30th Aug 2006 12:30
Signet Group PLC30 August 2006 Signet Group plc (LSE: SIG and NYSE: SIG) Embargoed until 12.30 p.m. (BST)Unaudited Interim Results for 26 weeks ended 29 July 2006 30 August 2006 SIGNET REPORTS ADVANCE IN HALF YEAR RESULTS Group profit before tax: £58.3m up 11.9%(1)Group like for like sales: up 5.2%Group sales: £810.6m up 12.1%(1)Earnings per share: 2.2p up 10.0%Interim dividend per share: 0.4434p up 7.5% (1) See note 9 for constant currency performance. Operational Highlights: • US: Continued significant outperformance of $59 billion jewellery sector Kay Jewelers' television advertising boosts performance during key trading periods Jared to begin national cable television advertising for Christmas 2006 • UK: Return to growth in total sales Focus on jewellery collections to increase competitive differentiation 2006/07 Store Investment: • US: On track for space increase at top end of 8% -10% target range $90 million capital expenditure on stores planned $115 million investment in working capital anticipated for new stores • UK: Refurbishments in line with normal refit cycle £10 million capital expenditure on stores planned Terry Burman, Group Chief Executive, commented: "The Group had a good first halfwith profit before tax up 11.9%. The US division again grew market sharereflecting an increase of 7.0% in like for like sales and total dollar salesgrowth of 12.7%. The UK business has seen a return to growth in total sales. Asanticipated gross margin was lower in both markets. The trading environment on both sides of the Atlantic during the importantChristmas period will, as usual, significantly influence the outcome for thefull year. The businesses continue to implement initiatives designed tostrengthen their competitive positions and are well placed to compete." Enquiries: Terry Burman, Group Chief Executive +44 (0) 20 7317 9700 Walker Boyd, Group Finance Director +44 (0) 20 7317 9700 Mike Smith, Brunswick +44 (0) 20 7404 5959 Pamela Small, Brunswick +44 (0) 20 7404 5959 Signet operated 1,847 speciality retail jewellery stores at 29 July 2006; theseincluded 1,257 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 590 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. See also www.kay.com, www.jared.com, www.hsamuel.co.ukand www.ernestjones.co.uk. Interim Results Statement GROUP In the 26 weeks to 29 July 2006 Group profit before tax rose by 11.9% to £58.3million (H1 2005/06: £52.1 million), and 8.6% at constant exchange rates. Likefor like sales were up by 5.2% and total sales by 12.1% to £810.6 million (H12005/06: £722.9 million). At constant exchange rates the increase in total saleswas 9.9%. Operating profit rose by 11.7% to £62.0 million (H1 2005/06: £55.5 million), and8.4% at constant exchange rates. Operating margin was little changed at 7.6% (H12005/06: 7.7%). Earnings per share advanced by 10.0% to 2.2p (H1 2005/06: 2.0p),the tax rate being 35.7% (H1 2005/06: 34.5%). The Board has approved an increaseof 7.5% in the interim dividend to 0.4434p per ordinary share (H1 2005/06:0.4125p). The trading environment on both sides of the Atlantic during the importantChristmas period will, as usual, significantly influence the outcome for thefull year. The businesses continue to implement initiatives designed tostrengthen their competitive positions and are well placed to compete. OPERATING REVIEW US Division (circa 73% of Group sales) The US business again significantly outperformed the $59 billion jewellerysector and gained further market share, despite demanding prior yearcomparatives. Like for like sales were up 7.0% and total sales rose by 15.8% to£624.9 million (H1 2005/06: £539.6 million), 12.7% at constant exchange rates.Operating profit rose by 13.1% to £69.1 million (H1 2005/06: £61.1 million), and10.0% at constant exchange rates. As anticipated the gross margin rate was down on last year as a result ofchanges in the sales mix and commodity cost increases. Operating margin was11.1% (H1 2005/06: 11.3%). The bad debt charge at 2.4% of total sales (H1 2005/06: 2.7%) was below the average of the previous five years. Bridal and diamond categories again performed well and the fashion goldselection continued to benefit from collaborative marketing with the World GoldCouncil. Jared's luxury watch ranges performed strongly. The US division'saverage unit selling price rose by 5.0% due to selective price increases