planned 2008/09 2007/08 2006/07 2005/06 $m $m $m $m_________________________________________________________________________ Total new stores Fixed capital investment 45 60 57 45 Working capital investment 90 119 119 96_________________________________________________________________________Total investment 135 179 176 141Other store fixed capital investment 24 28 30 28_________________________________________________________________________ Total store investment 159 207 206 169_________________________________________________________________________ Fixed capital expenditure in 2008/09 is planned to decrease to about $90million, including circa $45 million related to new stores. The investment inworking capital, that is inventory and receivables, associated with gross spacegrowth amounted to some $119 million in 2007/08 and is expected to besignificantly lower at about $90 million in 2008/09. 62 stores were refurbishedor relocated (2006/07: 59), with some 51 planned for 2008/09. Operating initiatives in 2008/09 In the current challenging environment the US business has taken action tocontrol costs tightly. Store staff hours and advertising expenditure have beenrealigned, where possible, to reflect current sales expectations. Staff trainingand development continues to be a priority, as does investment to enhancein-store procedures to improve customer service and productivity. Staffinglevels elsewhere have been frozen, despite the growth in store numbers, and arange of other costs have been cut. Consumers' financial positions continue to deteriorate which may lead to afurther increase in the bad debt charge, although this is expected to besomewhat offset by increased income from the credit portfolio. Consequentlycredit authorisation criteria continue to be reviewed and outstanding balancesare very closely monitored with prompt action being taken in response to changesin performance. In addition, further investment in collection systems is takingplace. The development of exclusive ranges, such as the Leo Diamond, the PeerlessDiamond and the Hearts Desire collection and the expansion of the Le Vianselection, continue to help differentiate the division in the marketplace and toincrease average transaction value. The 2007/08 year end inventory was aboveplan by about $20 million due to the difficult fourth quarter and futurepurchases are being strictly controlled. Actions to realign inventory to currentsales levels have been taken and it is anticipated that this will be achieved byJune 2008. In 2006/07 and 2007/08 substantial increases in gold and platinum costs had animpact on the entire US jewellery sector, and were largely not passed on toconsumers. After careful consideration and planning it was decided to increaseprices covering a broad merchandise range, including both basic and fashionproducts, following Valentine's Day 2008. The Group's pricing strategy is to becompetitive over the long term; however the price changes have resulted in adeparture from this position in the short term, although an increasing number ofspeciality jewellers are also increasing prices. While the impact of the priceincreases will only be fully apparent in the second quarter of 2008/09, theearly results are encouraging. Advertising expenditure as a percentage of sales is being realigned to nearerhistoric levels, in addition the cadence of promotional activity is beingincreased and made more responsive to market conditions. The Kay website will befurther developed and an e-commerce facility on the Jared website is planned tobe introduced in the second half of 2008/09. UK performance review (26% of Group sales) Change at Like constant for like exchange change rates on a on a 2007/08 2006/07 Change 52 week 52 week 52 weeks 53 weeks reported basis(1) basis $m $m % % % Sales: H.Samuel 513.4 490.3 4.7 (0.1) 1.3Ernest Jones 438.8 409.1 7.3 2.3 2.9Other 7.4 7.7 (3.9) (7.5) _____________________ Total(2) 959.6 907.1 5.8 0.9 2.0 _____________________ Operating profit 105.1 103.4 1.6 (1.3)Operating margin(2) 11.0% 11.4%ROCE 29.9% 32.7% (1) See note 11 for reconciliation of impact of exchange rates and adjustment for 53rd week in 2006/07. (2) See Group financial review for tables analysing total sales growth and movement in operating margin. In a tough UK retail marketplace like for like sales were ahead of last year andoperating margins, cash flow and ROCE remained strong. The business achievedfurther improvements in the key areas of execution, particularly customerservice. Like for like sales growth was 2.0%, an encouraging performance in anincreasingly challenging marketplace. Growth in the first nine months of 2007/08was stronger than last year at 4.7%, but became more difficult in the fourthquarter with like for like sales declining by 1.7%. Total sales increased by0.9% at constant exchange rates on a 52 week basis (see note 11) and by 5.8% ona reported basis to $959.6 million (2006/07: $907.1 million). Operating profit was little changed at constant exchange rates on a 52 weekbasis (see note 11); the reported increase was 1.6% to $105.1 million (2006/07:$103.4 million). Operating margin was down 40 basis points on the prior yearreflecting expense leverage of 40 basis points from the small increase in likefor like sales combined with tight control of costs, an adverse movement in gross margin percentage of 60 basis points and the benefit to 2006/07 of