Adoption of IFRS

GUS PLC
14 June 2005

14 June 2005

                                    GUS plc

Adoption of International Financial Reporting Standards

GUS plc, the retail and business services group, today releases its unaudited
financial results for the year to 31 March 2005 as prepared under International
Financial Reporting Standards.

The move to IFRS will not change how GUS is managed and will have no impact on
cash flow.

The main changes compared to the financial results prepared under UK GAAP are as
below:

   •Benchmark PBT1 of £906m, £4m lower than the UK GAAP equivalent of £910m

   •Reported PBT of £843m, £150m higher than the UK GAAP equivalent of £693m,
    mainly reflecting the elimination of goodwill amortisation

   •Effective tax rate2 of 26.5%, up 2.2% compared to the UK GAAP equivalent
    of 24.3%. Tax payable in cash is unlikely to change materially as a result
    of IFRS

   •Benchmark basic EPS3 of 61.5p, 4% lower than the UK GAAP equivalent of
    63.8p, reflecting the higher tax rate

   •Reported basic EPS of 59.9p, 17.6p higher than the UK GAAP equivalent of
    42.3p

   •Capital employed at 31 March 2005 of £3,384m, compared to the UK GAAP
    equivalent of £3,070m


1 Benchmark PBT is defined as profit before amortisation of acquisition
intangibles, exceptional items (i.e. gains or losses on disposal or closure of
businesses and goodwill impairment charges), financing fair value remeasurements
and taxation. It includes the Group's share of associates' pre-tax profit and
the profits or losses of discontinued operations up to the date of disposal or
closure.

2 Effective tax rate is based on Benchmark PBT.

3 Benchmark basic EPS takes Benchmark PBT less taxation (attributable to
Benchmark PBT) and minority interests, divided by the weighted average number of
shares in issue (excluding own shares held in Treasury and in the ESOP trust).

Enquiries

GUS
David Tyler           Group Finance Director                       020 7495 0070
Fay Dodds             Director of Investor Relations

Finsbury
Rupert Younger                                                     020 7251 3801
Rollo Head

GUS announcements are available on its website, www.gusplc.com. There will be a
conference call to discuss this announcement at 10am today. The slides which
will be referred to during this call and additional information on the formal
IFRS financial statements presentation, accounting policies and the fair value
of share-based payments are also available on the website.

Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from any expected future results in forward-looking statements.

Introduction

For accounting periods commencing on or after 1 January 2005, it is mandatory
for the consolidated financial statements of all European listed companies to be
reported in accordance with International Financial Reporting Standards (IFRS).
For GUS, the first year of full IFRS reporting is the 12 months ending 31 March
2006. The Transition Date is 1 April 2004.

The move to IFRS will not change how GUS is managed and will have no impact on
cash flow. As with most companies, it will, however, lead to increased
volatility in the income statement and balance sheet, with the presentation of
the financial statements also affected.

Against this background, GUS has identified measures of Benchmark PBT and
Benchmark EPS that it believes will assist understanding of the performance of
the business. This approach is comparable with that previously used. Management
will focus on these measures while complying with the reporting requirements of
IFRS. Free cash flow is not affected by the transition to IFRS and remains a key
performance indicator both internally and for shareholders.

This announcement summarises:
    -   the major changes to the income statement resulting from the move
        from UK Generally Accepted Accounting Principles (UK GAAP) to IFRS;
    -   the definition of Benchmark PBT and Benchmark EPS; and
    -   the material transitional adjustments to the balance sheet at 1 April 2004 
        and the restated balance sheet at 31 March 2005.

Additional disclosure is given in the Appendix, including divisional analyses
and restated interim results.

The financial information in this announcement is unaudited. It is also subject
to possible change as the definition and interpretation of IFRS continues to
evolve and be amended by the relevant authorities.

