Interim Results Part One

GUS PLC
20 November 2003


20 November 2003




   NOT FOR RELEASE OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, JAPAN, SOUTH
                          AFRICA OR THE UNITED STATES

                                    GUS plc

Interim Results for the Six Months

Ended 30 September 2003


Highlights

-   Record interim profits, with a 44% increase in profit before
    amortisation of goodwill, exceptional items and taxation to £354m (2002: 
    £247m)

-   Profit before tax £247m (2002: £329m)

-   44% increase in basic earnings per share before amortisation of
    goodwill and exceptional items to 26.0p (2002: 18.0p)

-   Basic earnings per share 15.3p (2002: 26.9p)

-   Net debt reduced by £0.6bn to £1.5bn

-   16% increase in the interim dividend to 8.0p (2002: 6.9p)

-   Argos Retail Group: Argos sales up 14% and profit up 27%; good
    operational progress at Homebase

-   Experian: sales up 13% and profit up 28% at constant exchange rates

-   Burberry: sales up 17% and profit up 21% at constant exchange rates

Sir Victor Blank, Chairman of GUS, commented:
'We are delighted with the progress being made by our three main businesses, all
of which have the potential to be leaders in their sector. I would like to thank
everybody in GUS for their contribution to the results.'

John Peace, Chief Executive of GUS, commented:
'Each of our main businesses continued to perform strongly, leading to record
first half profits for GUS. Although we face some challenges in the second half,
we remain confident in the outlook for the future.'

Enquiries

GUS
John Peace Chief Executive 020 7495 0070
David Tyler Finance Director
Fay Dodds Director of Investor Relations

Finsbury
Rupert Younger 020 7251 3801
Rollo Head

There will be a presentation today to analysts and institutions at 9.30am at the
Merrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ and a
press conference at 11.30am at the same location.

GUS and Burberry announcements are available on the GUS website: www.gusplc.com.
The GUS slide pack and presentation to analysts and institutions will also be
available there later in the day.

There will also be a conference call to discuss the results at 3.00pm today (UK
time). A recording will be available later on the GUS website.

GUS will now issue its Third Quarter Trading Update on 15 January 2004. Its
preliminary results for the year to 31 March 2004 will be announced on 25 May
2004.

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.

This announcement has been issued by GUS plc and is the sole responsibility of
GUS plc. This announcement is for information purposes only and does not
constitute an offer or an invitation to acquire or dispose of any securities.
Neither this announcement nor the information contained herein is an offer of
securities for sale in the United States or in any jurisdiction in which such an
offer is unlawful. The ordinary shares in Burberry Group plc have not been and
will not be registered under the U.S. Securities Act of 1933, as amended (the
'Securities Act') and may not be offered or sold within the United States absent
registration under the Securities Act or an exemption from registration. No
public offering of the securities referred to herein will be made in the United
States, the United Kingdom or elsewhere. Stabilisation/FSA.

CHIEF EXECUTIVE'S REVIEW

In the first half of the current financial year, GUS has generated record
interim profits, strong free cash flow and demonstrated continuing strategic and
operational progress in its major businesses.

Record interim profits
Group profit before amortisation of goodwill, exceptional items and taxation was
£354m, an increase of 44% compared to the same period last year. Even after
adjusting for major acquisitions and disposals, profit still grew by 27%. This
is the sixth consecutive half-year where profit has increased by more than 10%
over the comparative period.

Strong free cash flow
Free cash flow of £258m was generated in the first half despite substantial
investment in the main businesses. Capital expenditure was £158m and a further
£80m was invested in the store card and personal loan books in Argos and
Homebase.

Continuing strategic progress
GUS continues to reposition its portfolio of businesses and focus on fewer
activities. A major step during the first half of the year was the sale for
about £590m of the Home shopping businesses in the UK, Ireland and Sweden and
Reality, the logistics and customer care business in the UK. This has been
followed by the sale of the 50% stake in GUS' property joint venture, announced
earlier this week, for a total of £163m. These proceeds provide a highly
satisfactory final step in the process of running down the Group's investment
property portfolio. The cash released from these disposals, together with the
wind down of the Finance division, has been partly redeployed in infill
acquisitions, mainly in Experian.

