11th Jan 2007 12:33
Signet Group PLC11 January 2007 Signet Group plc (LSE: SIG and NYSE: SIG) Embargoed until 12.30 p.m. (GMT) CHRISTMAS LIKE FOR LIKE SALES UP 5.9% PROFIT TO BE WITHIN THE RANGE OF MARKET EXPECTATIONS Like for like sales 9 weeks to 30 December 2006 Group up 5.9% US up 7.5% UK up 1.7% Like for like sales 48 weeks to 30 December 2006 Group up 5.5% US up 7.1% UK up 1.2% COMMENT Terry Burman, Group Chief Executive, commented: "Group like for like sales wereup 5.9% over the nine week period with a strong performance by the US business(c.74% of Group sales) and, in a challenging marketplace, a satisfactory outcomeby the UK division. Profit before tax for 2006/07 is currently expected to bewithin the range of market estimates and to fall between £205 million and £212million on a 53 week basis." "In the US, the business again significantly outperformed its main competitionand increased market share. Like for like sales rose by 7.5% and total dollarsales increased by 13.9% further extending the consistent growth record of thedivision. Jared, the off-mall destination superstores, performed strongly, asdid Kay, which built further on its sector-leading position. The divisionaloperating profit is anticipated to be ahead for the year as a whole." "In the UK, like for like sales increased by 1.7% and full year divisionaloperating profit is expected to be ahead of last year. The business continues toachieve a healthy operating margin, a good return on capital and strong cashflow." Enquiries: Terry Burman, Group Chief Executive +44 (0) 20 7317 9700 Walker Boyd, Group Finance Director +44 (0) 20 7317 9700 Tom Buchanan, Brunswick +44 (0) 20 7404 5959 Pamela Small, Brunswick +44 (0) 20 7404 5959 Signet operated 1,896 speciality retail jewellery stores at 30 December 2006;these included 1,314 stores in the US, where the Group trades as "Kay Jewelers","Jared The Galleria Of Jewelry" and under a number of regional names. At thesame date Signet also operated 582 stores in the UK, where the Group trades as"H.Samuel", "Ernest Jones" and "Leslie Davis". Further information on Signet isavailable at www.signetgroupplc.com. See also www.kay.com, www.jared.com,www.hsamuel.co.uk and www.ernestjones.co.uk. GROUP In the nine week period to 30 December 2006 like for like sales were up by 5.9%.Total sales rose by 10.2% at constant exchange rates and by 1.4% on a reportedbasis (see note 1). In the 48 weeks to 30 December 2006 like for like sales advanced by 5.5%. Totalsales increased by 9.9% at constant exchange rates and by 6.9% on a reportedbasis (see note 1). Profit before tax for 2006/07 is currently expected to be within the range ofmarket expectations and to fall between £205 million and £212 million on a 53week basis. For the year as a whole the weakness of the US dollar is anticipatedto have adversely impacted profit before tax by some £7 million reflecting themovement in average US dollar exchange rate from £1/$1.80 in 2005/06 to c.£1/$1.88 in 2006/07. The Group intends, subject to Court approval, to move to USdollar reporting from the start of its next financial year. The Group's cash flow for the full year is expected to show a small outflow inthe range of £10 million to £20 million before the share buy back programme. Thebalance sheet remains strong. UNITED STATES (circa 74% of Group annual sales) In the nine week period to 30 December 2006, US like for like sales rose by 7.5%and total dollar sales increased by 13.9% (see note 1) building on theconsistent growth record of the business. Total sales on a reported basis wereup by only 1.7% as a result of the significant weakening in the US dollarexchange rate in the period compared to last year. The business continued to implement its proven growth strategy, to execute aprogramme of continuous improvement and to focus on its competitive advantages.Television advertising for Kay and Jared were again important in helping todrive sales growth. "Circle" and "Journey" products performed particularly well.As a result of product mix changes and a more competitive pricing environment,gross margin declined slightly more than expected. In the 48 weeks to 30 December 2006, like for like sales increased