Financial statements for 12 months to 31 March 2005 - under UK GAAP

On 25 May 2005, GUS issued its preliminary results. The financial statements
were prepared under UK GAAP as summarised below:

12 months to 31 March 2005                                    Notes     Profit
                                                                            £m

Argos Retail Group                                                       421.5
Experian                                                                 318.3
Burberry                                                                 165.7
Central activities                                                       (24.1)
                                                                        -------
Continuing operations                                          2-5       881.4

Discontinued operations                                                   55.4
                                                                        -------
                                                      Total              936.8

Net interest                                                   3, 5      (26.4)
Profit before amortisation of goodwill, exceptional items and
taxation                                                                 910.4
Amortisation of goodwill                                         6      (207.3)
Exceptional charge                                               7       (10.0)
                                                                        -------
Profit before taxation                                                   693.1
Taxation                                                         9      (221.2)
Equity minority interests                                                (49.4)
                                                                        -------
Profit for the financial year                                            422.5
Dividends                                                       10      (292.7)
Retained profit                                                          129.8
-------------------------------------------------------------------------------
EPS before amortisation of goodwill and exceptional items                 63.8p
Reported basic EPS                                                        42.3p
-------------------------------------------------------------------------------

The profit figure shown against each business above is operating profit, defined
as profit before interest, taxation, exceptional items and goodwill
amortisation.
This summary table differs from the statutory UK GAAP profit and loss account.

At 31 March 2005                                      Notes                 £m
------------------------------------------------------------------------------
Total equity shareholders' funds                      3-6, 10            2,810
Equity minority interests                                                  260
                                                                     ----------
Capital employed                                                         3,070


Financial statements for 12 months to 31 March 2005 - under IFRS

The results presented in the same format as UK GAAP on the previous page but
measured under IFRS have been restated and summarised as below:

12 months to 31 March 2005                             Notes            Profit
                                                                            £m

Argos Retail Group                                                       418.0
Experian                                                                 317.0
Burberry                                                                 161.3
Central activities                                                       (21.8)
                                                                     ----------

Continuing operations                                   2-5              874.5
Discontinued operations                                                   55.2
                                                                     ----------
Total                                                                    929.7
Net interest                                            3, 5            (23.7)
                                                                     ----------
Benchmark PBT                                           1                906.0
Amortisation of acquisition intangibles                 6                (4.1)
Exceptional charge                                      7                (3.5)
Fair value remeasurements                               8                 -
Profit before taxation                                                   898.4
Taxation                                                9              (250.2)
Equity minority interests                                               (49.4)
                                                                     ----------
Profit for the financial year                                            598.8
Dividends*                                              10             (281.5)
Retained profit*                                                         317.3
------------------------------------------------------------------------------
Benchmark EPS                                           1                61.5p
Reported basic EPS                                                       59.9p

The profit figure shown against each business above is operating profit, defined
as profit before interest, taxation, exceptional items, amortisation of
acquisition intangibles and financing fair value remeasurements.
This summary table differs from the formal IFRS income statement. A
reconciliation between the two is included in Appendix 1.
* IFRS records dividends as movements in equity rather than appropriations of
profit. The term retained profit is used here as a direct comparison to UK GAAP.

At 31 March 2005                                       Notes                £m

Total equity shareholders' funds                      3-6, 10            3,128
Equity minority interests                                                  256
                                                                     ----------
Capital employed                                                         3,384

Reconciliation of the summary tables from UK GAAP to IFRS

Benchmark PBT of £906m is £4m lower than the UK GAAP equivalent of £910m. The
table below provides a summary reconciliation of UK GAAP to IFRS for the year to
31 March 2005:

12 months to 31 March 2005                                     Notes        £m
------------------------------------------------------------------------------
Profit before amortisation of goodwill, exceptional items and
taxation under UK GAAP                                                   910.4
Share-based payments                                            2         (6.6)
Pension costs                                                   3          2.3
Catalogue costs                                                 4         (1.2)
Other adjustments                                               5          1.1
                                                                     ----------
Benchmark PBT under IFRS                                        1        906.0
                                                                     ----------

The equivalent of retained profit under IFRS is significantly higher in 2005.
The table below provides a summary reconciliation of retained profit under UK
GAAP to retained profit under IFRS:

12 months to 31 March 2005                             Notes                £m

Retained profit for the year under UK GAAP                               129.8

Share-based payments, pension costs, catalogue 
costs and other adjustments as above                    2-5              (4.4)
Amortisation of acquisition intangibles                  6               (4.1)
Reversal of goodwill amortisation                        6              207.3
Goodwill impairment                                      6                 -
Net change to exceptional charge                         7                6.5
Fair value remeasurements relating to 
financial instruments                                    8                 -
Deferred taxation                                        9              (29.0)
Dividends                                               10               11.2
                                                                     ----------
Retained profit for the year under IFRS                                  317.3