and mixchanges. Kay television and print impressions during the Valentine's andMother's Day periods were once again very effective and there will be a furtherincrease in advertising expenditure over the important Christmas period. Jaredwill begin to advertise on national cable television for Christmas 2006 and itis anticipated that network television advertising will replace regionalprogramming in 2007. The annual marketing to sales ratio for the US mall andJared stores is planned to be maintained at a broadly similar level to that oflast year. The division's superior customer service, based on exceptionally welltrained staff, merchandise selection and in-house credit operation remain keycompetitive advantages of the business. It is expected that in 2006/07 US store space will increase at the top end ofthe targeted 8% - 10% range. Capital investment in new and existing stores isplanned to be circa $90 million and investment in working capital, that isinventory and receivables, associated with space growth of $115 million isanticipated. It is forecast that this will be largely funded from the cash flowgenerated by the US division. The change in store numbers by format, togetherwith the expected long term potential for each format is set out below: Format 28 January Net change Long term 2006 planned in potential 2006/07KayMall 746 +31-33 850+Off-mall 31 +21 c.500Outlet centres 1 +4 50-100Metropolitan 3 0 c.50 ---------- ----------- -----------Kay total 781 +56-58 1,450+Regional brands 330 +21 c.700Jared 110 +22-24 250+ ---------- ----------- -----------Total 1,221 +99-103 2,400+ ---------- ----------- ----------- UK Division (circa 27% of Group sales) Trading conditions in the UK remained challenging throughout the first half.Against this background like for like sales were unchanged (H.Samuel -1.6% andErnest Jones +1.8%). Total sales increased by 1.3% to £185.7 million (H1 2005/06: £183.3 million). The operating loss was £3.4 million (H1 2005/06: loss £2.4million). As anticipated the gross margin rate was down on last year's level dueto higher commodity costs, sales mix and promotional activity. Tight control ofcosts and inventory was maintained. Initiatives to enhance the merchandise selection continue to be implemented withparticular focus on jewellery collections to increase competitivedifferentiation. Customer service remains a priority and redesigned stafftraining programmes have been introduced. Television commercials, with a newcreative execution, are currently being produced for Christmas. In line with the normal refit cycle the number of store refurbishments this yearis planned to be significantly lower than last year. By Christmas 2006, about260 stores, predominantly H.Samuel, are expected to be trading in the morecustomer service focused format, accounting for about 45% of the division'ssales. 374 H.Samuel (28 January 2006: 386) and 208 Ernest Jones (28 January2006: 207) stores are anticipated to be operating at the year end. Group central costs, financing costs and taxation Group central costs were £3.7 million (H1 2005/06: £3.2 million). Financingcosts rose to £3.7 million (H1 2005/06: £3.4 million). The tax charge was £20.8million (H1 2005/06: £18.0 million). Net debt Net debt at 29 July 2006 was £123.1 million (30 July 2005: £140.3 million).Group gearing (that is the ratio of net debt to shareholders' funds) at 29 July2006 was 14.7% (30 July 2005: 17.4%). Net debt has increased by £24.5 million(H1 2005/06: up £56.8 million) since the start of the financial year reflectingnormal seasonal factors. Fixed capital investment in the current year isexpected to be about £75 million (2005/06: £75.9 million), additional storeinvestment in the US being balanced by lower expenditure in the UK. Other Matters On 14 July 2006 the Company announced a programme to purchase its own ordinaryshares. The shares will either be cancelled or held in treasury. The Company istargeting to buy approximately £50 million before its fiscal year end on 3February 2007 and in the first half purchased 3.2 million shares for £3.1million. On 25 August 2006, further to their announcement of 3 August, Apax and KKRannounced that they have no current intention of approaching the Board ofSignet Group plc to make a possible offer for the Company. ********************* There will be an analysts' meeting today at 2.00 p.m. BST (9.00 a.m. EDT). Forall interested parties there will be a simultaneous audio and video webcastavailable on the Signet Group website (www.signetgroupplc.com) and a livetelephone conference call. The details for the conference call are: European dial-in: +44(0)20 7138 0816 European 48 hr. replay: +44(0)20 7806 1970 Access code: 6039543# US dial-in: +1 718 354 1171 US 48 hr. replay: +1 718 354 1112 Access code: 6039543# A video webcast of the presentation is expected to be available from close ofbusiness today at www.signetgroupplc.com and on the Thomson CCBN platform. 