Interim Results - Part 1

Great Universal Stores PLC 30 November 2000 Part 1 INTERIM RESULTS FOR SIX MONTHS ENDED 30 SEPTEMBER 2000 The Great Universal Stores P.L.C. (GUS) today announces its interim results for the six months ended 30 September 2000. Highlights - Profit before amortisation of goodwill, exceptional items and taxation: £181m (1999: £176m) - Earnings per share before amortisation of goodwill and exceptional items: 13.7p (1999: 13.6p) - Unchanged dividend of 6.2p - Experian: further profit growth; strengthened management team - Reality: good progress in winning contracts and reducing costs - Argos: operating profits up 13%, after significant revenue investment - Home Shopping: rightsizing on plan - Burberry: operating profits up from £4m to £27m; intention to arrange partial IPO within next 18 months Sir Victor Blank, Chairman of GUS, commented: 'The first half has seen real progress in the reshaping and strengthening of the Group. Today's announcement that we are planning a partial flotation of Burberry within the next eighteen months marks further progress in focusing the Group on our three key inter-related businesses. We are building a very high quality management team throughout the Group and confidently expect them to drive through improving returns from our businesses.' John Peace, Chief Executive of GUS, commented: 'Although we face challenging and competitive conditions in many of our markets, the actions we are taking to reposition the Group, to create new business opportunities and to drive operational efficiency underpin our confidence in the future.' Enquiries GUS John Peace Chief Executive 020 7495 0070 David Tyler Finance Director Fay Dodds Investor Relations Finsbury Rupert Younger 020 7251 3801 Rollo Head There will be a presentation today to analysts and institutions at 9.30am, and a press conference at 11.45am, at the Ground Floor Conference Centre, UBS Warburg, 1 Finsbury Avenue, EC2M 2PP. The announcement is available on the GUS web site: www.gusplc.co.uk. The slide pack and presentation to analysts and institutions will also be available here later in the day. As announced in its First Half Trading Update on 12 October 2000, GUS will comment on current trading in its Third Quarter Trading Update on 11 January 2001. GROUP RESULTS 6 months to 30 September Sales £m Profit before taxation £m 2000 1999 2000 1999 Experian 487 470 105.7 97.2 Reality 219 212 1.6 1.3 Argos Retail Group - Argos 944 806 35.7 31.7 - Home Shopping UK and Ireland 702 735 8.3 9.8 - Financial Services - - 2.7 6.8 - Home Shopping Continental Europe 150 170 10.4 12.5 Total ARG 1,796 1,711 57.1 60.8 Burberry 185 94 26.6 4.3 South African Retailing 63 80 10.0 17.5 Finance Division 84 109 9.3 12.0 Property - - 14.6 16.0 gusco.com - - (5.5) - Central costs - - (4.1) (3.5) Inter-divisional turnover (184) (181) - - Total 2,651 2,496 215.3 205.6 Net interest (34.6) (29.5) Profit before amortisation of goodwill, exceptional items and taxation 180.7 176.1 Exceptional items (26.1) - Amortisation of goodwill (42.4) (39.5) Profit before taxation 112.2 136.6 In the six months to 30 September 2000, Group profit before amortisation of goodwill, exceptional items and taxation was £180.7m, compared to £176.1m last year. This year's result was before an exceptional charge of £26.1m (1999: nil). This charge covered restructuring costs in Argos Retail Group (£8.9m), closure costs in General Guarantee Finance (£13.1m) and a net loss relating to the goodwill write-back following the disposal of Highway Vehicle Management (£13.3m). The charge was partly offset by a profit on the sale of e-commerce investments of £4.6m and a VAT refund received by UK Home Shopping of £4.6m. The Group's effective tax rate (based on profit before amortisation of goodwill) was 24.0%. Earnings per share before amortisation of goodwill and exceptional items was 13.7p (13.6p last year). The Board has declared an interim dividend of 6.2p (1999: 6.2p). CHIEF EXECUTIVE'S REVIEW GUS is focused on three key, inter-related activities: Experian (information services); Reality (outsourcing business offering web design, customer care and logistics); and Argos Retail Group (multi-channel retailing, combining Argos with our Home Shopping and Financial Services activities). We continue to invest in our other businesses to achieve maximum value for shareholders. The first six months of the current financial year have seen considerable progress at GUS in repositioning the business for growth. We have: - formed Argos Retail Group (ARG); - acquired jungle.com; - created Reality; - acquired Burberry Spain; - sold Highway Vehicle Management and started the wind-down of General Guarantee Finance as well as our property joint