Capital employed increases at 31 March 2005 by 10% under IFRS. The following
table provides a summary reconciliation between UK GAAP and IFRS for the balance
sheets as at 1 April 2004 and 31 March 2005:

                                    Notes      At 31 March      At 1 April 2004
                                                    2005
                                                       £m                    £m

Capital employed under UK GAAP                     3,070                 2,971
Pension liabilities                    3            (226)                 (227)
Catalogue costs                        4             (15)                  (14)
Lease incentives                       5             (34)                  (34)
Amortisation of acquisition
intangibles                            6              (4)                    -
Reversal of UK GAAP goodwill
amortisation charged after
transition                             6             207                     -
Goodwill impairment on transition      6              (3)                   (3)
Deferred taxation                      9             186                   210
Dividends                             10             202                   191
Other                                  5               1                    (5)
                                            ------------------------------------
Capital employed under IFRS                        3,384                 3,089


Notes to tables

The following notes explain the definition of Benchmark PBT and the main
differences between the summary tables under UK GAAP and IFRS.

Note 1 - Benchmark PBT
GUS has defined Benchmark PBT as profit before:
    -    amortisation of acquisition intangibles;
    -    exceptional items (i.e. gains or losses on disposal or closure of
         businesses and goodwill impairment charges);
    -    fair value remeasurements relating to financial instruments; and
    -    taxation.

Benchmark PBT also includes:
    -    the Group's share of pre-tax profits of associates (IFRS requires
         disclosure of the post-tax result on the formal income statement); and
    -    any operating profits or losses of discontinued operations up to the
         date of disposal or closure (which are shown separately under IFRS).

The additional disclosures below Benchmark PBT are still shown in the summary
table on page five and in the formal income statement as required.

Benchmark basic EPS takes Benchmark PBT less taxation (attributable to Benchmark
PBT) and minority interests, divided by the weighted average number of shares in
issue (excluding own shares held in Treasury and in the ESOP trust).

Note 2 - share-based payments
Expensing additional share-based payments reduces profit before tax and
exceptional items by £6.6m in the year to 31 March 2005. IFRS requires that the
fair value of all share-based payments is charged to the income statement over
the vesting period. GUS has elected to apply the requirements retrospectively to
all payments including those granted before the prescribed date of 7 November
2002 but not vested at the Transition Date to IFRS of 1 April 2004.

There are three principal differences in the accounting methods for share-based
payments under UK GAAP and IFRS. These relate to:

    -    share options (including SAYE). These give rise to a charge under    
         IFRS, whereas they did not under UK GAAP;

    -    the Performance Share Plan (which gives shares to participants at no
         cost depending on the total shareholder return of GUS over a three year period).
         The expense is lower under IFRS than under UK GAAP. Under UK GAAP, it was
         assumed that the awards vest in full. Under IFRS, it is estimated that 60% will
         vest; and

    -    the Co-Investment Plan (which gives participants matching shares
         after three years if they invest their annual cash bonus in GUS shares).
         Although the total charge over time is the same under UK GAAP and IFRS, the
         phasing is different. Under UK GAAP, all the expense of a grant was taken at the
         beginning (i.e. in the year when the bonus on which it is based was earned).
         Under IFRS, the expense is spread over a four year period, starting in the year
         when the bonus on which it is based is earned.

In the year to 31 March 2006, these changes are estimated to lead to an
additional cost of about £20m compared to UK GAAP (i.e. about £13m higher than
the corresponding £6.6m impact in 2005). This largely relates to the phasing of
the Co-Investment Plan charge.


Note 3 - pensions
The change in the way that the cost of pension and other post-retirement
benefits is calculated increases profit before tax and exceptional items by
£2.3m in total in the year to 31 March 2005. Under IFRS, the pension charge
principally comprises a current service cost, charged to operating profit, and a
financing item, reported within net interest. Under IAS 19, the current service
cost of future pension benefits is calculated using a lower real discount rate
than under SSAP 24, which increases the cost. However, this effect is offset at
GUS by other changes, principally related to the manner in which scheme deficits
were dealt with under SSAP 24. The net effect of these changes is to increase
operating profit by £0.2m. Net interest is reduced by £2.1m, reflecting the
excess of the expected return on pension assets over the interest on pension
liabilities.