The planned partial IPO for South African Retailing, announced in May 2003, is
on track for calendar 2004, subject to market conditions. This will enable GUS
to release some value for shareholders, while enhancing the development
opportunities for the South African business.

Continuing operational progress
Argos, Experian and Burberry all reported record interim profits as each pursued
its clear strategy for growth. Homebase is making considerable progress in
strengthening its business and building a platform for future long-term growth.

Increased interim dividend
The Board has announced a 16% increase in the interim dividend to 8.0p (2002:
6.9p).

Sale of shares in Burberry Group plc
As announced yesterday, GUS has agreed to sell a 10% stake in Burberry in order
to improve the liquidity in Burberry shares. With its 67% holding, GUS remains a
committed investor in Burberry.

The proceeds of approximately £180m will be used initially to reduce debt. The
Board of GUS now plans to review the possibility of returning surplus funds to
shareholders, while at the same time ensuring a strong balance sheet and credit
rating.

GROUP RESULTS

In the six months to 30 September 2003, sales grew by 24% to £3,771m. Profit
before amortisation of goodwill, exceptional items and taxation increased by 44%
to £354m, compared to £247m in the same period last year. Profit growth was 27%,
excluding Homebase, the ARG discontinued activities and the associated impact on
interest.

Earnings per share before amortisation of goodwill and exceptional items
increased by 44% to 26.0p (2002: 18.0p). The Group's effective tax rate for the
year (based on profit before amortisation of goodwill and before profits/losses
on sale of businesses) is expected to be 23.9%.

The Group generated £258m of free cash flow in the period before acquisitions,
disposals and dividends (2002: £226m). Net debt has been reduced from £2.1bn at
31 March 2003 to £1.5bn at 30 September 2003.

6 months to 30 September             Sales          Profit before taxation
                                  2003     2002           2003           2002
                                    £m       £m             £m             £m
Argos Retail Group1              2,470    1,339          153.0           62.5
Experian                           638      578          145.7          118.1
Burberry                           321      274           66.9           55.1
Other                               73       56           25.0           19.8
Continuing activities            3,502    2,247          390.6          255.5

Discontinued activities (ARG)2     269      791              -           13.7
Total                            3,771    3,038          390.6          269.2

Net interest                                             (36.2)         (22.4)
Profit before amortisation of goodwill,
exceptional items and taxation                           354.4          246.8
Amortisation of goodwill                                 (91.4)         (56.0)
Exceptional items                                        (15.6)         138.0
Profit before taxation                                   247.4          328.8

EPS before amortisation of goodwill and
exceptional items                                         26.0p          18.0p
Reported EPS                                              15.3p          26.9p

The profit figures shown against each business above are operating profit, which
is defined as profit before interest, taxation, exceptional items and goodwill
amortisation. The same definition of operating profit is used throughout this
announcement.

1. See Appendix One for details on restated sales and profits following the
disposal of Home shopping and Reality in May 2003.

2. 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.

ARGOS RETAIL GROUP

6 months to 30 September                   Sales 1           Operating profit 1
----------------------                  --------------         --------------
                                                              --------  --------
                                         2003         2002      2003      2002
                                           £m           £m        £m        £m
                                       --------     --------  --------  --------
----------------------
Argos                                   1,390        1,218      73.9      58.0
Homebase 2                                938            -      71.5         -
Financial Services                         25           14      (3.3)     (6.2)
Wehkamp                                   117          107      10.9      10.7
                                       --------     --------  --------  --------
Total                                   2,470        1,339     153.0      62.5
----------------------                 --------     --------  --------  --------
Operating margin                                                 6.2%      4.7%
----------------------                 --------     --------  --------  --------

1. Excludes discontinued Home shopping and Reality businesses. See Appendix One
for details on restated sales and profits.

2. Homebase sales and operating profit are for the seven month period to 30
September 2003.

The profile of Argos Retail Group (ARG) has changed considerably in the last
twelve months with the acquisition of Homebase in December 2002 followed by the
disposal of the Home shopping businesses and Reality in May 2003.