the 53rdweek (adverse 20 basis points). The movement in gross margin was primarilycaused by changes in mix due to the strong performance of the watch category,some impact from commodity costs and an increased proportion of sales fromErnest Jones. ROCE was 29.9% (2006/07: 32.7%), primarily reflecting the impactof the 53rd week in 2006/07 and a slight increase in capital employed. Further progress was made in implementing the division's successful strategy andits performance against those criteria are set out below: Strategy: To achieve sector leading performance standards The total UK jewellery market was unchanged at £4.5 billion in calendar 2007including VAT (source: Office of National Statistics); and the division's marketshare was similar to last year at 12.1%. In 2007/08, the division's operatingmargin was 11.0% and its EBIT / Year End Total Assets ratio was 21.2%. In theyear to 31 March 2007, the last year for which figures are available, the nextfive largest speciality retail jewellers had an average operating margin of 5.7%and a 6.4% EBIT / Year End Total Assets ratio. Strategy: To improve store productivity Store productivity increased in both H.Samuel and Ernest Jones in 2007/08 to£0.72 million from £0.70 million and to £1.11 million from £1.08 millionrespectively. This reflected divisional like for like sales growth of 2.0% and,in H.Samuel, a continuing reduction of the store base to focus on stores inlarger centres that provide an opportunity to achieve a greater ROCE. Withaverage selling space of about 870 square feet per store, Ernest Jones achievedthe highest sales density of any Signet brand. Real estate and investment During 2007/08, 27 stores were refurbished or relocated. At the year end, 282locations, mostly H.Samuel, traded in the customer oriented format, accountingfor some 50% of the UK division's sales. At 2 February 2008, there were 359H.Samuel and 204 Ernest Jones branches (3 February 2007: 375 and 206respectively). 2007/08 2006/07 2005/06________________________________________________________________________________H.Samuel storesOpenings 1 - 3Closures (17) (11) (15)Year end 359 375 386________________________________________________________________________________ Ernest Jones storesOpenings - 1 5Closures (2) (2) (2)Year end 204 206 207________________________________________________________________________________ Total stores at year end 563 581 593________________________________________________________________________________ The level of store capital expenditure during 2007/08 was £9 million (2006/07:£8 million) reflecting the phasing of the refurbishment cycle. In 2008/09 it isplanned to roll out up to 49 sites, including new locations, in the enhancedErnest Jones store design, which produced very encouraging results when testedin the second half of 2007/08. In addition, up to a further 25 H.Samuellocations are expected to begin trading in the more customer oriented format byChristmas 2008. As a result store capital expenditure is expected to increase tosome £25 million in 2008/09. Recent and planned investment in the portfolio isset out below: Planned 2008/09 2007/08 2006/07 2005/06________________________________________________________________________________Store refurbishments and 69 27 28 78relocationsNew H.Samuel stores 2 1 - 3New Ernest Jones stores 3 - 1 5Store fixed capital investment £25m £9m £8m £22m________________________________________________________________________________ Operating initiatives for 2008/09 In the current uncertain environment, the UK business will continue to managecosts, inventory and gross margin very closely. While the impact of commoditycost increases has been less than in the US due to the weakness of the dollar,price increases have been implemented. The successful initiative to drivefootfall by taking advantage of the scale of the business, while maintaininggross margin, through key volume lines will continue to be developed. Thediamond selection, particularly in exclusive and value ranges, is beingenhanced. Mixed metal ranges are being expanded and new merchandise is beingtested more efficiently. In the watch category, relationships with the leadingagencies continue to be a priority. Additional initiatives continue to be introduced to raise customer servicestandards even further, including extension of the customer satisfaction indexto all sites and enhancements to training materials on product knowledge andselling skills. New store communication and executional tools are being tested. Advertising expenditure will be adjusted to reflect the return on investmentbeing achieved. The "H.Samuel helps you say it better" and "Only at ErnestJones" marketing propositions are planned to be developed further and thee-commerce websites for both brands are expected to be improved. Group financial review Dollar reporting Following the approval of shareholders and the High Court, the redenomination ofthe Company's share capital became effective on 5 February 2007. The Company'sfunctional currency is now US dollars and the Group reports in US dollars. Sales growth, operating margin and ROCE The components of the 3.0% increase in Group total sales in 2007/08 are analysedin the table below: Components of sales growth US UK Group % % %______________________________________________________________________________Like for like sales on a 52 week basis (1.7) 2.0 (0.7)Change in net store space 5.8 (1.1) 3.9Exchange translation - 6.5 1.7______________________________________________________________________________Total sales growth on a 52 week basis 4.1 7.4 4.9Impact of 53rd week in 2006/07 (2.1) (1.6) (1.9)______________________________________________________________________________Total sales growth as reported 2.0 5.8 3.0______________________________________________________________________________ Group operating margin (operating profit to sales ratio) was 9.6% in 2007/08(2006/07: 11.7%), the factors causing this movement are analysed below: Components of operating margin movement US UK Group % % %______________________________________________________________________________ 2006/07 operating margin 12.3 11.4 11.7Impact of 53rd week in 2006/07 0.2 (0.2) 0.1______________________________________________________________________________ 2006/07 operating margin on 52 week basis 12.5 11.2 11.8Gross margin (0.3) (0.6) (0.4)Expense leverage (1.9) 0.4 (1.4)New store space (0.6) - (0.4)______________________________________________________________________________2007/08 operating margin 9.7 11.0 9.6______________________________________________________________________________ ROCE was 16.8% (2006/07: 22.8%). Capital employed is based on the average of themonthly balance sheets and at 2 February 2008 included US net receivables,nearly all of which are in-house credit card debtors, amounting to $840.2million (3 February 2007: $778.9 million). Group and financing costs Group central costs amounted to $16.0 million (2006/07: $13.9 million),reflecting the impact of exchange translation movements and higher professionalfees. Net financing costs amounted to $17.8 million (2006/07: $15.4 million), the increase being primarily due to the share buy back programme commenced in2006/07 and completed in the first quarter of 2007/08. Taxation The charge of $118.3 million (2006/07: $134.8 million) represents an effectivetax rate of 35.5% (2006/07: 33.6%). The rate was lower than indicated in thethird quarter due to the change in mix of profit between the US and UKbusinesses and a more favourable resolution of certain prior year tax positions.It is anticipated that, subject to the outcome of various uncertain taxpositions, the Group's effective tax rate in 2008/09 will be at a similar levelto the reported rate in 2007/08. Profit for the financial period Profit for the 52 weeks ended 2 February 2007 was $215.2 million (53 weeks to 3February 2007: $266.0 million). Purchase of own shares During 2007/08 the Group completed a share buy back programme with 12.2 millionshares (2006/07: 30.3 million) purchased for $29.0 million (2006/07: $63.4million). Liquidity and capital resources Operating cash flow before working capital movements was $465.7 million (2006/07: $519.9 million). Total investment in new space, both fixed and workingcapital, during the year was $178.9 million (2006/07: $176.7 million). The totalinvestment in working capital was $171.0 million (2006/07: $173.5 million), ofwhich $118.8 million (2006/07: $119.4 million) related to net new space. Whileinventory levels were generally tightly controlled, there was an increase of$96.8 million (2006/07: $118.1 million) primarily reflecting space growth in theUS. The majority of the increase in receivables of $60.7 million (2006/07:$101.5 million) was due to space growth and a fall in monthly collection rate.There was a decrease in payables of $13.5 million (2006/07: increase $46.1million) as the Group took advantage of discounts from suppliers for earlypayment. Cash generated from operations amounted to $294.7 million (2006/07: $346.4million). Interest of $29.8 million (2006/07: $31.4 million) and tax of $128.5million (2006/07: $130.1 million) were paid. Net cash flows from operatingactivities were $136.4 million (2006/07: $184.9 million). Group capital expenditure was $140.4 million (2006/07: $124.4 million). Thelevel of capital expenditure was some 1.2 times (2006/07: 1.3 times) thedepreciation and amortisation charge of $114.1 million (2006/07: $98.4 million). Equity dividends of $123.9 million (2006/07: $108.7 million) were paid in theyear and the net movement in shares outstanding was an outflow of $23.0 million(2006/07: outflow $55.7 million) reflecting the completion of the share buy backprogramme commenced in 2006/07. There was an increase in net debt before exchange rate adjustments of $143.6million (2006/07: $86.4 million). Net debt at 2 February 2008 was $374.6 million(3 February 2007: $233.2 million) and gearing was 20.7% (3 February 2007:13.4%). It is anticipated that in 2008/09 there will be a further increase in the levelof working capital as a result of planned net US store openings and theexpansion of the rough diamond sourcing initiative, however this is expected tobe significantly less than in 2007/08. Capital expenditure is forecast to be ata similar level to 2007/08 as lower expenditure in the US is balanced by anincrease in the UK. Tax payments will be less reflecting the level of profitsreported in 2007/08. In total, a cash outflow of between $40 million and $80million is anticipated in 2008/09 before exchange adjustments and changes inequity and subject to general economic uncertainties. Pensions The Group has one defined benefit plan (the "Group Scheme") for UK-based staff,which was closed to new members in 2004. All other pension