In the year to 31 March 2006, the current service cost is expected to increase
by around £7m mainly because of reductions in discount rates and increased
longevity. However, this will be offset by a decrease of about £7m in net
interest, due mainly to the effect of the £76m special pension contributions
made in March 2005.

Under IAS 19, GUS has adopted the option that requires the full actuarial value
of the surplus or deficit of pension schemes and other post-retirement benefits
to be shown on the balance sheet. The net liability, after deferred tax, in
respect of pensions and other post-retirement benefits at 31 March 2005 was
£78m. It is expected that the value of the surplus or deficit will fluctuate
from one year to another, reflecting among other things changes in interest
rates and the value of relevant stock markets.

Any movements in the pension assets and liabilities arising from actuarial gains
and losses (such as changes in the discount rate, longevity assumptions or stock
market fluctuations) are recognised immediately in full under IFRS through the
Statement of Recognised Income and Expense (SORIE). As such, they do not impact
either Benchmark PBT or reported PBT.

Note 4 - catalogue costs
Catalogue costs are expensed as incurred under IFRS, reducing profit before tax
by £1.2m, whereas under UK GAAP, catalogue costs were expensed over the period
in which the catalogues generated revenue. Although the year-on-year effect of
this adjustment is small, it has a significant impact between the first and
second halves in 2005. In the six months to 30 September 2004, catalogue costs
were £8.1m lower under IFRS. In the six months to 31 March 2005, catalogue costs
were £9.3m higher under IFRS.

In the year to 31 March 2006, catalogue costs under IFRS compared to UK GAAP are
expected to have a similar net impact, reducing profit before tax by about £1m.
However, the phasing is expected to differ significantly with catalogue costs
about £2m lower in the six months to 30 September 2005 and about £3m higher in
the second half of the year. In other words, compared to the previous year, this
results in an adverse £6m movement in the six months to September 2005, offset
by a favourable £6m movement in the six months to 31 March 2006.

Note 5 - other adjustments

Other adjustments comprise several other items that are not individually
significant. They include property lease incentives, which are recognised over
the full term of the lease under IFRS, reducing profit before tax by £0.4m.
Under UK GAAP, these were recognised from the start of the lease to the first
rent review.

The divisional split of the adjustments in notes 2 to 5 is given in Appendix 2.

Note 6 - goodwill amortisation
Under IFRS, the amortisation of capitalised goodwill on acquisitions is no
longer allowed. Goodwill amortisation charged under UK GAAP after Transition
Date is reversed in the IFRS income statement and balance sheet. Goodwill will
be subject to an annual impairment review, with any charge reported under
exceptional items in the summary table.

IFRS also requires that, on acquisition, specific intangible assets are
identified and recognised and then amortised over their useful economic lives.
These include items such as brand names and customer lists, to which value is
first attributed at the time of acquisition. In the year to 31 March 2005, this
amortisation amounted to £4.1m, which relates to Experian acquisitions
undertaken during the year. Earlier acquisitions have not been restated.

As it did with goodwill amortisation, GUS will exclude amortisation of
acquisition intangibles from its definition of Benchmark PBT. This is because
the amortisation of acquisition intangibles is based on uncertain judgments
about the value and economic life of such items and treated differently to
similar assets created by expenditures within a business already owned by GUS.
The amortisation of intangibles that have always been capitalised, principally
databases and software, will continue to be charged in arriving at Benchmark
PBT.

Note 7 - exceptional items
IFRS permits the use of exceptional items, although the treatment and
measurement of certain items differs to that under UK GAAP. GUS will continue to
treat as exceptional items only those costs associated with the disposal or
closure of businesses and goodwill impairment charges. All other restructuring
costs are charged against operating profit in the businesses in which they are
incurred. In the year to 31 March 2005, exceptional costs were £10.0m under UK
GAAP and £3.5m under IFRS, with the difference reflecting a £3.7m credit
relating to the impact on pension liabilities of the disposal of home shopping
and Reality and other minor remeasurements.