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 2005/06 Annual Report on Form 20-F filed with the U.S. Securitiesand Exchange Commission on May 4, 2006 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. The interim report will be posted to shareholders on or around 12 September2006. Copies of the interim report may be obtained from the Company Secretary,15 Golden Square, London W1F 9JG or downloaded as a pdf file fromwww.signetgroupplc.com . The third quarter sales for the 13 weeks ending 28 October 2006 are expected tobe announced on Thursday 2 November 2006 at 12.30 p.m. GMT. SIGNET GROUP plc Unaudited interim consolidated income statementfor the 26 weeks ended 29 July 2006 13 weeks 13 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended 29 July 30 July 29 July 30 July 28 January 2006 2005 2006 2005 2006----------------------- ----- ------- ------- ------- ------- ------- Notes £m £m £m £m £m----------------------- ----- ------- ------- ------- ------- ------- Sales 2,9 391.0 353.7 810.6 722.9 1,752.3 Cost of sales (355.3) (320.8) (736.6) (653.8) (1,516.3)----------------------- ----- ------- ------- ------- ------- -------Gross profit 35.7 32.9 74.0 69.1 236.0Administrative expenses (18.4) (18.1) (37.7) (36.5) (74.1)Other operating income 12.5 11.2 25.7 22.9 46.3----------------------- ----- ------- ------- ------- ------- -------Operating profit 2,9 29.8 26.0 62.0 55.5 208.2Finance income 3 4.7 2.4 7.6 5.1 9.3Finance expense 3 (6.9) (4.2) (11.3) (8.5) (17.1)----------------------- ----- ------- ------- ------- ------- -------Profit before tax 9 27.6 24.2 58.3 52.1 200.4Taxation 4 (9.8) (8.4) (20.8) (18.0) (69.6)----------------------- ----- ------- ------- ------- ------- -------Profit for thefinancial period 17.8 15.8 37.5 34.1 130.8----------------------- ----- ------- ------- ------- ------- ------------------------------ ----- ------- ------- ------- ------- -------Earnings per share - basic 6 1.0p 0.9p 2.2p 2.0p 7.5p - diluted 1.0p 0.9p 2.2p 2.0p 7.5p----------------------- ----- ------- ------- ------- ------- ------- All of the above relate to continuing activities. Unaudited consolidated balance sheetat 29 July 2006 29 July 30 July 28 January 2006 2005 2006-------------------------- ------- ------- ------- ------- Note £m £m £m-------------------------- ------- ------- ------- ------- AssetsNon-current assetsIntangible assets 23.0 21.1 22.9Property, plant and equipment 249.4 248.1 253.8Other receivables 15.4 13.9 14.3Deferred tax assets 16.8 13.2 17.4-------------------------- ------- ------- ------- ------- 304.6 296.3 308.4-------------------------- ------- ------- ------- -------Current assetsInventories 659.8 619.7 679.7Trade and other receivables 380.2 346.2 430.4Cash and cash equivalents 226.4 28.4 52.5-------------------------- ------- ------- ------- ------- 1,266.4 994.3 1,162.6-------------------------- ------- ------- ------- ------- Total assets 1,571.0 1,290.6 1,471.0-------------------------- ------- ------- ------- ------- LiabilitiesCurrent liabilitiesShort-term borrowings (145.2) (26.1) (151.1)Trade and other payables (183.3) (147.9) (217.1)Deferred income (49.5) (46.9) (50.4)Current tax (25.9) (19.6) (50.2)-------------------------- ------- ------- ------- ------- (403.9) (240.5) (468.8)-------------------------- ------- ------- ------- -------Non-current liabilitiesBank loans (204.3) (142.6) -Trade and other payables (36.7) (32.0) (36.0)Deferred income (64.9) (62.3) (65.6)Provisions (5.8) (5.6) (6.2)Retirement benefit obligation (15.2) (1.9) (15.5)-------------------------- ------- ------- ------- ------- (326.9) (244.4) (123.3)-------------------------- ------- ------- ------- ------- Total liabilities (730.8) (484.9) (592.1)-------------------------- ------- ------- ------- --------------------------------- ------- ------- ------- -------Net assets 840.2 805.7 