RNS Number:2796S
GUS PLC
20 November 2003
GUS plc
Group profit and loss account
for the six months ended 30 September 2003
--------------------------- -------- -------- -------- --- -------- --- -------
Six months Six months Six months Six months Year
to 30.9.03 to 30.9.03 to 30.9.03 to 30.9.02 to 31.3.03
Before Exceptional Total
Exceptional Items
Items (Note 3)
#m #m #m #m #m
--------------------------- -------- -------- -------- --- -------- --- -------
Turnover 3,771 - 3,771 3,038 7,146
--------------------------- -------- -------- -------- --- -------- --- -------
Continuing
operations 3,502 - 3,502 2,247 5,473
Discontinued
operations 269 - 269 791 1,673
--------------------------- -------- -------- -------- --- -------- --- -------
Cost of sales (2,137) - (2,137) (1,718) (4,130)
--------------------------- -------- -------- -------- --- -------- --- -------
Gross profit 1,634 - 1,634 1,320 3,016
-------- -------- -------- -------- -------
Net operating
expenses
before
goodwill
charge (1,285) - (1,285) (1,105) (2,408)
Goodwill
charge (91) - (91) (56) (162)
-------- -------- -------- -------- -------
Net operating
expenses (1,376) - (1,376) (1,161) (2,570)
--------------------------- -------- -------- -------- --- -------- --- -------
Operating
profit 258 - 258 159 446
--------------------------- -------- -------- -------- --- -------- --- -------
Continuing
operations 258 - 258 145 430
Discontinued
operations - - - 14 16
--------------------------- -------- -------- -------- --- -------- --- -------
Share of
operating
profit of BL
Universal PLC
(joint
venture) 15 - 15 13 26
Share of
operating
profit of
associated
undertakings 26 - 26 19 44
--------------------------- -------- -------- -------- --- -------- --- -------
Trading profit 299 - 299 191 516
Profit on
Initial Public
Offering of
Burberry -
continuing
operations - - - 161 161
-------- -------- -------- -------- -------
Disposal of
Home Shopping
and Reality
businesses -
discontinued
operations: - - - - (210)
Provision for loss on
disposal -------- -------- -------- -------- -------
Realised loss
on disposal - (226) (226) - -
Less:
utilisation of
provision - 210 210 - -
-------- -------- -------- -------- -------
- (16) (16) - -
Loss on sale
of other
businesses -
continuing
operations - - - (1) -
--------------------------- -------- -------- -------- --- -------- --- -------
Profit on
ordinary
activities
before
interest 299 (16) 283 351 467
Net interest (36) - (36) (22) (58)
--------------------------- -------- -------- -------- --- -------- --- -------
Profit on
ordinary
activities
before
taxation 263 (16) 247 329 409
-------- --------
Tax on profit on ordinary
activities -------- -------- -------
- UK (62) (36) (95)
- Overseas (23) (18) (46)
-------- -------- -------
(85) (54) (141)
--------------------------- -------- -------- -------- --- -------- --- -------
Profit on
ordinary
activities
after taxation 162 275 268
Equity
minority
interests (10) (7) (17)
--------------------------- -------- -------- -------- --- -------- --- -------
Profit for the
period 152 268 251
Dividends (80) (68) (232)
--------------------------- -------- -------- -------- --- -------- --- -------
Retained
profit for the
period 72 200 19
--------------------------- -------- -------- -------- --- -------- --- -------
Profit before
amortisation
of goodwill, 354 247 642
exceptional items and
taxation - #m -------- --- -------- --- -------
Earnings per share
- Basic 15.3p 26.9p 25.1p
- Diluted 15.2p 26.7p 25.0p
Earnings per share before amortisation
of goodwill
and exceptional items
- Basic 26.0p 18.0p 47.8p
- Diluted 25.7p 17.8p 47.5p
Dividend per
share 8.0p 6.9p 23.3p
-------------------------- -------- -------- -------- --- -------- --- -------
GUS plc
Statement of total recognised gains and losses
for the six months ended 30 September 2003
-------------------------------- ----------- ---------- ---------
Six months Six months Year
to 30.9.03 to 30.9.02 to 31.3.03
#m #m #m
-------------------------------- ----------- ---------- ---------
Profit for the period 152 268 251
Revaluation of properties 3 7 15
Currency translation differences 46 31 71
-------------------------------- ----------- ---------- ---------
Total recognised gains and losses for
the period 201 306 337
-------------------------------- ----------- ---------- ---------
Reconciliation of movement in shareholders' funds
for the six months ended 30 September 2003
-------------------------------- ----------- ----------- ---------
Six months Six months Year
to 30.9.03 to 30.9.02 to 31.3.03