Note 8 - financial instruments
GUS has taken advantage of the option under IFRS 1 to defer the implementation
of IAS 32 (Financial Instruments: Disclosure and Presentation) and IAS 39
(Financial Instruments: Recognition and Measurement) to the financial year ended
31 March 2006. As a result, there will be no impact in the year to 31 March
2005. These standards will first be applied for the six months to 30 September
2005.

The most significant financial instruments for GUS are its forward sales of
foreign currencies to hedge the value of investments in group businesses outside
the UK. The treatment of these will be effectively the same under IFRS as under
UK GAAP, with the fair value being recognised in the balance sheet and
mark-to-market re-measurements being taken through the SORIE rather than the
income statement.

Many, but not all, of the Group's other derivatives will qualify for hedge
accounting under IFRS. These gains or losses will also be taken through the
SORIE, not the income statement.

Some of the Group's derivatives will not qualify for hedge accounting. Gains or
losses on these arising from market movements will be charged or credited to the
income statement. As noted above, these financing fair value re-measurements are
excluded from Benchmark PBT and EPS.

Note 9 - taxation
The effective tax rate under IFRS increased by 2.2% compared to the UK GAAP
equivalent, largely because of the treatment of deferred tax. Under UK GAAP, the
effective tax rate, based on profit before amortisation of goodwill and before
profits and losses on sale of businesses, was 24.3%. Under IFRS, the equivalent
effective tax rate is 26.5%. The increase is due to the treatment of tax relief
on goodwill written off to reserves (on pre-1998 US acquisitions). Under UK
GAAP, this relief was credited each year against the tax charge in the income
statement. Under IFRS, a deferred tax asset is set up for this future relief at
the time of the acquisition; as the tax relief is received, it is credited
against this deferred tax asset.

It is important to note that tax payable in cash is unlikely to change
materially as a result of IFRS.

For the year to 31 March 2006, as previously noted, GUS expects its effective
tax rate to increase further by about 2%, mainly affected by GUS' current
understanding of recent proposed changes in UK tax legislation.

Note 10 - dividends

IFRS does not allow a dividend that is proposed but not yet authorised to be
accrued in the financial statements. This means that, under IFRS, accounting for
dividends is effectively on a cash paid basis, resulting in a small difference
in the full year charge on the income statement. On the balance sheet, there is
therefore no longer a dividend accrual.

Appendix

1. Reconciliation of IFRS Benchmark PBT to formal income statement

12 months to 31 March 2005                                                  £m
-------------------------------------------------------------------------------
Benchmark PBT                                                            906.0
Amortisation of acquisition intangibles                                   (4.1)
Exceptional items                                                         (3.5)
Exclude operating profit of discontinued operations                      (55.2)
Exclude interest expense of discontinued operations                        1.2
Exclude exceptional items of discontinued operations                      (0.2)
Include tax expense on share of profits of associates                     (1.1)
                                                                       ---------
IFRS profit before taxation                                              843.1
Tax expense                                                             (233.0)
                                                                       ---------
Profit after taxation                                                    610.1
Discontinued operations (after interest, tax and exceptional items)       38.1
                                                                       ---------
Profit for the financial year                                            648.2

Profit attributable to:
Equity shareholders of the parent company                                598.8
Minority interests                                                        49.4
                                                                       ---------
Profit for the financial year                                            648.2
--------------------------------------------------------------------------------

2. Adjustments to Benchmark PBT by business

12 months to 31     UK GAAP     Share-based     Pensions      Other        IFRS
March 2005                       payments                  adjustments1
£m                                               

Argos                309.6         (2.3)           -         (2.3)        305.0
Homebase              91.8         (1.3)           -         (0.2)         90.3
ARG FS                 0.2          -              -          -             0.2
Wehkamp               19.9          -            1.8          0.8          22.5
                    ------------------------------------------------------------
Total ARG             421.5        (3.6)         1.8         (1.7)        418.0
Experian              
North America         188.2         0.6          -            0.1         188.9
International         130.1        (0.6)        (1.9)         0.5         128.1
                    ------------------------------------------------------------
Total Experian        318.3         -           (1.9)         0.6         317.0
Burberry              165.7        (4.3)        (0.2)         0.1         161.3
Central               (24.1)        2.1          0.5         (0.3)       (21.8)
activities
                    ------------------------------------------------------------
Continuing
operations            881.4        (5.8)         0.2         (1.3)        874.5