878.9-------------------------- ------- ------- ------- ------- EquityCapital and reserves attributableto equity shareholdersCalled up share capital 8.7 8.7 8.7Share premium 73.7 68.6 71.7Other reserves 135.3 127.5 138.2Retained earnings 622.5 600.9 660.3-------------------------- ------- ------- ------- -------Total equity 7 840.2 805.7 878.9-------------------------- ------- ------- ------- ------- Unaudited consolidated statement of recognised income and expensefor the 26 weeks ended 29 July 2006 13 weeks 13 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended 29 July 30 July 29 July 30 July 28 January 2006 2005 2006 2005 2006-------------------------- ------- ------- ------- ------- ------- £m £m £m £m £m-------------------------- ------- ------- ------- ------- ------- Profit for the financialperiod 17.8 15.8 37.5 34.1 130.8Translation differences (10.8) 76.9 (27.6) 68.1 33.1Effective portion ofchanges in value of cash flow hedges net of recycling 0.4 3.5 0.5 1.8 1.4Actuarial loss on retirementbenefit scheme - - - - (11.4)-------------------------- ------- ------- ------- ------- -------Total recognised income andexpense for the period 7.4 96.2 10.4 104.0 153.9-------------------------- ------- ------- ------- ------- ------- Unaudited consolidated cash flow statementfor the 26 weeks ended 29 July 2006 13 weeks 13 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended 29 July 30 July 29 July 30 July 28 January 2006 2005 2006 2005 2006-------------------------- ------- ------- ------- ------- ------- £m £m £m £m £m-------------------------- ------- ------- ------- ------- -------Cash flows from operatingactivities: Profit before tax 27.6 24.2 58.3 52.1 200.4Depreciation charges 12.2 10.7 24.9 20.8 46.2Net financing costs 2.2 1.8 3.7 3.4 7.8Decrease/(increase) ininventories 10.6 18.9 (5.8) (9.8) (72.8)(Increase)/decrease in trade and other receivables (8.2) 10.7 28.8 35.3 (51.4)(Decrease)/increase in payables and deferred income (2.5) (32.7) (22.7) (26.0) 53.0Other non-cash movements 0.9 1.1 1.7 2.0 4.9-------------------------- ------- ------- ------- ------- -------Cash generated fromoperations 42.8 34.7 88.9 77.8 188.1Interest paid (2.8) (2.7) (5.5) (5.3) (11.4)Taxation paid (14.6) (18.6) (43.4) (41.7) (64.7)-------------------------- ------- ------- ------- ------- -------Net cash from operatingactivities 25.4 13.4 40.0 30.8 112.0-------------------------- ------- ------- ------- ------- ------- Investing activities:Interest received 2.7 0.7 3.7 1.7 2.4Proceeds from sale ofproperty, plant andequipment - - - - 7.5Purchase of plant andequipment (13.9) (19.4) (28.1) (32.5) (70.4)Purchase of intangibleassets (1.0) (2.0) (1.7) (2.7) (5.5)-------------------------- ------- ------- ------- ------- -------Cash flows from investingactivities (12.2) (20.7) (26.1) (33.5) (66.0)-------------------------- ------- ------- ------- ------- ------- Financing activities:Proceeds from issue of share capital 1.0 0.9 2.2 1.9 3.9Purchase of own shares (3.1) - (3.1) - (2.0)Increase in/(repaymentof) borrowings 182.5 16.9 205.7 14.6 (46.6)Dividends paid (50.1) (45.5) (50.1) (45.5) (52.7)-------------------------- ------- ------- ------- ------- -------Cash flows from financingactivities 130.3 (27.7) 154.7 (29.0) (97.4)-------------------------- ------- ------- ------- ------- ------- Reconciliation of movement in cashand cash equivalents:Net increase/(decrease) in cash andcash equivalents 143.5 (35.0) 168.6 (31.7) (51.4)Opening cash and cash equivalents 77.1 63.3 52.5 59.6 102.4Translation difference 5.8 0.1 5.3 0.5 1.5-------------------------- ------- ------- ------- ------- -------Closing cash and cash equivalents 226.4 28.4 226.4 28.4 52.5-------------------------- ------- ------- ------- ------- ------- Reconciliation of cash flows tomovement in net debt:(1)Change in net debt resultingfrom cash flows (39.0) (51.9) (37.1) (46.3) (4.8)Translation difference 9.0 (12.4) 12.6 (10.5) (10.3)-------------------------- ------- ------- ------- ------- -------Movement in net debt in theperiod (30.0) (64.3) (24.5) (56.8) (15.1)Opening net debt (93.1) (76.0) (98.6) (83.5) (83.5)-------------------------- ------- ------- ------- ------- -------Closing net debt (123.1) (140.3) (123.1) (140.3) (98.6)-------------------------- ------- ------- ------- ------- ------- (1) Net debt represents cash and cash equivalents, short-term borrowings andbank loans. Notes to the unaudited interim financial resultsfor the 26 weeks ended 29 July 2006 1. Basis of preparation These interim financial statements have been prepared applying the accountingpolicies set out in the Group's Annual Report and Accounts for the year ended 28January 2006. 