Now focused principally on UK general merchandise, ARG is a multi-brand,
multi-channel group which is developing an integrated business model. This
involves separate customer facing brands supported, wherever appropriate, by a
central infrastructure. The latter covers sourcing and supplier management,
customer services (including home delivery and contact centres), financial
services, multi-channel capabilities and shared services such as IT, finance,
human resources and property. A commercial director and a customer services
director have recently been appointed to the ARG board from within the group to
ensure the delivery of all potential benefits from leveraging ARG's scale and
expertise.


Argos

6 months to 30 September                   2003         2002 1           Change
                                             £m             £m
Sales                                     1,390          1,218              14%
Operating profit                           73.9           58.0              27%
Operating margin                            5.3%           4.8%

1. Restated to exclude Argos Additions.

Within an increasingly competitive general merchandise market in the UK, Argos
aims to win more customers and a higher share of their spend by offering the
most compelling combination of choice, value and convenience. Argos continues to
outperform its market and grew share in all of its major categories during the
first half.

Operational review

Increased choice
There are an additional 1,300 lines in the current Autumn/Winter catalogue
compared to a year ago, bringing the total to 12,700. The new lines are in areas
such as furniture, jewellery and consumer electronics. Range extensions in
previous catalogues continued to perform well, especially white goods and gifts.

The Argos Extra trial is proceeding well. The current Extra catalogue, which has
about 17,000 lines is available in 11 large stores. It is also in 15
neighbourhood stores, where the Extra range is available within 48 hours, either
for collection from store or for home delivery. Latest results are encouraging
and Argos Extra will be available in about 35 more stores from January 2004.

Improved value
Argos continues to lower prices, with prices on re-included lines in the current
Autumn/Winter catalogue 4% lower on average than last year.

This investment in price is enabled by further progress in Argos' supply chain
programme. For example, the new 60,000 square metre central distribution centre
in Barton recently became operational. Over time, this will handle all direct
imports, making it more efficient for Argos to increase the proportion of direct
imports from the current 17% of sales (nearly 1,900 lines in the Autumn/Winter
catalogue). About half of the £50m annual supply chain gains expected by March
2006 have been realised to date.

Increased convenience
Argos opened a further 17 stores in the first half, bringing the total to 540.
The return on capital from new stores continues to exceed the required hurdle
rates. A further 18 stores are planned for the second half, with about 35 in the
next financial year. Argos is on track to refurbish all small stores by the end
of this financial year.

Argos Direct, the delivery to home operation, grew strongly again. In the first
half, it accounted for 23% of total sales, up from 20% in the same period last
year. Sales of delivery-only items, such as furniture and widescreen TVs, grew
by 35%. Home delivery of items which are also available in-store grew by 22%.
The second two-man delivery warehouse, at Marsh Leys, Bedford, which opened
earlier this year is building to capacity.

Argos will have quick pay kiosks in over 220 stores for peak Christmas trading.
In those stores where they are present, kiosks process about 7% of sales. This
reduces queuing in-store for customers and improves staff efficiency.

4% of Argos' sales in the first half were ordered over the Internet. In
addition, 6% of total sales were reserved by customers, either by phone,
Internet or text messaging, for later collection in-store.

Financial review
Argos again outperformed in its market. In the first six months of the year,
sales at Argos were up by 14%. New stores contributed 7% of this growth, with an
increase in like-for-like sales of 7%. Sales grew particularly strongly in
consumer electronics, mobile phones, bedding, textiles and toys.

Gross margins at Argos were slightly up in the first half, with continuing
supply chain benefits funding the impact of adverse product mix and price
reductions.

Operating profit increased by 27%, with a further margin advance to 5.3% (up
0.5%). This reflects the benefits of strong volume growth (both new space and
like-for-like). The first half of the year also included the costs of the Argos
Extra trial and costs associated with the two new large distribution centres,
which are not yet working at full capacity.

OFT update
Argos expects the Office of Fair Trading ('OFT') to make a further announcement
on 21 November on its investigation into alleged price fixing agreements. This
follows the addition by the OFT of three new witness statements into its
original evidence. Argos continues, as it has for the last 12 months, to refute
vigorously any suggestion that it has been involved in any anti-competitive
activity. The toy market in the UK is very price competitive and Argos prides
itself on the great value of its toy offer.