Discontinued
operations             55.4        (0.8)          -           0.6          55.2
                    ------------------------------------------------------------
Total                 936.8        (6.6)         0.2         (0.7)        929.7
Net interest          (26.4)        -            2.1          0.6         (23.7)

Benchmark PBT     910.4            (6.6)         2.3         (0.1)        906.0
--------------------------------------------------------------------------------

1 These include catalogue costs, lease incentives and other adjustments that are
not individually significant.

3. Restated interim results

Reconciliation of IFRS interim Benchmark PBT to interim formal income statement

Six months to 30 September 2004                                             £m
--------------------------------------------------------------------------------
Benchmark PBT                                                            406.9
Amortisation of acquisition intangibles                                   (0.1)
Exceptional items                                                         21.1
Exclude operating profit of discontinued operations                      (24.8)
Exclude interest income of discontinued operations                        (0.2)
Exclude exceptional items of discontinued operations                     (25.5)
Include tax expense on share of profits of associates                     (0.8)
                                                                       ---------
IFRS profit before taxation                                              376.6
Tax expense                                                             (104.9)
                                                                       ---------
Profit after taxation                                                    271.7
Discontinued operations (after interest, tax and exceptional items)       43.8
                                                                       ---------
Profit for the period                                                    315.5
                                                                       ---------
Profit attributable to:
Equity shareholders of the parent company                                296.9
Minority interests                                                        18.6
                                                                       ---------
Profit for the period                                                    315.5



4. Adjustments to Benchmark PBT by business for H1 2004/5

Six months to       UK GAAP       Share-based      Pensions      Other        IFRS
30 Sept 2004                      payments                    adjustments1
£m                                               

Argos                 85.7          (1.0)              -          7.0         91.7
Homebase              76.3          (0.7)              -         (0.2)        75.4
ARG FS                 0.4            -                -          -            0.4
Wehkamp               10.3            -               0.9         1.2         12.4
                    ----------------------------------------------------------------
Total ARG            172.7          (1.7)             0.9         8.0        179.9
Experian           
North America         90.7          (1.4)              -           -          89.3
International         62.0          (1.9)            (1.0)        0.4         59.5
                   ----------------------------------------------------------------
Total Experian       152.7          (3.3)            (1.0)        0.4        148.8
Burberry              78.8          (1.3)            (0.1)        0.2         77.6
Central              (10.8)         (2.7)             0.3        (0.3)       (13.5)
activities
                   ----------------------------------------------------------------
Continuing
operations           393.4          (9.0)             0.1         8.3        392.8
Discontinued
operations            24.8            -                -           -          24.8
                    ---------------------------------------------------------------
Total                418.2          (9.0)             0.1         8.3        417.6
Net interest         (12.4)           -               1.0         0.7        (10.7)

Benchmark PBT        405.8          (9.0)             1.1         9.0        406.9

Amortisation of
acquisition
intangibles                                                                   (0.1)
Exceptional charge                                                            21.1
Fair value remeasurements                                                       -
                                                                            --------
Profit before
taxation                                                                      427.9
Taxation                                                                     (112.4)
Equity minority
interests                                                                     (18.6)
                                                                            --------
Profit for the
period                                                                        296.9
Dividends2                                                                   (191.0)
                                                                            --------
Retained profit2                                                              105.9

Benchmark EPS                                                                  28.0p
Reported basic EPS                                                             29.7p
1 These include catalogue costs, lease incentives and other adjustments that are
not individually significant.
2 IFRS records dividends as movements in equity rather than appropriations of
profit. The term retained profit is used here as a direct comparison to UK GAAP.


5. Timetable

20 June 2005         2005 Annual Report published, giving summary IFRS reconciliation

20 July 2005         AGM and Q1 Trading Update, published under IFRS (as all subsequent
                     Trading Updates will be)

17 November 2005     2005/6 interim results, published under IFRS

24 May 2006          2006 Preliminary results, published under IFRS

6. Additional information

The following additional information is available on the GUS website,
www.gusplc.com.

    -   Summary slide presentation, which will be referred to during the
        conference call at 10am today
    -   Formal IFRS financial statements presentation
    -   Accounting policies
    -   Fair value of share-based payments


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