arrangements consistof defined contribution plans. The IAS 19 present value of obligations of theGroup Scheme decreased last year by $4.2 million to $253.7 million and themarket value of the Group Scheme's assets fell by $13.5 million to $248.1million; as a result the balance sheet at 2 February 2008 reflected a netpension liability of $4.0 million (3 February 2007: net pension asset of $2.5million). The cash contribution to the fund in 2007/08 was $7.2 million (2006/07: $6.8 million) and the Group expects to contribute a similar amount in 2007/08. Summary of fourth quarter results (unaudited) 13 weeks 14 weeks 13 weeks ended ended comparable 2 February 3 February period like for 2008 2007 like change $m $m %Sales UK 384.2 397.6 (1.7) US 1,000.6 1,077.6 (8.6) __________________________________________________ 1,384.8 1,475.2 (6.7) __________________________________________________Operating profit UK - Trading 105.5 111.6 - Group central costs (3.0) (3.6) ________________________________ 102.5 108.0 US 124.4 182.5 ________________________________Total operating profit 226.9 290.5Net financing costs (4.9) (3.3) ________________________________Profit before tax 222.0 287.2Taxation (77.6) (94.4) ________________________________Profit for the period 144.4 192.8 ________________________________ EPS - basic 8.4c 11.2c - diluted 8.4c 11.1c The Board of Directors approved this statement of annual results on 9 April2008. Investor relations programme details There will be an analysts' presentation and conference call today at 2.00 p.m.BST (9.00 a.m. EDT and 6.00 a.m. Pacific Time) and a simultaneous audio andvideo webcast at www.signetgroupplc.com. To help ensure the conference callbegins in a timely manner, could all participants please dial in 5 to 10 minutesprior to the scheduled start time. The call details are: European dial-in: +44 (0) 20 7806 1963US dial-in: +1 718 354 1391 European 48hr. replay: +44 (0) 20 7806 1970 Access code: 9456483#US 48hr. replay: +1 718 354 1112 Access code: 9456483# First quarter sales First quarter sales figures are expected to be announced on 8 May 2008. 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 2006/07 Annual Report on Form 20-F filed with the U.S. Securitiesand Exchange Commission on May 4, 2007 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 Consolidated income statementfor the 52 weeks ended 2 February 2008 52 weeks 53 weeks ended ended 2 February 3 February 2008 2007 (1) Notes________________________________________________________________________________ $m $m ________________________________________________________________________________ Sales 3,665.3 3,559.2 2,11Cost of sales (3,264.8) (3,092.4)________________________________________________________________________________Gross profit 400.5 466.8Administrative expenses (158.0) (142.1)Other operating income 108.8 91.5 3________________________________________________________________________________Operating profit 351.3 416.2 2,11Finance income 11.0 18.8 4Finance expense (28.8) (34.2) 4________________________________________________________________________________Profit before tax 333.5 400.8 11Taxation (118.3) (134.8) 5________________________________________________________________________________Profit for the financialperiod 215.2 266.0 11________________________________________________________________________________Earnings per share - basic 12.6c 15.4c 7,11 - diluted 12.6c 15.3c 7________________________________________________________________________________Earnings per ADS - basic 126.3c 154.0c 7 - diluted 126.1c 153.4c 7________________________________________________________________________________ (1) Comparative period figures have been restated following a change in presentational currency from UK pounds to US dollars with effect from 5 February 2007. All of the above relate to continuing activities attributable to equity holders of the Company. Consolidated balance sheetas at 2 February 2008 ________________________________________________________________________________ 2 February 3 February 2008 2007 (1) Notes________________________________________________________________________________ $m $m________________________________________________________________________________Assets:Non-current assetsIntangible assets 52.6 46.3Property, plant and equipment 502.4 484.8Other receivables 34.8 29.2Retirement benefit asset - 3.7Deferred tax assets 19.7 29.0________________________________________________________________________________ 609.5 593.0________________________________________________________________________________Current assetsInventories 1,445.5 1,350.6Trade and other receivables 927.5 869.1Cash and cash equivalents 41.7 152.3________________________________________________________________________________ 2,414.7 2,372.0________________________________________________________________________________ Total assets 3,024.2 2,965.0________________________________________________________________________________ Liabilities:Current liabilitiesBorrowings due in less than one year (36.3) (5.5)Trade and other payables (357.5) (392.4)Deferred income (125.3) (122.7)Current tax (79.5) (101.7)________________________________________________________________________________ (598.6) (622.3)________________________________________________________________________________ Non-current liabilitiesBorrowings due in