Homebase

7 months to September 2003                                     2003     2002 1
                                                                £m          £m
Sales                                                          938           -
Operating profit                                              71.5           -
Operating margin                                               7.6%

1. In the seven month period to 30 September 2002, Homebase had sales of £899m
and operating profit of £77.4m.

Homebase is being positioned as the UK's leading home enhancement retailer. Its
strategic priorities are to:

-          improve the existing core business;
-          enhance and extend its home furnishings offer; and
-          deliver synergies by leveraging the scale and expertise of ARG.

Operational review
During the seven months under review, the initial objective was to operate
effectively through Homebase's first Easter peak trading period under ARG
ownership. Following that, the focus has been on addressing its strategic
priorities.

Improve the existing core business. As expected at the time of acquisition,
there are significant opportunities to improve retail disciplines.

Customer service is being improved. A major culture change programme has been
introduced to improve areas such as customer service. By Easter 2004, all 17,000
staff will have completed training. To date, over 15,000 employees, both
in-store and at the centre, have started to participate in this programme.

Stock availability has been improved. On shelf availability at Homebase has been
low, due primarily to poor processes. It has been improved in recent months by
better stockroom management and benefits deriving from the recently introduced
SAP system.

In-store standards are being improved to give consistency across the chain.

Homebase will continue to open new stores. At 30 September 2003, it had 273
stores, having opened two, closed two and relocated two during the first half of
the year. For the full year, Homebase plans to open seven stores, close two and
relocate three stores.

Enhance and extend its home furnishings offer. The Homebase brand and customer
franchise allow it to differentiate itself from its competitors to develop
beyond DIY into the long-term growth areas of furniture and homewares. Since
acquisition, there has been much progress here.

New kitchen and bathroom ranges have now been rolled out to around 200 stores.

An additional 16 mezzanines were added in the first half, bringing the total to
52. As previously stated, the mezzanine floors provide additional space for
kitchens, bathrooms and furniture, give about a 15% uplift in sales and an
attractive return on investment. About 15 new mezzanines will be added in the
second half.

A new home furnishings range, called miHome, has been trialled in ten stores
since September 2003, offering a modern, quality product at very competitive
prices. New merchandising techniques and different space allocation have also
been trialled on four mezzanine floors since October 2003. Results from both of
these initiatives will be incorporated into mezzanine plans for the next
financial year.

Leveraging the scale and expertise of ARG. The degree of overlap between Argos
and Homebase in products, suppliers and skills means that there are significant
gains to be achieved over time by working closely together in many areas.

Supply chain improvements are under way at Homebase. At the time of acquisition,
ARG identified at least £20m of annual synergies, primarily from scale benefits
and direct importing. At least £5m of savings should be achieved in the current
financial year, primarily through terms harmonisation between Argos and
Homebase.

Personal loans and a new store card have been launched at Homebase, using the
same infrastructure and systems as Argos. Over time, these are expected to drive
product sales, especially of big ticket items, by providing Homebase customers
with a flexible and competitive credit offer.

Improved home delivery processes have been introduced, reducing customer
delivery times and increasing store efficiency. A longer-term solution is being
developed building on Argos' expertise.

Financial review
In the seven months to September 2003, Homebase increased its sales by 4%, or 2%
on a like-for-like basis. Although in general the DIY market slowed in the
second quarter, good sales performances were seen from kitchens, bathrooms and
garden. Gross margins were in line with the same period last year.

Operating profit was £71.5m in the seven months to 30 September 2003. This is
after additional costs in respect of depreciation and rates, mainly driven by
the year-on-year impact of the roll-out of mezzanines, together with costs of
change of approximately £3m. A similar cost is expected here in the second half.

Financial Services

6 months to 30 September                                   2003         2002 1
                                                             £m             £m
Sales                                                        25             14
Operating loss                                             (3.3)          (6.2)

1. Restated to exclude discontinued home shopping activities.

ARG Financial Services works closely with Argos and Homebase to provide their
customers with the most appropriate credit offers to drive product sales. By
doing so, it is also building a customer base to which it can cross-sell a range
of financial products, such as personal loans and insurance.

The Argos store card continued its strong performance during the first half of
the year, funding 9% of Argos sales. The Argos personal loans book more than
doubled during the first half. Homebase introduced its personal loan offer in
April 2003 and further revenue investment is expected in the second half of the
year to support both this and the new Homebase store card, which was launched in
October 2003.