venture; - strengthened management at many levels. Craig Smith has been appointed CEO for Experian North America and John Saunders CEO of a combined Experian UK and Rest of World. Trevor Hilliard is joining us to head up ARG Financial Services; - launched many new products across the Group, including e-series at Experian and the store and credit cards at ARG; - invested, through gusco.com, in a number of new e-commerce developments, including MyPoints Europe; and - started to realise cost savings from the restructuring of UK Home Shopping. Profit growth in the first half was 3%, despite £11.6m of start-up costs in ARG Financial Services (£3.5m), Argos Additions (£2.6m) and e-commerce ventures (£5.5m), in addition to ongoing revenue investment elsewhere across the Group. Profits were ahead at Experian, Reality and Argos. While UK Home Shopping saw a continued planned reduction in sales, the profit decline was held to £1.5m. Burberry increased its profits significantly in the first half. The performance begins to reflect the investment that GUS has made in the repositioning of the Burberry brand. Profit also benefited from the acquisition of Burberry Spain, its former licensee, and the renewal of its Japanese license. We have confidence in the vision of Burberry as an international luxury brand and will continue to invest in the business. We believe that it will soon be the right time to secure the inherent value in the brand, taking into account both the best interests of GUS shareholders and Burberry's own further development. As a result, we intend, subject to market conditions, to arrange a partial IPO for Burberry within the next eighteen months. This would mark a major point in the development of Burberry and provide transparency for its increasing value within GUS. No further announcement on this subject should be expected before our Preliminary Results in June 2001. EXPERIAN Experian International continues to grow strongly. Underlying profits in Experian North America were unchanged from the previous year, an improving trend. 6 months to 30 September 2000 1999 underlying change* Sales £m .. 487 470 4% Operating profit £m 105.7 97.2 5% Operating margin 21.7% 20.7% ..Includes £5m of sales from Experian UK to Group customers not previously included in turnover, (£4m in H1 last year, £9m in full year 1999/2000) *at constant exchange rates excluding acquisitions and divestments At constant exchange rates and excluding acquisitions and divestments, sales for Experian as a whole grew by 4% and operating profit by 5%. Underlying sales and profits in North America were unchanged from the previous year, an improvement on the second half of last year. Experian UK had another excellent half year, with underlying sales growing by 11% and profits by 13%. In Experian Rest of World, underlying sales and profit growth was also strong. Exchange rate movements benefited sales by £13.1m and profit by £3.7m. Experian North America 6 months to 30 September 2000 1999 underlying change* Sales £m 317 310 0% Operating profit Managed businesses £m 72.2 68.2 0% FARES/other associates £m 3.0 3.4 (18)% Total £m 75.2 71.6 (1)% Operating margin (excluding FARES) 22.8% 22.0% * at constant exchange rates, excluding divestments Experian North America had a challenging first half. Marketing Services, which accounts for about 40% of sales, continued a steady recovery from the integration issues of last year, with 4% sales growth. Sales in Information Services, however, fell by 4%. Consumer credit profiles, which contribute about one quarter of North American sales, saw volume growth of 6%, which was offset by price deflation of 6%. Sales in prescreen and credit marketing, which are about 10% of North American turnover, declined as the result of increased price competition and our competitors' less restrictive position on data contribution and usage. This is being addressed through changes in pricing and data usage policies, in conjunction with an enhanced prescreen product. At constant exchange rates and excluding two former Metromail businesses (NDA and CIC, which were put into joint ventures during the second half of 1999/2000), underlying sales were in line with last year, despite the rationalisation of non-strategic product lines which cut out 3% of its sales. In dollar terms, operating profit from managed businesses was unchanged from the prior year. Profit improvement from FARES, the real estate joint venture, was offset by losses from Experian's investment in NuEdge, which incorporates the database software activities of CIC. Following the appointment of Craig Smith as Chief Executive from 1 July 2000, Experian North America's management team is now focused on: - enhancing relationships