more than one year (380.0) (380.0)Other payables (85.3) (74.7)Deferred income (139.0) (132.0)Provisions (9.6) (10.0)Retirement benefit obligation (5.6) -________________________________________________________________________________ (619.5) (596.7)________________________________________________________________________________ Total liabilities (1,218.1) (1,219.0)________________________________________________________________________________ Net assets 1,806.1 1,746.0________________________________________________________________________________ Equity:Capital and reserves attributable to equityholders of the CompanyShare capital 15.4 14.0Share premium 140.2 134.7 9Other reserves 235.2 235.1 9Retained earnings 1,415.3 1,362.2 9________________________________________________________________________________ Total equity 1,806.1 1,746.0________________________________________________________________________________ (1) Comparative period figures have been restated following a change in presentational currency from UK pounds to US dollars with effect from 5 February 2007. Consolidated cash flow statementfor the 52 weeks ended 2 February 2008 52 weeks 53 weeks ended ended 2 February 3 February 2008 2007 (1)________________________________________________________________________________ $m $m________________________________________________________________________________ Cash flows from operating activities:Profit before tax 333.5 400.8Adjustments for:Finance income (11.0) (18.8)Finance expense 28.8 34.2Depreciation of property, plant and equipment 109.4 96.0Amortisation of intangible assets 4.7 2.4Share-based payment expense 0.4 6.7Other non-cash movements (1.5) (2.2)Loss on disposal of property, plant and equipment 1.4 0.8________________________________________________________________________________Operating cash flows before movements in working capital 465.7 519.9Increase in inventories (96.8) (118.1)Increase in receivables (60.7) (101.5)(Decrease)/increase in payables (13.5) 46.1________________________________________________________________________________Cash generated from operations 294.7 346.4Interest paid (29.8) (31.4)Taxation paid (128.5) (130.1)________________________________________________________________________________ Net cash flows from operating activities 136.4 184.9________________________________________________________________________________ Investing activities:Interest received 6.3 16.9Purchase of property, plant and equipment (129.1) (116.9)Purchase of intangible assets (11.3) (7.5)Proceeds from sale of property, plant and equipment 1.0 0.6________________________________________________________________________________ Net cash flows from investing activities (133.1) (106.9)________________________________________________________________________________ Financing activities:Dividends paid (123.9) (108.7)Proceeds from issue of shares 6.0 7.7Purchase of own shares (29.0) (63.4)Increase in short-term borrowings 31.1 7.0Repayment of long-term borrowings - (251.0)Receipt of long-term borrowings - 380.0________________________________________________________________________________Net cash flows from financing activities (115.8) (28.4)________________________________________________________________________________ Cash and cash equivalents at beginning of period 152.3 92.9(Decrease)/increase in cash and cash equivalents (112.5) 49.6Exchange adjustments 1.9 9.8________________________________________________________________________________Cash and cash equivalents at end of period 41.7 152.3________________________________________________________________________________ Reconciliation of net cash flow to movement in net debt Net debt at beginning of period (233.2) (174.5)(Decrease)/increase in cash and cash equivalents (112.5) 49.6Increase in borrowings (31.1) (136.0)Exchange adjustments 2.2 27.7________________________________________________________________________________ Net debt at end of period (374.6) (233.2)________________________________________________________________________________ Net debt represents cash and cash equivalents and borrowings. (1) Comparative period figures have been restated following a change inpresentational currency from UK pounds to US dollars with effect from 5 February2007. Consolidated statement of recognised income and expensefor the 52 weeks ended 2 February 2008 52 weeks 53 weeks ended ended 2 February 3 February 2008 2007(1)________________________________________________________________________________ $m $m________________________________________________________________________________Exchange differences on translation of foreign operations (0.1) 57.3Effective portion of fair value movements on cash flow hedges 14.1 1.7Transfer to initial carrying value of inventory from cash flow hedges (10.2) 1.5Actuarial (loss)/gain on retirement benefit obligation (15.0) 30.5Deferred tax on items recognised in equity 3.7 (10.3)________________________________________________________________________________Net (expense)/income recognised directly in equity (7.5) 80.7Profit for the financial period 215.2 266.0________________________________________________________________________________Total recognised income & expense attributable to equity holders of the Company 207.7 346.7________________________________________________________________________________ (1) Comparative