by 7.1%, withtotal sales up by 13.1% at constant exchange rates (see note 1) and by 8.9% on areported basis. Net new store space has increased by 11% in 2006/07. The baddebt percentage for the year is anticipated to be a little below last year. Thedivisional operating profit for 2006/07 is expected to be ahead of last year. UNITED KINGDOM (circa 26% of Group annual sales) In the nine week period to 30 December 2006, challenging trading conditionscontinued to prevail and the UK division's like for like sales rose by 1.7%,with total sales up by 0.8%. In line with the division's strategy the averageselling price and diamond participation again increased. H.Samuel's performancewas encouraging and benefited from a range of initiatives undertaken during2006. Ernest Jones' performance over Christmas was below that of the year todate, primarily due to a slowing in the growth of the watch category. In the 48 weeks to 30 December 2006, like for like sales rose by 1.2% and totalsales by 1.4%. Pricing discipline was maintained and the gross margin isanticipated to be similar to 2005/06. Divisional operating profit is expected tobe ahead of last year, and the business continues to achieve a healthy operatingmargin, a good return on capital and strong cash flow. The breakdown of UK like for like sales performance is shown below: Period Ernest Jones H.Samuel UK (c. 11% of (c. 15% of (c. 26% of Group) Group) Group)9 weeks to 30December 2006 0.4% 2.7% 1.7%----------------------------- ------ ------ ------48 weeks to 30December 2006 1.8% 0.8% 1.2%------------------------------ ------ ------ ------ SHARE BUY BACK PROGRAMME The Company intends to complete its previously announced share buy backprogramme of approximately £50 million, but it is now unlikely that this targetwill be achieved by the end of its fiscal year on 3 February 2007. To date, justover £31 million worth of shares have been repurchased. INVESTOR RELATIONS PROGRAMME DETAILS There will be a conference call for all interested parties today at 2.00 p.m.GMT (9.00 a.m. EST and 6.00 a.m. Pacific Time) and a simultaneous audio webcastat www.signetgroupplc.com. To help ensure the conference call begins in a timelymanner, could all participants please dial in 5 to 10 minutes prior to thescheduled start time. The call details are: European dial-in: +44 (0) 20 7806 1961 European 48hr. replay: +44 (0) 20 7806 1970 Pass code: 9661433# US dial-in: +1 718 354 1391 US 48hr. replay: +1 718 354 1112 Pass code: 9661433# Fourth Quarter Sales Fourth quarter sales figures are expected to be announced on 8 February 2007. Investor Day and Store Tour, Akron, Ohio, Thursday 10 May 2007 It is intended to hold an Investor Day and Store Tour for professional investorsin Akron, Ohio on Thursday 10 May 2007. Note 1 - Impact of constant exchange rates The Group has historically used constant exchange rates to compareperiod-to-period changes in certain financial data. This is referred to as 'atconstant exchange rates' throughout this release. The Group considers this to bea useful measure for analysing and explaining changes and trends in the Group'sresults. The impact of the re-calculation of sales growth at constant exchangerates is shown below. 9 weeks to 30 December 2006 Growth at Impact of Growth at actual exchange exchange rate constant movement exchange rates rates (non-GAAP)-------------------- -------- -------- -------- % % %-------------------- -------- -------- --------Sales by origin and destinationUK, ChannelIslands &Republic ofIreland 0.8 - 0.8US 1.7 12.2 13.9-------------------- -------- -------- -------- 1.4 8.8 10.2-------------------- -------- -------- -------- 48 weeks to 30 December 2006 Growth at Impact of Growth at actual exchange exchange rate constant movement exchange rates rates (non-GAAP)-------------------- -------- -------- -------- % % %-------------------- -------- -------- --------Sales by origin and destinationUK, ChannelIslands &Republic ofIreland 1.4 - 1.4US 8.9 4.2 13.1-------------------- -------- -------- -------- 6.9 3.0 9.9-------------------- -------- -------- -------- 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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