with major customers; - further strengthening the management team; - launching the integrated solutions business unit to focus on large scale customer databases. This business integrates many different databases to give our clients a complete view of their individual customers; - introducing new products, such as the National Fraud Database, e-Funds debit data and Automotive Information Services; and - accelerating the pace of implementing strategic alliances to facilitate sales growth. Experian International 6 months to 30 September 2000 1999 underlying change* Sales £m UK 100 90 11% ROW 70 70 15% Total 170 160 13% Operating profit £m UK 25.1 22.2 13% ROW 5.4 3.4 79% Total 30.5 25.6 22% Operating margin 17.9% 16.0% *at constant exchange rates, excluding divestments Experian UK continues to trade strongly in each of its main businesses, as a result of new product offerings and significant new customer wins. In the first half, sales were 11% ahead of the same period in 1999, with profits up 13%. Value added products were particularly strong, especially Detect, the application fraud detection product, and Intravue, the customer and prospect database management tool. Experian UK has won some significant new contracts in the first half, which, over the life of the contracts, will generate sales in excess of £100m. These include: - First National Retail Finance: account and application processing services; - Time Retail Finance: account and application processing services; and - Euler Trade Indemnity: business information services. The e-series internet product suite has secured a strong client pipeline since its launch in August. For example, Dixons Group plc is using e-identity to detect and prevent fraud in 'card not present' transactions, the normal way of making purchases on the internet or by phone. Several elements of e-series property are already available through leading web sites such as Scoot, fish4homes and Move.co.uk. At constant exchange rates and excluding divestments, underlying sales growth in the Rest of World was 15%. This excludes the French facilities management business, which was sold in July 2000 and generated sales of £10m in the first half of last year (£20m in the full year). Profits increased substantially, as a result of strong sales growth in the outsourcing and decision support product areas, particularly in France, Italy, Asia Pacific and Experian Scorex. Experian UK and Rest of World are working closely together, as a growing number of products and clients become pan-European. As a result, they are now being managed as one business, under the leadership of John Saunders. REALITY Since its launch in May 2000, Reality has made good progress in its two key objectives of winning new external contracts and reducing its cost base. 6 months to 30 September 2000 1999 change Sales to external customers £m 40 35 14% Sales to ARG £m 179 177 1% Total sales £m 219 212 3% Operating profit £m 1.6 1.3 23% Operating margin * 4.0% 3.7% * operating profit as % of sales to external customers Reality was formed in May 2000, bringing together Group assets, people and skills to create a powerful outsourcing operation in web design, customer care and logistics. The acquisition of Reality Group Limited for £35m brought e-commerce consultancy and web design skills to add to the Group's call centres, lettershops, warehouses and delivery infrastructure. With its own dedicated management team, GUS is confident that Reality will benefit from the growing outsourcing and remote shopping markets. Reality's task is two-fold: to develop sales from external clients; and to reduce its cost base, increasing efficiency for both its internal and external customers. Winning new contracts Between its formation in May and the end of September, Reality won contracts with 17 third party customers, with an annualised value of over £20m and total contract value of £119m. These cover all of Reality's activities and include Time Life, Vauxhall and Barclaycard. It is currently engaged in discussions with a significant number of further prospective clients. Reducing costs and increasing efficiencies The Argos Retail Group (ARG) is Reality's largest customer by far, accounting for over 80% of sales for the period under review. Reality has charged ARG at cost in the first half. Sales to ARG were broadly unchanged in the first half. Declining parcel delivery and call centre volumes from UK Home Shopping were offset by growing activity for both Argos Additions and Argos Direct. Fixed cost inflation was broadly matched by cost savings of £5m. Service levels for parcel delivery have further improved. Looking forward, new services in both delivery and e-commerce are planned, drawing on Reality's extensive infrastructure. A new, arms-length outsourcing agreement between Reality and ARG takes effect from 1 April 2001. This will allow both ARG and Reality to benefit from volume growth and cost savings made by Reality in the future. ARGOS RETAIL GROUP Good progress is being made in continuing the growth momentum in Argos and starting to rightsize UK Home Shopping. 