period figures have been restated following a change in presentational currency from UK pounds to US dollars with effect from 5 February 2007. Notes to the financial results for the 52 weeks ended 2 February 2008 1. Basis of preparation This financial information has been prepared in accordance with InternationalFinancial Reporting Standards as adopted by the European Union ("IFRS"). Thisfinancial information has been prepared on the basis of the accounting policiesset out in the Annual Report & Accounts for the 53 weeks ended 3 February 2007which are available on the Group's website www.signetgroupplc.com. Whilst the financial information included in this preliminary announcement hasbeen prepared in accordance with IFRS, this announcement does not itself containsufficient information to comply with IFRS. These results are presented in US dollars following a change in the Group'spresentational currency from UK pounds to US dollars with effect from 5 February2007. In addition, on 5 February 2007 the Company redenominated its sharecapital into US dollars and will maintain distributable reserves and declaredividends in US dollars. Financial information for prior periods has beenrestated from UK pounds to the new presentational currency, US dollars, inaccordance with IAS 21. 2. Segmental information 2008 2007________________________________________________________________________________ $m $m________________________________________________________________________________Sales by origin and destinationUK, Channel Islands & Republic of Ireland 959.6 907.1US 2,705.7 2,652.1________________________________________________________________________________ 3,665.3 3,559.2________________________________________________________________________________ Operating profitUK, Channel Islands & Republic of Ireland- Trading 105.1 103.4- Group function (16.0) (13.9)________________________________________________________________________________ 89.1 89.5US 262.2 326.7________________________________________________________________________________ 351.3 416.2________________________________________________________________________________ The Group's results derive from one business segment - the retailing ofjewellery, watches and associated services. The Group is managed as twogeographical operating segments: the US and UK divisions. Both divisions aremanaged by executive committees, which report through the Group Chief Executiveto the Group Board. Each divisional executive committee is responsible foroperating decisions within guidelines set by the Group Board. 3. Other operating income Other operating income comprises interest receivable from the US in-house creditprogramme of $108.4 million (2007: $93.3 million) and foreign exchange gains of$0.4 million (2007: $1.8 million losses). 4. Finance income and expense 2008 2007________________________________________________________________________________ $m $m________________________________________________________________________________ Interest income 6.2 16.7Defined benefit pension scheme - expected return on scheme assets 18.3 14.7 - interest on pension liabilities (13.5) (12.6)________________________________________________________________________________Finance income 11.0 18.8Finance expense (28.8) (34.2)________________________________________________________________________________ Net finance charge (17.8) (15.4)________________________________________________________________________________ Notes to the financial results for the 52 weeks ended 2 February 2008 5. Taxation 2008 2007________________________________________________________________________________ $m $m________________________________________________________________________________Current taxation - UK 42.0 30.7- US 67.5 105.8Deferred taxation - UK (2.2) (2.8)- US 11.0 1.1________________________________________________________________________________ 118.3 134.8________________________________________________________________________________ 6. Translation differences The exchange rates used for the translation of UK pound transactions andbalances in these accounts are as follows: 2008 2007________________________________________________________________________________Income statement (average rate) 2.00 1.88Balance sheet (period end rate) 1.97 1.97________________________________________________________________________________ 7. Earnings per share 2008 2007________________________________________________________________________________ Earnings attributable to shareholders ($m) 215.2 266.0________________________________________________________________________________ Basic weighted average number of shares in issue 1,703.8 1,727.6(million)Dilutive effect of share options (million) 3.3 6.8________________________________________________________________________________Diluted weighted average number of shares in issue (million) 1,707.1 1,734.4________________________________________________________________________________Earnings per share - basic 12.6c 15.4c - diluted 12.6c 15.3c________________________________________________________________________________Earnings per ADS - basic 126.3c 154.0c - diluted 126.1c 153.4c________________________________________________________________________________ The number of ordinary shares in issue at 2 February 2008 was 1,705,560,466 (3February 2007: 1,713,553,809). 