At 30 September 2003, the gross loan book at ARG Financial Services was £271m,
up from £192m at the beginning of the financial year.


Wehkamp

6 months to 30 September                2003      2002 1              Change at
                                          £m          £m            constant FX
                                                                           rates
Sales                                    117         107                    (1%)
Operating profit                        10.9        10.7                    (8%)
Operating margin                         9.3%       10.0%

1. Restated to exclude discontinued Swedish home shopping activities.

Sales and operating profit at Wehkamp, the leading home shopping brand in
Holland, were 1% and 8% lower in euros. This reflects the difficult economy and
retail sector in the Netherlands and increased competition in the Dutch home
shopping market. Sales through Wehkamp's website continue to grow, reaching 20%
of total revenue compared to 14% in the same period last year.

Discontinued activities
On 27 May 2003, GUS announced the disposal for about £590m of its Home shopping
businesses in the UK, Ireland and Sweden, together with Reality, its logistics
and customer care business. The disposal was unconditional in the United
Kingdom. Gross disposal proceeds of £450m have been received and the balance of
about £140m is due in May 2006.


EXPERIAN

6 months to 30 September                    Sales             Operating profit
---------------------                   ---------------        ---------------
                                                              -------- ---------
                                         2003          2002     2003      2002
                                           £m            £m       £m        £m
                                       --------     --------- -------- ---------
---------------------
Experian North America                    365           355     93.9      80.6
Experian International                    273           223     51.8      37.5
                                       --------     --------- -------- ---------
Total                                     638           578    145.7     118.1
---------------------                  --------     --------- -------- ---------
Operating margin                                                22.8%     20.4%
---------------------                  --------     --------- -------- ---------

Experian had another successful six months. At constant exchange rates, sales
increased by 13% and operating profit by 28%. Experian continued to generate
very strong cash flow in the first half.

Additional segmental information on Experian is given in Appendix Two.

Strategic review
Experian has a clear global strategy for growth, against which further advances
were made in the first half.

Build on core businesses
Experian continues to win new business, including major database contracts in
North America and the contract to support the national UK launch of Marks &
Spencer's '&more' combined credit and loyalty card. It also continues to gain
share in new markets such as Spain.

Sell new solutions
Product innovation is key to Experian in driving growth and winning share.
Further investment was made in the first half in R&D and new product
development.

Grow by targeted acquisitions
In the financial year to date, Experian has spent over £100m on acquisitions.
These build on its core competencies (managing large databases and building
specialist analytical solutions), enabling Experian to leverage its assets and
skills more widely. Acquisitions bring new data or new products; they take
Experian into new geographical or vertical markets; and they strengthen core
operations by improving efficiencies.



Experian North America

6 months to 30 September                2003        2002              Change at
                                          £m          £m            constant FX
                                                                          rates
Sales                                    365         355                    10%
Operating profit                        93.9        80.6                    25%
Of which:
- Direct business                       70.0        65.5                    15%
- FARES                                 23.9        15.1                    69%
Operating margin                        25.7%       22.7%

In the first six months, Experian North America generated record sales and
profits, with sales up by 10% and operating profit by 25% in dollars.

Operational review
Emerging businesses grew strongly in the first half, including business
information, credit solutions, fraud solutions and Consumer Direct. The latter
grew sales in the first half by over 60%, accounting for 14% of Experian North
America sales. Experian further reinforced its market leadership by becoming the
premier provider of consumer credit services to the major Internet portals,
including Yahoo, AOL and MSN. At the end of the period, 1.64m consumers used the
annual subscription service.

There was good progress on the acquisition and integration of affiliate credit
bureaux. During the first half, an additional seven affiliates were purchased,
bringing the total to 18 at a cost of $100m.

The Transamerica real estate tax service and flood hazard certification
businesses were acquired in early October by FARES, Experian's 20% owned real
estate information joint venture. GUS contributed $75m of the total purchase
price of $375m. When combined with FARES' existing activities, the acquisition
gives market leadership and is expected to deliver annual synergies in excess of
$50m over the next 18 months. This acquisition is expected to be a major factor
offsetting the impact on the profit of FARES of the current slowdown in the
mortgage refinancing market.