6 months to 30 September Sales Operating profit 2000 1999 2000 1999 Argos £m 944 806 35.7 31.7 Home Shopping UK & Ireland £m 702 735 8.3 9.8 Financial Services £m - - 2.7 6.8 Home Shopping Continental Europe £m 150 170 10.4 12.5 Total £m 1,796 1,711 57.1 60.8 Operating margin 3.2% 3.6% The Argos Retail Group (ARG) was formed in June, combining Argos with our Home Shopping operations in the UK and Continental Europe, thereby establishing a major multi-channel retailing organisation. Its key priorities are to build on the strong momentum achieved at Argos, to stabilise UK Home Shopping profits by reducing costs and concentrating on profitable customers, and to build market share in direct home shopping and financial services. Good progress has been made in the first half: - aided by the single catalogue, Argos continued to grow sales in its major categories, with like-for-like sales up by 11%; - reduced recruitment spend contributed to a 5% decrease in sales in UK Home Shopping. However, actions to reduce costs limited the impact on profits to £1.5m; - we are on target to achieve planned cost savings. For example, the integration of the Argos and UK Home Shopping back office and hard goods buying function is well under way; - the Argos Additions catalogue is now in about half of our Argos stores, with full rollout brought forward to January 2001; - jungle.com was acquired on 7 September 2000 for £37m. It has generated £6m of sales since acquisition and reported a small loss; and - many new initiatives were introduced, including an Argos store card, a UK Home Shopping VISA credit card and the new Argos website. We expect the retail market to remain competitive, although, following the recent strength of the US dollar against sterling, deflationary pressures should ease. The initiatives set out above should underpin the strength of the Argos Retail Group. E-commerce developments Excluding jungle.com, e-commerce sales in ARG (defined as those over the internet and interactive TV) in the first half totalled £20m, an increase of five times over the same period last year. Argos launched its new website in late September, offering all 8,000 products over the web with improved functionality and the ability to reserve in store via the web site (Click and Collect). Sales have increased substantially since launch and conversion rates have more than doubled. Wehkamp is currently generating 5% of its merchandise sales over the internet. Argos 6 months to 30 September 2000 1999 change Sales £m * 944 806 17% Operating profit £m * 35.7 31.7 13% Operating margin 3.8% 3.9% * includes 100% of Argos Additions and jungle.com Argos continues to grow sales in its major categories, through a combination of wider choice, better value and greater convenience. It now has 465 stores and is significantly expanding its sales over the internet and digital TV. Argos Direct, the delivery to home operation, grew again and accounted for 14% of sales in the period. Sales in the first six months of the year, excluding Argos Additions and jungle.com, were ahead by 14%, of which new space contributed 3% and like-for-like growth 11%. The main driver of this growth was again the single catalogue, which enabled customers in our 350 smaller stores to access nearly 30% more product lines. We estimate that over half of the like-for-like growth in the first half came from the single catalogue, which was first launched in August 1999. Sales also benefited from strong demand in furniture, electricals and mobile phones, as well as growth in all products delivered to home. Gross margins were above those of last year, despite the continuing competitive environment, supported by improved purchasing and a more favourable product mix. Profits in the first half were up 13% despite heavy investment ahead of the key Christmas trading season and start-up costs of £2.6m for Argos Additions. Increased costs have been incurred in upgrading the IT systems, in e-commerce and in initiating a major supply chain project. We anticipate continued investment in these areas. In the first half, sales of Argos Additions, which are now included within Argos, were £15m. Customer recruitment and spend is broadly in line with expectations. We remain confident about the long term future of Argos Additions, which builds on the customer base of Argos and on the