#m #m #m
-------------------------------- ----------- ----------- ---------
Profit for the period 152 268 251
Dividends - Interim (80) (68) (68)
- Final - - (164)
-------------------------------- ----------- ----------- ---------
72 200 19
Goodwill on disposals 11 3 19
Shares issued under option schemes 20 - 3
Shares cancelled on purchase - - (1)
Revaluation of properties 3 7 15
Currency translation differences 46 31 71
-------------------------------- ----------- ----------- ---------
152 241 126
Opening shareholders' funds 2,543 2,417 2,417
-------------------------------- ----------- ----------- ---------
Closing shareholders' funds 2,695 2,658 2,543
-------------------------------- ----------- ----------- ---------
Analysis of net borrowings
at 30 September 2003
-------------------------------- ----------- ----------- ---------
30.9.03 30.9.02 31.3.03
#m #m #m
-------------------------------- ----------- ----------- ---------
Cash and other liquid resources 341 213 283
Debt due within one year (177) (569) (678)
Finance leases (16) (9) (19)
Debt due after more than one year (1,661) (828) (1,672)
-------------------------------- ----------- ----------- ---------
Net debt at end of period (1,513) (1,193) (2,086)
Non-recourse borrowings - (83) -
-------------------------------- ----------- ----------- ---------
Net borrowings at end of period (1,513) (1,276) (2,086)
-------------------------------- ----------- ----------- ---------
GUS plc
Group balance sheet
at 30 September 2003
------------------------------- -------- -------- --------
30.9.03 30.9.02 31.3.03
#m #m #m
------------------------------- -------- -------- --------
Fixed assets
Goodwill 2,388 1,530 2,436
Other intangible assets 174 181 178
Tangible assets 1,064 884 1,043
Investment in joint venture 192 205 210
Other investments 118 132 128
------------------------------- -------- -------- --------
3,936 2,932 3,995
------------------------------- -------- -------- --------
Current assets
Stocks 757 650 853
-------- -------- --------
Debtors - due within one year 1,083 1,777 1,803
- due after more than one year 450 212 265
-------- -------- --------
- total 1,533 1,989 2,068
-------- -------- --------
Securitised receivables - 145 -
Less: non-recourse borrowings - (83) -
-------- -------- --------
- 62 -
Investments 126 62 109
Bank balances and cash 365 262 243
------------------------------- -------- -------- --------
2,781 3,025 3,273
------------------------------- -------- -------- --------
Creditors (1,983) (2,180) (2,699)
Amounts due within one year
------------------------------- -------- -------- --------
Net current assets 798 845 574
------------------------------- -------- -------- --------
Total assets less current liabilities 4,734 3,777 4,569
Creditors - amounts due after more than one year (1,788) (908) (1,791)
Provisions for liabilities and charges (147) (123) (138)
------------------------------- -------- -------- --------
Net assets 2,799 2,746 2,640
------------------------------- -------- -------- --------
Capital and reserves
Called up share capital 253 252 252
Share premium account 25 3 6
Revaluation reserve 115 126 131
Profit and loss account 2,302 2,277 2,154
------------------------------- -------- -------- --------
Shareholders' funds 2,695 2,658 2,543
Minority interests 104 88 97
------------------------------- -------- -------- --------
Capital employed 2,799 2,746 2,640
------------------------------- -------- -------- --------
GUS plc
Group cash flow statement
for the six months ended 30 September 2003
---------------------------------- ---------- ---------- --------
Six months Six months Year
to 30.9.03 to 30.9.02 to 31.3.03
#m #m #m
---------------------------------- ---------- ---------- --------
Cash flow from operating activities
Operating profit 258 159 446
Depreciation and amortisation charges 240 168 407
Change in working capital (53) (50) 7
---------------------------------- ---------- ---------- --------
445 277 860
Dividends received from associated
undertakings 31 12 24
Returns on investments and servicing of
finance (17) 19 (11)
Taxation (60) (57) (141)
Capital expenditure (158) (165) (329)
Financial investment 13 (25) (13)
Acquisition of subsidiaries (49) (150) (1,241)
Disposal of subsidiaries 445 243 239
Dividends paid (164) (151) (220)
---------------------------------- ---------- ---------- --------
Cash inflow/(outflow) before management
of 486 3 (832)
liquid resources and financing
Management of liquid resources 54 (27) (134)
Financing - issue of shares 20 - 3