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 28 January 2006 are not the Company'sstatutory accounts for that period. Those accounts have been reported on by theCompany's auditors and have been delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. The report of the auditors wasunqualified and did not contain a statement under Section 237(2) or Section 237(3) of the Companies Act 1985. 2. Segment information 13 weeks 13 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended 29 July 30 July 29 July 30 July 28 January 2006 2005 2006 2005 2006---------------------- ------- ------- ------- ------- ------- £m £m £m £m £m---------------------- ------- ------- ------- ------- ------- Sales by origin anddestination UK, ChannelIslands & Republic ofIreland 94.4 92.0 185.7 183.3 469.6US 296.6 261.7 624.9 539.6 1,282.7---------------------- ------- ------- ------- ------- ------- 391.0 353.7 810.6 722.9 1,752.3---------------------- ------- ------- ------- ------- ------- Operating (loss)/profitUK, Channel Islands &Republic of Ireland - Trading (1.8) (2.0) (3.4) (2.4) 49.1 - Group central costs (1.7) (1.7) (3.7) (3.2) (8.0) ---------------------- ------- ------- ------- ------- ------- (3.5) (3.7) (7.1) (5.6) 41.1US 33.3 29.7 69.1 61.1 167.1---------------------- ------- ------- ------- ------- ------- 29.8 26.0 62.0 55.5 208.2---------------------- ------- ------- ------- ------- ------- The Group's results derive from one business segment - the retailing ofjewellery, watches and gifts. 3. Net financing costs 13 weeks 13 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended 29 July 30 July 29 July 30 July 28 January 2006 2005 2006 2005 2006---------------------- ------- ------- ------- ------- ------- £m £m £m £m £m---------------------- ------- ------- ------- ------- -------Interest payable (5.2) (2.7) (7.9) (5.3) (11.4)Net finance income frompension scheme 0.3 0.2 0.5 0.2 1.2Interest receivable 2.7 0.7 3.7 1.7 2.4---------------------- ------- ------- ------- ------- ------- (2.2) (1.8) (3.7) (3.4) (7.8)---------------------- ------- ------- ------- ------- ------- 4. Taxation The net taxation charges in the profit and loss accounts for the 13 weeks and 26weeks ended 29 July 2006 have been based on the anticipated effective taxationrate for the 53 weeks ending 3 February 2007. Notes to the unaudited interim financial resultsfor the 26 weeks ended 29 July 2006 5. Translation differences The exchange rates used for the translation of US dollar transactions andbalances in these interim statements are as follows: 29 July 30 July 28 January 2006 2005 2006--------------------------------- ------- ------- ------- Income statement (average rate) 1.81 1.86 1.80Balance sheet (closing rate) 1.86 1.76 1.77--------------------------------- ------- ------- ------- The effect of restating the balance sheet at 30 July 2005 to the exchange ratesruling at 29 July 2006 would be to decrease net debt by £6.1 million to £134.2million. Restating the income statement would increase the pre-tax profit forthe 26 weeks ended 30 July 2005 by £1.6 million to £53.7 million. 6. Earnings per share 13 weeks ended 13 weeks ended 26 weeks ended 26 weeks ended 52 weeks ended 29 July 30 July 29 July 30 July 28 January 2006 2005 2006 2005 2006----------------------- ------- ------- ------- ------- ------- £m £m £m £m £m----------------------- ------- ------- ------- ------- ------- Profit attributable toshareholders 17.8 15.8 37.5 34.1 130.8----------------------- ------- ------- ------- ------- ------- Weightedaverage numberof shares inissue(million) 1,740.3 1,736.4 1,739.8 1,736.1 1,736.6Dilutiveeffect ofshare options(million) 1.7 5.0 2.4 5.4 3.3----------------------- ------- ------- ------- ------- -------Dilutedweightedaverage numberof shares(million) 1,742.0 1,741.4 1,742.2 1,741.5 1,739.9----------------------- ------- ------- ------- ------- -------Earnings pershare - basic 1.0p 0.9p 2.2p 2.0p 7.5p- diluted 1.0p 0.9p 2.2p 2.0p 7.5p----------------------- ------- ------- ------- ------- ------- The number of shares in issue at 29 July 2006 was 1,737,801,545 (30 July 2005:1,736,502,948 shares, 28 January 2006: 1,738,843,382 shares). 