merchandising skills of Home Shopping. Looking forward, we expect to maintain momentum at Argos through: - a major review of our supply chain, including further increasing direct importing; - further development of e-commerce; - new and refurbished stores; - new product ranges, such as PC peripherals, building on jungle.com's expertise; and - a better credit offer to stimulate further merchandise sales. Home Shopping UK and Ireland 6 months to 30 September 2000 1999 change Sales £m 702 735 (5)% Operating profit £m* 8.3 9.8 (15)% Operating margin 1.2% 1.3% * operating profit before exceptional costs The agency home shopping market continues to be difficult, but the actions that we are taking have started to limit the damage to our profitability. Sales in the first six months of the year were down 5%, continuing the trend of last year and reflecting a cut of one-third in our recruitment spend. Fashion sales were down 11% but hard goods were slightly ahead. The planned reduction in non-profitable customers has led to an 11% fall from a year ago in the active agency customer base to 3.3m. However, this is partly offset by average spend per customer being 7% higher. The gross margin was flat, with lower markdowns and better buying compensating for the adverse mix effect of lower clothing sales and higher sales of value lines. Cost savings of £16m have been achieved in the first half, with £5m of logistics savings from Reality, a reduction in customer recruitment spend and savings from redundancies. This is in line with our previously announced plans to reduce annual fixed costs by about £30m in the current year and £80m in total over three years. Financial Services 6 months to 30 September 2000 1999 change Operating profit £m 2.7 6.8 n/a Financial Services now comprises the insurance and banking businesses, which were previously part of the Finance Division, together with the provision of a range of financial services, including insurance, warranties and personal loans to Argos Retail Group customers. Profits in the first half were affected by £3.5m of pre-launch costs for the Home Shopping VISA credit card and the Argos store card. Trevor Hilliard, from Alliance & Leicester, is joining us as Managing Director of this business. In conjunction with Providian, the fifth largest credit card issuer in the US, the testing of the Home Shopping VISA credit card began in late September. The Argos store card was launched in October in 84 stores. It is fully supported by GUS companies: Experian for its systems and Reality for its back office account management. National roll-out is planned for January 2001. Credit-based products represent a major opportunity for ARG. Development costs will amount to about £10m this year and will peak next year at up to £25m. However, additional merchandise sales will partly offset this investment spend. Home Shopping Continental Europe 6 months to 30 September 2000 1999 underlying change* Sales £m 150 170 0% Operating profit £m 10.4 12.5 (9)% Operating margin 6.9% 7.3% * at constant exchange rates, excluding divestments At constant exchange rates and excluding the divested Dutch retail furniture business, sales were flat and profits fell by 9%. The weakness of the euro reduced reported sales by £11m and profits by £0.7m in the first half. In Austria, the competitive pressures in the market led to a further decline in profits. Profits of the other three European businesses were in line with last year in their domestic currencies. BURBERRY Burberry has had an excellent first half. Recent investment, as well as many new initiatives, are designed to maintain the momentum here. 6 months to 30 September 2000 1999 underlying change* Sales £m 185 94 38% Operating profit £m 26.6 4.3 n/a Operating margin 14.3% 4.6% * excluding the acquisition of Burberry Spain and at constant exchange rates The first six months of this year have seen further significant progress for Burberry. The repositioning of the brand, more contemporary and fashionable merchandise as well as extensions to the product range, and high profile media coverage have all contributed to strong demand for Burberry. The brand's momentum reflects the investment of recent years across all aspects of the business and the greater control exercised by Burberry over its distribution channels. Highlights include: - the renewed Japanese license agreement, which took effect during the first half. This should add at least £10m to operating profit in the current financial year; - the acquisition of Burberry's licensee in Spain on 30 June 2000. The acquisition, which cost £137m plus an earnout of up to £26m, is earnings enhancing with immediate effect and brings with it a strong management team; - the New