Financial review
In dollars, sales in Credit Information and Solutions, which account for nearly
70% of North America sales, together grew by 14%. The main contributions to this
growth were from Consumer Direct, the acquisitions of its affiliate bureaux and
strength in the mortgage market although, as anticipated, this slowed as the
half progressed.

In dollars, sales in Marketing Information and Solutions (nearly 25% of sales)
together grew by 3%. Marketing Information sales were lower than last year,
affected by continued weakness in the direct marketing industry, especially in
the catalogue and retail sectors. However, Experian achieved growth in Marketing
Solutions in particular by delivering some large database management projects
for clients in the telecommunications, retail and financial services sectors.

Operating profit increased by $30m or 25% to $152m. FARES had a record half,
contributing $16m of this growth. It benefited from the exceptionally strong
mortgage market and has now begun to reduce cost levels as this slows.

Excluding FARES, operating profit grew by 15%, expanding the operating margin by
0.8% to 19.2%. Although there were significant increases in cost categories such
as information security, insurance and healthcare, tight controls over all other
costs remained in place.

Experian International

6 months to 30 September                 2003         2002           Change at
                                           £m           £m            constant
                                                                      FX rates
Sales                                     273          223                  18%
Operating profit                         51.8         37.5                  36%
Operating margin                         19.0%        16.8%

Experian International, which accounts for over 40% of total Experian sales,
again generated double-digit growth in sales and profits, with an increase in
sales of 18% and operating profit of 36% at constant exchange rates.
Acquisitions, net of disposals, contributed 11% to sales growth. Underlying
sales in the UK continued to grow at double-digit rates.

Operational review
Experian International won two significant multi-year, multi-million pound
account processing contracts, one renewing a four-year partnership with Morgan
Stanley and the other a five-year contract supporting Marks & Spencer in the
national launch of its '&more' combined credit and loyalty card. Experian has a
unique range of services which enable a complex project such as the '& more'
launch. This included the conversion of 2.6m accounts from store cards to
combined credit and loyalty cards during the month of October.

There has been good progress in integrating recent acquisitions, including
Nordic Info Group and Experian-Scorex. Both are delivering the financial and
operational benefits expected at the time of acquisition. The integration of
Experian-Scorex has created a global decision solutions company. Experts in each
region, supported by global product development, consultancy and marketing give
Experian-Scorex consistent products, greater global knowledge and most
importantly speed to market across the world. For example, Experian-Scorex is
helping financial institutions with their obligations under the Basel II Capital
Accord.

Financial review
Excluding acquisitions and disposals, sales of Credit Information and Credit
Solutions together grew by 12%. This was driven by strong growth in consumer
lending in the UK, by high demand for value-added products throughout the region
and for credit information in Spain and France in particular.

Sales of Marketing Information and Marketing Solutions together grew by 17%.
Despite a difficult background in the direct marketing industry in the UK,
Experian drove growth outside its core financial services clients, especially in
insurance and business-to-business marketing.

In Outsourcing, excluding the previously anticipated completion of a three-year
contract with one client in France, underlying sales were up 2% (down 7%
including this contract last year). Experian continued to win contracts in
business process outsourcing, call centres and card processing, especially in
France, for clients including Credit Lyonnais.

At constant exchange rates, operating profit at Experian International increased
by 36% in the first half, with the margin increase driven almost equally by
first time contributions from acquisitions and by progress in the underlying
business, especially changing mix and cost reduction efforts. Experian
International has also been rationalising underperforming activities, such as
outplacement in Holland and cheque printing in France.

BURBERRY

GUS has a majority stake in Burberry Group plc. The following is an abridged
version of the latter's Interim Results announcement released on 18 November
2003.

6 months to 30 September                 2003         2002           Change at
                                           £m           £m            constant
                                                                      FX rates
Sales                                     321          274                  17%
Operating profit                         66.9         55.1                  21%
Operating margin                         20.8%        20.1%

Underlying figures are calculated at constant exchange rates and exclude the
impact of the July 2002 acquisition of the operations of Burberry's distributor
in Korea.

Burberry performed strongly over the first half, both in terms of financial
results and strategic progress. This was despite challenging macro-economic,
political and health-related factors. It continued to drive the business through
implementing its key growth strategies by product, region and channel.