- purchase of own shares for
cancellation - - (1)
- change in debt and lease financing (449) 39 934
---------------------------------- ---------- ---------- --------
Increase/(decrease) in cash 111 15 (30)
---------------------------------- ---------- ---------- --------
Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in cash 111 15 (30)
Cash outflow/(inflow) from movement in
debt and lease financing 449 (39) (934)
Cash (inflow)/outflow from movement in
liquid resources (54) 27 134
---------------------------------- ---------- ---------- --------
Movement in net debt resulting from
cash flows 506 3 (830)
Loans and finance leases acquired with
subsidiary - - (2)
New finance leases (3) (1) (7)
Exchange movements 70 89 37
---------------------------------- ---------- ---------- --------
Movement in net debt 573 91 (802)
Net debt at beginning of period (2,086) (1,284) (1,284)
---------------------------------- ---------- ---------- --------
Net debt at end of period (1,513) (1,193) (2,086)
---------------------------------- ---------- ---------- --------
GUS plc
Divisional analysis
for the six months ended 30 September 2003
Turnover Profit before taxation
------------------- --------------------------
Six months to Year to Six months to Year to
-------------------- --------- -------------------- ---------
30.9.03 30.9.02 31.3.03 30.9.03 30.9.02 31.3.03
#m (Restated) (Restated) #m (Restated) (Restated)
(Note 2) (Note 2) (Note 2) (Note 2)
#m #m #m #m
---------------------- ------- -------- -------- -------- -------- --------
Argos Retail Group
Continuing operations:
Argos 1,390 1,218 3,048 73.9 58.0 240.8
Homebase* 938 - 251 71.5 - 2.2
Financial
Services 25 14 34 (3.3) (6.2) (13.1)
Wehkamp 117 107 228 10.9 10.7 19.9
------- -------- -------- -------- -------- -------
2,470 1,339 3,561 153.0 62.5 249.8
Discontinued
operations 269 791 1,673 - 13.7 35.3
---------------------- ------- -------- -------- -------- -------- -------
2,739 2,130 5,234 153.0 76.2 285.1
Experian
Experian North
America 365 355 718 93.9 80.6 171.5
Experian
International 273 223 483 51.8 37.5 84.9
---------------------- ------- -------- -------- -------- -------- -------
638 578 1,201 145.7 118.1 256.4
Burberry 321 274 594 66.9 55.1 116.7
South African
Retailing 73 54 114 19.8 13.8 31.8
Property - - - 15.0 12.6 25.9
Central
activities 5 9 18 (9.8) (6.6) (15.4)
Inter-divisional
turnover
(principally
Experian) (5) (7) (15)
---------------------- ------- -------- -------- -------- -------- -------
3,771 3,038 7,146 390.6 269.2 700.5
---------------------- ------- -------- --------
Net interest (36.2) (22.4) (58.1)
--------------------- -------- -------- -------- -------- -------- -------
Profit before
amortisation of
goodwill,
exceptional
items and
taxation 354.4 246.8 642.4
Amortisation of
goodwill (Note
2) (91.4) (56.0) (142.9)
Exceptional
items (Note 3) (15.6) 138.0 (90.1)
--------------------- -------- -------- -------- -------- -------- -------
Profit before
taxation 247.4 328.8 409.4
--------------------- -------- -------- -------- -------- -------- -------
* The results of Homebase for the current period are in respect of the seven
months to 30 September 2003.
Geographical analysis
for the six months ended 30 September 2003
Turnover Divisional profit
------------------- ------------------
Six months to Year to Six months to Year to
------------------- --------- ------------------ ---------
30.9.03 30.9.02 31.3.03 30.9.03 30.9.02 31.3.03
#m #m #m #m #m #m
--------------------- -------- -------- ------- --- ------- -------- --------
United Kingdom
& Ireland 2,876 2,246 5,338 229.4 135.9 416.8
Continental
Europe 337 286 669 32.4 25.2 47.1
North America 434 411 860 98.5 83.6 185.8
Rest of World 124 95 279 30.3 24.5 50.8
--------------------- -------- -------- ------- --- ------- -------- --------
3,771 3,038 7,146 390.6 269.2 700.5
--------------------- -------- -------- ------- --- ------- -------- --------
GUS plc
Notes to the interim financial statements
for the six months ended 30 September 2003
1. Basis of preparation
The interim report comprises the unaudited results for the six months ended 30
September 2003 and 30 September 2002 and the audited results for the twelve
months ended 31 March 2003. The financial information for the twelve months
ended 31 March 2003 has been extracted from the Group's statutory financial
statements for that year. The interim financial statements are unaudited and do
not constitute statutory accounts but have been formally reviewed by the
auditors and their report is set out on page 29.