Bond Street flagship store, the first comprehensive showcase for the repositioned brand. This has traded above expectations since its opening in August; - the purchase of the property adjacent to Burberry's existing store in New York. The combination of the two sites will allow us to create a greatly enhanced US flagship for the brand with more than twice the existing selling area; opening is scheduled for late 2002; and - customer service was improved in our Wholesale business as upgraded processes and systems became effective. Sales at Burberry, excluding Spain, rose by 38% at constant exchange rates in the first half; both wholesale and retail showed growth in excess of 30%. Operating profit on the same basis increased greatly. Burberry continues to invest significantly in its skill base, marketing and systems. Burberry Spain has contributed sales of £53m and profits of £8.2m since acquisition. It should be noted that the great proportion of its wholesale orders for Autumn/Winter are delivered in the three months to September, a normal seasonal trading pattern. For the six months to September, sales and profits increased by 8% and 5% respectively over the same period last year. Burberry continues to maintain the momentum of its business. Its ranges are being developed further, for example by widening its offer in accessories. It plans to open new retail stores in key cities, when suitable sites become available. It will also continue to exert greater control over its brand and design consistency around the world. Wholesale orders for Spring 2001 indicate continued strong demand. SOUTH AFRICAN RETAILING 6 months to 30 September 2000 1999 underlying change* Sales £m 63 80 (16)% Operating profit £m 10.0 17.5 (39)% Operating margin 15.9% 21.9% * at constant exchange rates South African Retailing is operating in a difficult trading environment. Sales have been impacted by the introduction of the state lottery in March 2000, the diversion of spend towards mobile phones and low consumer confidence. In addition, competitors have been offering no-deposit schemes on a wide scale. As a result, turnover in the first half was down 16% in rand, with operating profit falling to R105m. Further weakening of the rand against sterling reduced operating profit by £0.6m in the first half. We have initiated the following changes: - stronger promotional activity, including the extension of our no-deposit offer to a wider range of customers. Experian has been involved in improving our credit scorecard to minimise the risk of bad debts; - widening the scope of the insurance and customer club offer; - continuing to expand the Best Electric chain, which now has 30 stores;and - trialling a catalogue home shopping concept in 88 stores, offering a range of linen, cookware and tableware, with credit available. Sales have been above those of last year since 30 September. FINANCE 6 months to 30 September 2000 1999 change Operating profit £m* 9.3 12.0 (22)% * before exceptional costs of £13.1m in 2000, and net of funding costs In August 2000, we announced the disposal of our vehicle contract hire business, Highway Vehicle Management, to First National Group for approximately £170m in cash. This business contributed £0.4m to profits in the first half of this year (£1.7m last year). At the same time, we decided that, in the absence of any offers that adequately reflected the true value of the business, we would wind down General Guarantee Finance (GGF). This business provided asset finance for the purchase of vehicles to consumers and small to medium sized businesses, a market suffering from overcapacity and falling second-hand car prices. Operating profit at GGF in the first half, before restructuring costs, was £8.9m, compared to £10.3m for the same period last year. This level of operating profit will decline over time as the outstanding advances are collected in, and no new business is written. On 31 August 2000, 436 employees out of a total of 610 were made redundant and 41 of the 45 offices closed. Restructuring costs of £13.1m were charged in the first half, largely associated with redundancy and other costs of closure. At 30 September 2000, GGF's outstanding advances, net of provisions, were £1,059m, of which £857m were funded by securitised debt. We anticipate collecting in practically all of GGF's outstanding advances by March 2003. PROPERTY 6 months to 30 September 2000 1999 change Operating profit £m 14.6 16.0 (9)% In June 2000, we announced that our property joint venture with The British Land Company PLC would continue to dispose of properties and that the funds realised would be used to repay debt and to return cash to the two shareholders, rather than for reinvestment in new