Operational review

By product
Burberry enjoyed progress in all major product categories, with the fastest
growth in menswear, reflecting design and merchandising efforts. Womenswear
showed continued strength across its product range. With the softness in travel
and tourist related sales, which affected the luxury goods industry generally,
accessories' share of the sales mix was broadly unchanged, in line with
expectations. Burberry Brit, the new fragrance, was launched in the US and
Europe during early Autumn, generating a strong response from consumers.


By region
Burberry continues to extend its global reach, opening, often with partners, six
more outlets in China, a store in Kuwait and from early 2004, a second store in
Tokyo and a first in Moscow.

Throughout the first half, the US was consistently the best performing market.
Sales growth in Spain resumed, reflecting repositioning efforts in that market.
Effective September 2003, Burberry assumed the direct role of managing and
monitoring the non-apparel licensees in Japan. Other European and Asian markets
generally experienced varying degrees of recovery during the first half.

By distribution channel
Retail sales increased 25% in the first half (20% on an underlying basis),
driven primarily by new stores. Burberry opened three stores in the first half,
including Milan, its first in Italy. At 30 September 2003, Burberry operated 136
retail locations. A further six openings are scheduled for the second half of
the year.

Wholesale revenues increased by 14% during the half (13% on an underlying
basis), driven by double-digit gains for the Autumn/Winter 2003 season. On the
basis of the orders received to date, Burberry anticipates mid to high
single-digit sales growth for the Spring/Summer 2004 season.

Licensing revenues in the first half increased by 13% (15% underlying),
reflecting increases in certain royalty rates and single-digit volume gains in
Japan, as well as strong sales gains by global product licensees including
fragrances, eyewear and children's apparel.

Financial review
Total sales in the first half increased by 17%, or by 16% on an underlying
basis. At constant exchange rates, operating profit increased by 21% to £66.9m.
Gross margin at 55.6% was stable while the expense ratio improved, reflecting
focused cost control and expense leverage. Operating margin expanded from 20.1%
to 20.8%.

SOUTH AFRICAN RETAILING

6 months to 30 September                 2003        2002             Change at
                                          £m          £m            constant FX
                                                                          rates
Sales                                     73          54                     6%
Operating profit                        19.8        13.8                    11%
Operating margin                        27.0%       25.6%

As stated in May 2003, GUS intends, subject to market conditions, to arrange a
partial IPO for its South African Retailing business on the JSE Securities
Exchange during calendar 2004. This process is on track. The business operates
399 Lewis furniture stores, 45 Best Electric stores and offers consumer
insurance and related financial services.

Sales in rand increased by 6% in the first half, driven by further improvements
in the merchandise offers and marketing strategies, together with better
economic conditions. Consumer confidence in South Africa has improved during the
last six months with reductions in taxes and lower inflation and interest rates.

Operating profit in rand grew by 11%, with a further 1.4% improvement in the
operating margin. Growth in financial services, lower repossession losses and
ongoing cost saving initiatives all contributed to this very healthy
performance. The business also produced strong cash flow.

The rand strengthened in the first half of the year from an average rate of £1=
R15.8 in 2002 to R12.2 in 2003. This increased reported sales by £17m and
operating profit by £4.5m. The rate at 30 September 2003 was £1=R11.6 (2002:
R16.5).

OTHER BUSINESSES

6 months to 30 September                             Operating profit/(loss)
                                                     2003 1               2002
                                                         £m                 £m

Property                                               15.0               12.6
Finance                                                   -                4.0
gusco.com                                                 -               (1.4)
Central costs                                          (9.8)              (9.2)

1. As previously announced, from 1 April 2003, the results of the Finance
Division and gusco.com have been included in central costs as they are so small.

Property
The joint venture with The British Land Company plc had a successful first half.
It sold a further 15 properties, raising £48m, which was used to repay
borrowings. GUS' 50% share of operating profit was ahead of the same period last
year, as gains on disposal were achieved due to the general upturn in the retail
property market. Increasing rents from the remaining portfolio offset the fall
in rental income from sold properties. At 30 September 2003, the portfolio of
104 properties was valued at £761m. GUS' investment in the joint venture,
including its loans to the venture, was £192m.