7. Unaudited changes in total equity 26 weeks ended 29 July 2006 Share Share Revaluation Special Purchase of Retained Total capital premium reserve reserves own shares earnings--------------------------- ------ ------ ------ ------ ------ ------ ------ £m £m £m £m £m £m £m--------------------------- ------ ------ ------ ------ ------ ------ ------ Balance at 28 January 2006 8.7 71.7 4.3 142.2 (8.3) 660.3 878.9Recognised income andexpense: - Profit for the financial period - - - - - 37.5 37.5 - Effective portion of changes in value of cash flow hedges net of recycling - - - - - 0.5 0.5 - Translation differences - - - - - (27.6) (27.6)Equity-settled transactions - - - - - 2.1 2.1Dividend - - - - - (50.1) (50.1)Share options exercised - 2.0 - - 0.2 - 2.2Purchase of own shares - - - - (3.1) - (3.1)--------------------------- ------ ------ ------ ------ ------ ------ ------Balance at 29 July 2006 8.7 73.7 4.3 142.2 (11.2) 622.5 840.2--------------------------- ------ ------ ------ ------ ------ ------ ------ Notes to the unaudited interim financial resultsfor the 26 weeks ended 29 July 2006 8. Dividend A dividend of 0.4434p per share will be paid on 3 November 2006 to shareholderson the register of members at the close of business on 22 September 2006. 9. 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. 26 weeks ended 29 July 2006 26 weeks 26 weeks Growth at Impact of At constant Growth at ended ended actual exchange exchange constant 29 July 30 July exchange rate rates exchange rates 2006 2005 rates movement (non-GAAP) (non-GAAP) ------------------------------ ------- ------- ------- ------- ------- ------- £m £m % £m £m %------------------------------ ------- ------- ------- ------- ------- ------- Sales by origin and destinationUK, Channel Islands &Republic of Ireland 185.7 183.3 1.3 - 183.3 1.3US 624.9 539.6 15.8 14.9 554.5 12.7------------------------------ ------- ------- ------- ------- ------- ------- 810.6 722.9 12.1 14.9 737.8 9.9------------------------------ ------- ------- ------- ------- ------- ------- Operating (loss)/profitUK, Channel Islands& Republic of Ireland - Trading (3.4) (2.4) n/a - (2.4) n/a - Group central costs (3.7) (3.2) n/a - (3.2) n/a------------------------------ ------- ------- ------- ------- ------- ------- (7.1) (5.6) n/a - (5.6) n/aUS 69.1 61.1 13.1 1.7 62.8 10.0------------------------------ ------- ------- ------- ------- ------- ------- 62.0 55.5 11.7 1.7 57.2 8.4------------------------------ ------- ------- ------- ------- ------- ------- Profit before tax 58.3 52.1 11.9 1.6 53.7 8.6------------------------------ ------- ------- ------- ------- ------- ------- At 29 July 2006 29 July 30 July Impact of At constant 2006 2005 exchange exchange rates rate movement (non-GAAP)------------------- --------- --------- --------- --------- £m £m £m £m------------------- --------- --------- --------- --------- Net debt (123.1) (140.3) 6.1 (134.2)------------------- --------- --------- --------- --------- Independent review report by KPMG Audit Plc to Signet Group plc Introduction We have been instructed by the Company to review the financial information setout on pages 6 to 12 for the 26 weeks ended 29 July 2006. We have read the otherinformation contained in the interim report and considered whether it containsany apparent misstatements or material inconsistencies with the financialinformation. This report is made solely to the Company in accordance with the terms of ourengagement to assist the Company in meeting the requirements of the ListingRules of the Financial Services Authority. Our review has been undertaken sothat we might state to the Company those matters we are required to state to itin this report and for no other purpose. To the fullest extent permitted by law,we do not accept or assume responsibility to anyone other than the Company forour review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the UK. A review consistsprincipally of making enquiries of management and applying analytical proceduresto the financial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Statements on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly, we donot express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the 26 weeks ended29 July 2006. KPMG Audit PlcChartered AccountantsLondon 30 August 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SIG.L