8. Dividends ________________________________________________________________________________ 2008 2007 $m $m________________________________________________________________________________ Final dividend paid of 6.317c per share (2007: 2.8875p) 107.6 94.2Interim dividend paid of 0.96c per share (2007: 0.4434p) 16.3 14.5________________________________________________________________________________ 123.9 108.7________________________________________________________________________________ During 2007/08, a dividend of 6.317 cents per share was paid on 6 July 2007 inrespect of the final dividend declared for the 53 week period ended 3 February2007. An interim dividend of 0.96 cents for the 52 week period ended 2 February2008 was also paid on 9 November 2007. The 2006/07 interim dividend wastranslated at the exchange rate on 3 November 2006. Subject to shareholder approval, a proposed final dividend of 6.317 cents pershare will be paid on 3 July 2008 to those shareholders on the register ofmembers at close of business on 23 May 2008. This financial information does notreflect this proposed dividend, which will be treated as an appropriation ofretained earnings in the 52 week period ending 31 January 2009. For shareholderswho wish to receive the proposed final dividend in pounds sterling, the actualamount will be calculated using the exchange rate as derived from Reuters at4.00 p.m. on the record date of 23 May 2008. Under US tax legislation the rate of US federal income tax on dividends receivedby individual US shareholders from qualified foreign corporations are subject toUS federal income tax at a reduced rate of 15%. Dividends paid by the Group toindividual US holders of shares or ADSs should qualify for this preferentialdividend treatment. This US tax legislation only applies to individuals subjectto US federal income taxes and therefore the tax position of UK shareholders isunaffected. Individual US holders of shares and ADSs are urged to consult theirtax advisers regarding the application of this US tax legislation to theirparticular circumstances. Notes to the financial resultsfor the 52 weeks ended 2 February 2008 9. Share premium and reserves Other reserves Retained earnings _____________________ _________________________________________ Purchase Share Capital Special of own Hedging Translation Retained Total premium repemption reserves shares reserve reserve reserve reserve(1)______________________________________________________________________________________________________ $m $m $m $m $m $m $m $m______________________________________________________________________________________________________At 28 January 2006 124.8 - 234.8 (15.4) 2.8 (47.2) 1,241.5 1,541.3Recognised income andexpense:- profit for the - - - - - - 266.0 266.0 financial period- cash flow hedges (net) - - - - 2.3 - - 2.3- translation differences - - - - - 57.3 - 57.3- actuarial gain (net) - - - - - - 21.1 21.1Dividends - - - - - - (108.7) (108.7)Equity-settled transactions (net) - - - - - - 8.1 8.1Share options exercised 8.6 - - 2.1 - - (3.0) 7.7Purchase of own shares - 0.3 - - - - (63.4) (63.1)Shares issued to ESOTs 1.3 - - - - - (1.3) -______________________________________________________________________________________________________At 3 February 2007 134.7 0.3 234.8 (13.3) 5.1 10.1 1,360.3 1,732.0 Exchange arising onredenomination ofshare capital (1.4) - - - - - - (1.4)______________________________________________________________________________________________________ 133.3 0.3 234.8 (13.3) 5.1 10.1 1,360.3 1,730.6Recognised income andexpense: - profit for the financial period - - - - - - 215.2 215.2 - cash flow hedges (net) - - - - 3.1 - - 3.1 - translation differences - - - - - (0.1) - (0.1)- actuarial loss (net) - - - - - - (10.5) (10.5)Dividends - - - - - - (123.9) (123.9)Equity-settled transactions (net) - - - - - - (0.3) (0.3)Share options exercised 6.5 - - 2.5 - - (3.5) 5.5Purchase of own shares - 0.1 - - - - (29.0) (28.9)Shares issued to ESOTs 0.4 - - - - - (0.4) -______________________________________________________________________________________________________At 2 February 2008 140.2 0.4 234.8 (10.8) 8.2 10.0 1,407.9 1,790.7______________________________________________________________________________________________________ (1) The retained reserve includes the unrealised surplus arising from revaluing freehold and long leasehold properties of $8.5 million (3 February 2007: $8.5 million). 10. Accounts The financial information set out above does not constitute the Company'sstatutory accounts for the 52 weeks ended 2 February 2008 or the 53 weeks ended3 February 2007, but is derived from those accounts. Statutory accounts for the53 weeks ended 3 February 2007 have been delivered to the Registrar ofCompanies, whereas those for the 52 weeks ended 2 February 2008 will bedelivered following the Company's annual general meeting. The auditors havereported under Section 235 of the Companies Act 1985 on those accounts for eachof those periods; their reports were unqualified and did not contain a statementunder Section 237 (2) or (3) of that Act. Notes to the financial resultsfor the 52 weeks ended 2 February 2008 11. Impact of constant exchange rates and 53rd week 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, profit for the financial period and earnings per share at constantexchange rates and the impact of the 53rd week in 2006/07, including areconciliation to the Group's GAAP results, is analysed below. 