After the period end, GUS has sold its equity stake in the joint venture for
£120m. In addition, outstanding loans by GUS to the joint venture have been
fully repaid. It is anticipated that an exceptional loss of approximately £5m
will be booked in the second half of the year to reflect this transaction.

Central costs
The wind down of the General Guarantee Finance loan book was largely completed
by 31 March 2003, and all securitised debt repaid by that date. At 30 September
2003, GGF's outstanding advances, net of provisions, were £24m. MyPoints Europe,
the only remaining investment in gusco.com, was sold in September 2003.

INTEREST COSTS
Interest costs were £14m higher than last year. This largely reflects the
acquisition of Homebase (£22m increase in interest costs), partly offset by the
interest benefit arising on the proceeds from the disposal of the Home shopping
businesses (£8m).

EXCEPTIONAL ITEMS


6 months to 30 September                                     2003         2002
                                                               £m           £m
Net profit on partial IPO of Burberry                           -        139.3
Loss on sale of businesses                                  (15.6)        (1.3)
Total (charge)/profit                                       (15.6)       138.0

During the first half, the exceptional costs related to the sale of the Home
shopping businesses. The total sum of £15.6m is made up of £10.9m from the
write-off of goodwill on businesses that formed part of the activities sold and
£4.7m from transaction and other related costs.

CASH FLOW AND NET DEBT
The Group's free cash flow during the first half was £258m, compared to £226m in
the same period last year. After the payment of dividends, acquisitions and
disposals, there was a net cash inflow of £503m for the first half, compared to
£120m in the same period last year. Net debt was £1,513m at 30 September 2003.


APPENDIX ONE - Restated sales and profit

The Home shopping and Reality businesses were sold in May 2003. The tables below
restate sales and profits for the six months to 30 September 2002 between
continuing and discontinued activities.

ARG - Restated sales

Six months to 30 September 2002                    As reported        Restated
£m

Argos                                                    1,284           1,218
Home Shopping UK & Ireland                                 704               -
Financial Services                                          14              14
Home Shopping Continental Europe                           128             107
Continuing activities                                    2,130           1,339
Discontinued activities                                      -             791
Total                                                    2,130           2,130

ARG - Restated operating profit

Six months to 30 September 2002                    As reported        Restated
£m

Argos                                                     52.1            58.0
Home Shopping UK & Ireland                                 9.5               -
Financial Services                                         2.2            (6.2)
Home Shopping Continental Europe                          12.4            10.7
Continuing activities                                     76.2            62.5
Discontinued activities                                      -            13.7
Total                                                     76.2            76.2

GUS - Restated sales and operating profit

Six months to 30 September 2002                            Sales     Operating
£m                                                                      profit

ARG                                                        1,339          62.5
Experian                                                     578         118.1
Burberry                                                     274          55.1
Other                                                         56          19.8
Continuing activities                                      2,247         255.5
Discontinued activities (ARG)                                791          13.7
Total                                                      3,038         269.2

Net interest                                                             (22.4)

Profit before amortisation of goodwill, exceptional
items and taxation                                                       246.8


APPENDIX TWO - Additional information on Experian

Sales for Experian North America

6 months to 30 September                   2003         2002            Change
                                             $m           $m

Credit
- Information                               360          314                15%
- Solutions                                  48           43                11%
Total                                       408          357                14%

Marketing
- Information                                63           68                (8%)
- Solutions                                  77           68                14%
Total                                       140          136                 3%

Outsourcing                                  43           44                (3%)
Sales                                       591          537                10%

Sales for Experian International

6 months to 30 September                    2003       2002         Underlying
                                              £m         £m           change 1

Credit
- Information                                 68         45                 10%
- Solutions                                   85         69                 14%
Total                                        153        114                 12%

Marketing
- Information                                 29         25                 16%
- Solutions                                   17         14                 18%
Total                                         46         39                 17%

Outsourcing 2                                 75         71                 (7%)
Discontinued activities/eliminations          (1)        (1)                 -
Sales                                        273        223                  7%

1. Excluding major acquisitions and disposals and at constant exchange rates.

2. Excluding the previously anticipated completion of a three-year contract with
one client in France, Outsourcing sales were up 2%.




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