properties. During the first half, the joint venture disposed of 29 properties for £45m. GUS' 50% share of operating profit fell by £1.4m to £14.6m, although the Group's interest charge was reduced by a similar amount. The joint venture's portfolio of 276 properties was valued at £1,012m at 30 September 2000. gusco.com 6 months to 30 September 2000 1999 change Operating loss £m (5.5) - n/a In May 2000, GUS announced the launch of gusco.com to fund and oversee the development of GUS' e-commerce investments. The investment spend in the first half was £5.5m, being the launch of MyPoints Europe and the cost of developing two American ventures: one in credit management and the other in on-line services for catalogue companies. A profit of £4.6m (nil in 1999) was earned from the sale of listed e-commerce investments. This is not included in the spend of £5.5m above, but is shown separately as profit on sale of fixed asset investments. The current market value of the remaining listed shares is £10m. CASHFLOW The Group generated an operating cashflow in the first half of £121m compared to £26m in the same period last year. After the payment of dividends, the repayment of securitised loans, acquisitions and disposals and foreign exchange movements, there was a net cash outflow of £123m in the first half. THE GREAT UNIVERSAL STORES P.L.C. GROUP PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Six Six Six Six Year months months months months to to to to to 30.9.00 30.9.00 30.9.00 30.9.00 31.3.00 Before Exceptional Total Exceptional Items Items (Note 2) £m £m £m £m £m Turnover - continuing 2,650.7 - 2,650.7 2,495.6 5,658.4 operations Cost of sales (1,565.9) 1.3 (1,564,6)(1,489.0) (3,436.1) Gross profit 1,084.8 1.3 1,086.1 1,006.6 2,222.3 Net operating expenses (921.6) (22.0) (943.6) (842.4) (1,801.6) Operating profit - 163.2 (20.7) 142.5 164.2 420.7 continuing operations Share of operating profit or BL Universal PLC (joint 14.6 - 14.6 16.0 33.9 venture) Share of operating profit or associated undertakings 3.9 - 3.9 6.4 11.3 Profit on sale of fixed asset - 4.6 4.6 - 11.1 investments Trading profit 181.7 (16.1) 165.6 186.6 477.0 Loss on sale of Highway Vehicle Management Limited - (13.3) (13.3) - - Profit on ordinary 181.7 (29.4) 152.3 186.6 477.0 activities before interest Net interest (43.4) 3.3 (40.1) (50.0) (97.4) Profit on ordinary 138.3 (26.1) 112.2 136.6 379.6 activities before taxation Tax on profit on ordinary activities - UK (23.6) (26.2) (66.6) - Overseas (16.7) (13.9) (37.9) (40.3) (40.1) (104.5) Profit on ordinary activities 71.9 96.5 275.1 after taxation Dividends (62.1) (62.4) (207.2) Retained profit 9.8 34.1 67.9 Profit before amortisation of goodwill, exceptional items and 180.7 176.1 447.9 taxation Basic and diluted earnings per 7.2p 9.6p 27.4p share Basic and diluted earnings per share before exceptional items 13.7p 13.6p 34.5p and amortisation of goodwill Dividend per share 6.2p 6.2p 20.6p THE GREAT UNIVERSAL STORES P.L.C. GROUP BALANCE SHEET AT 30 SEPTEMBER 2000 30.9.00 30.9.99 31.3.00 (Restated) (Note 1) £m £m £m Fixed assets Goodwill 1,569.2 1,465.5 1,437.6 Other intangible assets 161.9 126.2 139.1 Tangible assets 719.5 818.7 834.7 Investment in joint venture 216.0 237.5 210.9 Other fixed asset investments 80.2 41.6 53.4 2,746.8 2,689.5 2,675.7 Current assets Stocks 600.6 585.9 528.6 Debtors - due within one year 1,514.3 1,551.4 1,525.7 - due after more than one 309.2 336.9 311.0 year Securitised receivables 896.4 861.6 909.7 Less: non-recourse borrowings (857.2) (830.0) (877.7) 39.2 31.6 32.0 Investments 48.0 35.7 33.7 Bank balances and cash 344.0 264.8 388.5 2,855.3 2,806.3 2,819.5 Creditors Amounts falling due within one year (1,709.9) (1,989.6) (1,683.8) Net current assets 1,145.4 816.7 1,135.7 Total assets less current 3,892.2 3,506.2 3,811.4 liabilities Creditors - amounts falling due (1,247.8) (921.7) (1,207.2) after more than one year Provisions for liabilities and (137.3) (126.4) (137.9) charges Net assets 2,507.1 2,458.1 2,466.3 Capital and reserves Called up share capital 251.5 251.5 251.5 Share premium account 0.6 0.3 0.4 Revaluation reserve 151.6 307.0 280.9 Profit and loss account 2,078.1 1,899.3 1,933.5 Shareholders' funds 2,481.8 2,458.1 2,466.3 Minority interest 25.3 - - Capital employed 2,507.1 2,458.1 2,466.3 THE GREAT UNIVERSAL STORES P.L.C. GROUP CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Six months to Six months to Year to 30.9.00 30.9.99 31.3.00 £m £m £m Cash flow from operating activities Operating profit 142.5 164.2 420.7 Depreciation and amortisation 148.5 151.1 299.4 charges Change in working capital - (repayment)/proceeds (21.0) 430.0 477.7 of securitised borrowings - other 33.1 (74.0) (50.2) 303.1 671.3 1,147.6 