2007/08 2006/07 Growth Impact 2006/07 2007/08 Impact 2006/07 2007/08 at of 53rd of actual week on 52 week 52 week exchange on 52 week 52 week exchange basis at growth at rate basis at growth at rates actual actual movement constant constant exchange exchange exchange exchange rates rates rates rates (non-GAAP) (non-GAAP) (non-GAAP) (non-GAAP)________________________________________________________________________________________________________ $m $m % $m $m % $m $m %________________________________________________________________________________________________________ Sales by originand destination:UK 959.6 907.1 5.8 (13.2) 893.9 7.4 57.0 950.9 0.9US 2,705.7 2,652.1 2.0 (52.2) 2,599.9 4.1 - 2,599.9 4.1________________________________________________________________________________________________________ 3,665.3 3,559.2 3.0 (65.4) 3,493.8 4.9 57.0 3,550.8 3.2________________________________________________________________________________________________________ Operating profit:UK - Trading 105.1 103.4 1.6 (3.3) 100.1 5.0 6.4 106.5 (1.3)- Group function (16.0) (13.9) n/a - (13.9) n/a (0.9) (14.8) n/a________________________________________________________________________________________________________ 89.1 89.5 (0.4) (3.3) 86.2 3.4 5.5 91.7 (2.8)US 262.2 326.7 (19.7) (0.5) 326.2 (19.6) - 326.2 (19.6)________________________________________________________________________________________________________ 351.3 416.2 (15.6) (3.8) 412.4 (14.8) 5.5 417.9 (15.9)________________________________________________________________________________________________________ Profit before tax 333.5 400.8 (16.8) (3.2) 397.6 (16.1) 6.1 403.7 (17.4)________________________________________________________________________________________________________ Profit for the financial period 215.2 266.0 (19.1) (2.1) 263.9 (18.4) 4.3 268.2 (19.7)________________________________________________________________________________________________________Earnings per share 12.6c 15.4c (18.2) (0.1)c 15.3c (17.5) 0.2c 15.5c (18.7)________________________________________________________________________________________________________ Notes to the financial results for the 52 weeks ended 2 February 2008 12. Reconciliation of IFRS to US GAAP Effect on profit for the financial period of differences between IFRS and USGAAP 52 weeks 53 weeks ended ended 2 February 3 February 2008 2007 $m $m________________________________________________________________________________ Profit for the financial period in accordance with IFRS 215.2 266.0________________________________________________________________________________ Sale and leaseback transactions 1.5 1.5Pensions (2.8) (4.5)Share-based payment 3.8 (4.5)Depreciation of revalued properties 0.2 -Taxation on reconciling items 1.9 0.2________________________________________________________________________________US GAAP adjustments before change in accounting principle 4.6 (7.3)Cumulative effect of change in accounting principle - (6.0)________________________________________________________________________________Profit attributable to equity holders of the Company in accordance with US GAAP 219.8 252.7________________________________________________________________________________Earnings per share in accordance with US GAAP - basic 12.9c 14.6c - diluted 12.8c 14.3cWeighted average number of shares outstanding (million) - basic 1,703.8 1,727.6 - diluted 1,721.4 1,765.1________________________________________________________________________________ Effect on funds attributable to equity holders of the Company of differencesbetween IFRS and US GAAP 2008 2007 $m $m Funds attributable to equity holders of the Company in accordance with IFRS 1,806.1 1,746.0 Goodwill in respect of acquisitions (gross) 876.1 876.1Accumulated goodwill amortisation (350.7) (350.7)Sale and leaseback transactions (10.7) (12.2)Pensions - -Depreciation of properties (4.7) (4.9)Revaluation of properties (8.5) (8.5)Share-based payment (1.5) (21.3)Derivatives 8.1 -Taxation on reconciling items 7.0 3.4________________________________________________________________________________ US GAAP adjustments 515.1 481.9________________________________________________________________________________ Funds attributable to equity holders of the Company in accordance with US GAAP 2,321.2 2,227.9________________________________________________________________________________ Reconciliation of funds attributable to equity holders of theCompany in accordance with US GAAP Funds attributable to equity holders of the Company at beginning of period 2,227.9 2,062.9Adoption of SFAS 123(R) - (5.3)________________________________________________________________________________ 2,227.9 2,057.6Retained profit attributable to equity holders of the Company 219.8 252.7(Purchase)/issue of shares (net) (23.5) (55.7)Increase in additional paid-in capital 18.5 2.3Dividends paid (123.9) (108.7)Other comprehensive income 2.6 39.3Translation differences (0.2) 71.9________________________________________________________________________________ 2,321.2 2,259.4Adoption of SFAS 158 - (31.5)________________________________________________________________________________ Funds attributable to equity holders of the Company at end of period 2,321.2 2,227.9________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SIG.L