2. Divisional analysis
On 27 May 2003 the Group announced the disposal of its Home Shopping and Reality
businesses and, accordingly, the results of these operations are classified as
discontinued. To give an indication of ongoing profitability, continuing and
discontinued operations are now separately reported within the results of Argos
Retail Group with comparative figures restated. As the completion statements in
respect of the sold businesses are still subject to agreement, the profits and
losses of the discontinued operations for the current period will be reported in
the Group's statutory financial statements for the year to 31 March 2004. The
results of the discontinued operations in the comparative periods are analysed
below:
Turnover Profit before taxation
---------------- ------------------
Six months to Year to Six months to Year to
------------------- ---------- -------- ---- ----------- ---------
Discontinued operations 30.9.02 31.3.03 30.9.02 31.3.03
#m #m #m #m
------------------- ---------- -------- ---- ----------- ---------
Argos 66 144 (5.9) (2.6)
Home Shopping UK &
Ireland 704 1,482 9.5 15.4
Financial Services - - 8.4 17.7
Home Shopping
Continental Europe 21 47 1.7 4.8
------------------- ---------- -------- ---- ----------- ---------
791 1,673 13.7 35.3
------------------- ---------- -------- ---- ----------- ---------
Comparative figures for Homebase for the year ended 31 March 2003 cover the post
acquisition period from 20 December 2002.
As previously announced, from 1 April 2003 the results for the Finance Division
and gusco.com are reported within Central activities, which also includes
Central costs. Comparative figures have been restated. For the six months ended
30 September 2002 and the year ended 31 March 2003 respectively, turnover of #9m
and #18m and profits of #4.0m and #6.6m for the Finance Division, and losses of
#1.4m and #2.7m in respect of gusco.com, are included within Central activities.
Six months to Year to
----------------- ---------
The amortisation of goodwill is analysed as
follows: 30.9.03 30.9.02 31.3.03
#m #m #m
------------------------------ --------- -------- ---------
Argos Retail Group 63 44 99
Experian 24 9 38
Burberry 4 3 6
------------------------------ --------- -------- ---------
91 56 143
------------------------------ --------- -------- ---------
There was a further goodwill charge of #19m in the year ended 31 March 2003
which related to goodwill, previously written off to reserves, on the closure of
Innovations.
GUS plc
Notes to the interim financial statements (continued)
for the six months ended 30 September 2003
Six months to Year to
----------------- --------
3. Exceptional items 30.9.03 30.9.02 31.3.03
#m #m #m
----------------------------------- -------- -------- --------
Exceptional items comprise:
Continuing operations
Profit on Initial Public Offering of Burberry - 161 161
Cost of employee share schemes in connection
with the Initial Public Offering of Burberry - (22) (22)
----------------------------------- -------- -------- --------
- 139 139
Loss on sale of businesses - (1) -
----------------------------------- -------- -------- --------
- 138 139
----------------------------------- -------- -------- --------
Discontinued operations
Disposal of Home Shopping and Reality businesses:
Provision for loss on disposal - - (210)
-------- -------- --------
Realised loss on disposal (226) - -
Less: utilisation of provision 210 - -
-------- -------- --------
(16) - -
-------- -------- --------
(16) - (210)
Impairment of goodwill - - (19)
----------------------------------- -------- -------- --------
(16) - (229)
----------------------------------- -------- -------- --------
Exceptional (charge)/profit (16) 138 (90)
----------------------------------- -------- -------- --------
The disposal of Home Shopping and Reality businesses was announced on 27 May
2003. The provision for loss on disposal charged in the year ended 31 March 2003
represented the difference between the sale proceeds of #590m and the net assets
sold of approximately #800m, subject to the agreement of the completion
statements. The further charge in the six months ended 30 September 2003 relates
to professional and other costs associated with the transaction, such as the
resulting reorganisation of the Argos Retail Group shared services
infrastructure, and the charge of #11m in respect of goodwill previously written
off to reserves.