Dividends received from associated 5.6 4.4 6.7 undertakings Returns on investments and (28.3) (36.8) (62.2) servicing of finance Taxation (41.5) (41.9) (80.8) Capital expenditure (129.0) (138.5) (263.8) Financial investment (32.5) 11.7 61.4 Acquisition of subsidiaries (172.3) (0.8) (6.1) Disposal of subsidiaries 171.5 - - Dividends paid (144.2) (144.8) (207.2) Cash (outflow)/inflow before (67.6) 324.6 595.6 management of liquid resources and financing Management of liquid resources 47.0 21.0 (120.9) Financing - issue of shares 0.2 0.4 0.5 - change in debt and (101.3) (379.0) (411.8) lease financing (Decrease)/increase in cash (121.7) (33.0) 63.4 Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash (121.7) (33.0) 63.4 Cash outflow from movement 101.3 379.0 411.8 in debt and lease financing Cash (inflow)/outflow from (47.0) (21.0) 120.9 movement in liquid resources Movement in net debt resulting (67.4) 325.0 596.1 from cash flows New finance leases (2.0) (2.8) (9.3) Exchange movements (53.6) 32.8 29.3 Movement in net debt (123.0) 355.0 616.1 Net debt at beginning of period (1,053.7) (1,669.8) (1,669.8) Net debt at end of period (1,176.7) (1,314.8) (1,053.7) THE GREAT UNIVERSAL STORES P.L.C. DIVISIONAL ANALYSIS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Turnover Profit before taxation Six months to Year to Six months to Year to 30.9.00 30.9.99 31.3.00 30.9.00 30.9.99 31.3.00 (Restated) (Restated) (Restated)(Restated) (Note 1) (Note 1) (Note 1) (Note 1) £m £m £m £m £m £m Experian 486.8 470.3 949.2 105.7 97.2 200.6 Reality 219.3 212.0 444.2 1.6 1.3 2.8 Argos Retail Group Argos 944.0 806.0 2,057.0 35.7 31.7 137.4 Home Shopping 701.9 734.9 1,622.0 8.3 9.8 11.8 - UK & Ireland Financial - - - 2.7 6.8 14.4 Services Home Shopping 150.3 170.1 336.5 10.4 12.5 25.1 - Continental Europe 1,796.2 1,711.0 4,015.5 57.1 60.8 188.7 Burberry 185.4 94.1 229.8 26.6 4.3 21.7 South African 62.8 80.2 169.7 10.0 17.5 46.0 Retailing Finance Division 84.3 109.1 225.3 18.1 32.5 58.5 Property - - - 14.6 16.0 33.9 gusco.com - - - (5.5) - - 2,834.8 2,676.7 6,033.7 228.2 229.6 552.2 Inter-divisional (184.1) (181.1) (375.3) turnover 2,650.7 2,495.6 5,658.4 Central costs (4.1) (3.5) (6.9) 224.1 226.1 545.3 Net interest (43.4) (50.0) (97.4) Profit before amortisation of goodwill, 180.7 176.1 447.9 exceptional items and taxation Exceptional items (Note 2) (26.1) - 11.1 Amortisation of goodwill (42.4) (39.5) (79.4) (principally Argos) Profit before taxation 112.2 136.6 379.6 GEOGRAPHICAL ANALYSIS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Turnover Divisional Profit Six months to Year to Six months to Year to 30.9.00 30.9.99 31.3.00 30.9.00 30.9.99 31.3.00 £m £m £m £m £m £m United 1,959.7 1,837.4 4,324.1 111.5 119.1 309.8 Kingdom & Ireland Continental 271.7 238.1 478.7 25.3 16.0 35.6 Europe North America 351.1 335.2 676.5 73.6 70.2 147.4 Rest of World 68.2 84.9 179.1 13.7 20.8 52.5 2,650.7 2,495.6 5,658.4 224.1 226.1 545.3 THE GREAT UNIVERSAL STORES P.L.C. MOVEMENT IN SHAREHOLDERS' FUNDS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Six months to Six months to Year to 30.9.00 30.9.99 31.3.00 £m £m £m Profit on ordinary activities 71.9 96.5 275.1 after taxation Dividends - Interim (62.1) (62.4) (62.4) - Final - - (144.8) 9.8 34.1 67.9 Goodwill on disposals 34.7 - - Goodwill credited to reserves - 8.1 6.5 Shares issued under option schemes 0.2 0.4 0.5 Other recognised gains and losses (29.2) 18.5 (5.6) relating to the period (net) 15.5 61.1 69.3 Opening shareholders' funds 2,466.3 2,397.0 2,397.0 Closing shareholders' funds 2,481.8 2,458.1 2,466.3 The goodwill on disposals in the year relates to the sale of Highway Vehicle Management Limited. The goodwill credited to reserves relates to acquisitions by Experian prior to the adoption of FRS 10. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Six months to Six months to Year to 30.9.00 30.9.99 31.3.00 £m £m £m Profit on ordinary 71.9 96.5 275.1 activities after taxation Revaluation of properties (6.7) - 14.3 Currency translation (22.5) 18.5 (19.9) differences 42.7 115.0 269.5 Prior year adjustment (Note 1) - (12.1) (12.1) Total gains and losses 42.7 102.9 257.4 recognised in the period THE GREAT UNIVERSAL STORES P.L.C. ANALYSIS OF NET BORROWINGS AT 30 SEPTEMBER 2000 30.9.00 30.9.99 31.3.00 £m £m £m Cash and other liquid resources 223.1 154.6 392.1 Debt due within one year (191.1) (605.2) (272.7) Finance leases (17.8) (29.2) (23.9) Debt due after more than one year (1,190.9) (835.0) (1,149.2) Net debt at end of period (1,176.7) (1,314.8) (1,053.7) Non-recourse borrowings (857.2) (830.0) (877.7) Net borrowings at end of period (2,033.9) (2,144.8) (1,931.4) MORE TO FOLLOW

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