The impairment of goodwill in the year ended 31 March 2003 related to goodwill,
previously written off to reserves, on the closure of Innovations.
4. Taxation
The effective rate of tax, before amortisation of goodwill, loss on sale of
businesses and the profit, in the comparative period, on the Initial Public
Offering of Burberry, is based on the estimated tax charge for the full year at
a rate of 23.9% (2003: 22.7%).
Average Closing
----------------- ----------------
Six months to Year to
5. Foreign
currency 30.9.03 30.9.02 31.3.03 30.9.03 30.9.02 31.3.03
------------------- ------- ------- ------- --- ------- ------- -------
The principal exchange rates used were as
follows:
US dollar 1.62 1.51 1.55 1.66 1.57 1.58
Euro 1.43 1.59 1.55 1.43 1.59 1.45
South African
rand 12.16 15.76 14.89 11.59 16.52 12.48
---------------------- ------- ------- ------- --- ------- ------- -------
Assets and liabilities of overseas undertakings are translated into sterling at
the rates of exchange ruling at the balance sheet date and the profit and loss
account is translated into sterling at average rates of exchange.
GUS plc
Notes to the interim financial statements (continued)
for the six months ended 30 September 2003
Six months to Year to
30.9.03 30.9.02 31.3.03
6. Basic and diluted earnings per share pence pence pence
----------------------------------- -------- -------- -------
Basic earnings per share before amortisation 26.0 18.0 47.8
of goodwill and exceptional items
Effect of amortisation of goodwill (9.1) (5.6) (14.3)
Effect of exceptional items (1.6) 14.5 (8.4)
----------------------------------- -------- -------- -------
Basic earnings per share 15.3 26.9 25.1
----------------------------------- -------- -------- -------
The calculation of basic earnings per share is based on profit for the period
divided by the weighted average number of Ordinary shares in issue during the
period. Basic earnings per share before amortisation of goodwill and exceptional
items is disclosed to indicate the underlying profitability of the Group.
Six months to Year to
---------------- -------
30.9.03 30.9.02 31.3.03
#m #m #m
----------------------------------- -------- -------- -------
Earnings before amortisation of goodwill and
exceptional items 259 179 476
Effect of amortisation of goodwill (91) (56) (142)
Effect of exceptional items (16) 145 (83)
----------------------------------- -------- -------- -------
Profit for the period 152 268 251
----------------------------------- -------- -------- -------
The calculation of diluted earnings per share reflects the potential dilutive
effect of the exercise of employee share options.
----------------------------------- -------- -------- -------
30.9.03 30.9.02 31.3.03
m m m
----------------------------------- -------- -------- -------
Weighted average number of Ordinary shares in
issue during the period* 997.1 995.7 995.9
Dilutive effect of options outstanding 8.9 8.3 7.3
----------------------------------- -------- -------- -------
Diluted weighted average number of Ordinary
shares in issue during the period 1,006.0 1,004.0 1,003.2
----------------------------------- -------- -------- -------
* Excluding those held by The GUS ESOP Trust, The GUS ESOP Trust No. 2 and The
GUS ESOP Trust No. 3.
7. Dividend
The interim dividend will be paid on 6 February 2004 to shareholders on the
Register at the close of business on
9 January 2004.
8. Directors' responsibilities
The maintenance and integrity of the GUS plc website is the responsibility of
the directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no
responsibilities for any changes that may have occurred to the interim report
since it was initially presented on the website. Legislation in the United
Kingdom governing the preparation and dissemination of financial information may
differ from legislation in other jurisdictions.
Independent review report to GUS plc
Introduction
We have been instructed by GUS plc to review the financial information of GUS
plc and its subsidiaries ("the Group"), which comprises the Group profit and
loss account, the statement of total recognised gains and losses, the
reconciliation of movement in shareholders' funds, the analysis of net
borrowings, the Group balance sheet, the Group cash flow statement, the
divisional analysis, the geographical analysis and the notes to the interim
financial statements. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information. This report, including the conclusion, has been
prepared for and only for GUS plc for the purpose of the Listing Rules of the
Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2003.
PricewaterhouseCoopers LLP
Chartered Accountants
Manchester
20 November 2003
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END
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