Trading Statement
GUS PLC
14 January 2002
14 January 2002
GUS PLC
THIRD QUARTER TRADING UPDATE
GUS plc, the retail and business services group, today issues its regular
update on trading in its main businesses.
John Peace, Group Chief Executive of GUS, said:
'Against the background of current economic conditions, GUS has made further
good progress in the third quarter, highlighted by Argos which delivered
outstanding like-for-like sales growth of 14%, driven by more choice, low
prices and increased convenience.'
Experian
% change in sales year on year for the three months to 31 December 2001
%
Total Underlying*
Global Experian 8% 5%
Experian UK 10% 8%
Experian Rest of World 24% 12%
Experian International 16% 10%
Experian North America 5% 2%
* Underlying sales growth excludes acquisitions and divestments and is at
constant exchange rates.
Experian's worldwide sales for the third quarter showed a 5% underlying
increase.
Experian International, which accounts for over one-third of worldwide sales,
has continued to deliver double-digit sales growth during the third quarter.
Underlying sales were up by 8% in the UK, with continued double-digit growth
in Credit Information and Credit Solutions but some weakness in sales of
Marketing Information to the financial services sector. Underlying sales
growth in Rest of World was 12%, led by a strong performance by Outsourcing in
France.
Sales in Experian North America increased by 2% on an underlying basis. Sales
in Credit Information grew, benefiting from increased demand from the
automotive and mortgage sectors. Sales in Marketing Solutions and Outsourcing
were down year-on-year, reflecting a reduction in marketing activity by US
corporate clients due to recessionary economic pressures and the impact of
terrorist attacks. With tougher sales comparatives in the January to March
quarter, the business is continuing to focus aggressively on cost
efficiencies. FARES, the real estate information joint venture, again
performed very well in the quarter.
Experian North America has further strengthened its management team. Don
Robert, who joined Experian in April 2001, has been appointed Chief Operating
Officer. He is succeeded as President of Information Solutions by Chris
Callero, who previously held senior positions at Bank of America, Bankers
Trust and Wink Communications.
Argos Retail Group
% change in sales year on year for the 14 weeks to 5 January 2002
%
Argos* - total 17
- like-for-like 14
UK Home Shopping (1)
* These figures exclude the impact of Argos Additions and jungle.com.
Against a background of strong consumer demand in its markets, sales at Argos,
excluding Argos Additions and jungle.com, grew by 17% and by 14% on a
like-for-like basis. Sales were particularly strong in consumer electronics,
furniture and toys. Gross margins remained firm.
Argos continues to drive sales through more choice, low prices and increased
convenience. In particular, Argos Direct, the delivery-to-home operation,
traded very well, with sales up by nearly two-thirds over the same period last
year. In the third quarter, Argos Direct accounted for 12% of total Argos'
sales - up from 9% in the comparable period last year.
Sales at UK Home Shopping for the period were marginally below last year.
Average spend per customer increased as the business continued to focus on its
more profitable customers. Gross margins were unchanged compared to last
year.
We continue to invest in initiatives across Argos Retail Group:
- Argos plans to open 24 stores this financial year, as part of its
recently announced accelerated store opening programme, bringing the total to
493 by the end of March 2002;
- Argos Additions has shown continued growth, achieving sales of £36m in
the period;
- at the end of December, the number of Argos store card customers had
grown ahead of expectations to over 500,000, up from 350,000 at September
2001. Balances outstanding were nearly £100m; and
- e-commerce sales in the third quarter, including jungle.com, were £48m,
two-thirds higher than last year.
Reality
In what was an exceptionally busy period supporting Argos Retail Group, core
logistics sales to third parties still grew by over 10% in the third quarter.
Total reported sales to external customers fell modestly in the same period,
due to a marked slowdown in market demand for web design services and the
withdrawal from certain peripheral activities.
Given the growing importance of home delivery to Argos Retail Group, Reality
will report into ARG from 1 April 2002. Experian International will take on
responsibility for call centre and related activities, serving predominantly
external financial services clients. Reality will continue to focus on the
two key objectives it has successfully pursued since its formation in May
2000. These are to reduce costs and improve service levels for ARG and
external customers and to win further third party business.
Burberry
% change in sales year on year for the three months to 31 December 2001
%
Total (including Spain) 1
Underlying (including Spain)* (2)
* Underlying sales growth is at constant exchange rates and excludes
discontinued Wholesale activities.
Despite the immediate negative impact of September 11, reported sales at
Burberry in the third quarter were little changed from last year.
Royalty income in the third quarter was strong, reflecting further volume
growth in Japan in particular.
Sales in Burberry's 60 directly-operated Retail stores were slightly up at
constant exchange rates compared to the same quarter last year. Sales
recovered strongly in December, especially in the United States.
The third quarter is traditionally a quiet period for Burberry's Wholesale
operations and sales were modestly down on last year. However, for the period
July to December 2001, which is largely comprised of Autumn/Winter deliveries,
Wholesale sales, including Spain, were up 14% on an underlying basis. The
overall Spring/Summer 2002 Wholesale order book indicates that single digit
sales growth should be achievable.
Burberry has now completed the acquisition of the operations of its
distributors based in Hong Kong, Singapore and Australia, with effect from 1
January 2002. The initial cost will not be greater than £15m and the deal is
expected to be immediately earnings enhancing, adding incremental operating
profit of £5m to £10m in the year to March 2003.
It remains the Group's intention to arrange a partial IPO for Burberry by June
2002, subject to market conditions.
Other divisions
Sales of our South African Retailing business in rand for the third quarter
were unchanged compared to last year. The weakness of the rand will affect
its reported profits (£1=15 rand for the third quarter this year, compared to
last year's average rate of £1=10.84 rand).
Future announcements
GUS will announce its preliminary results on 29 May 2002. The Second Half
Trading Update will be on 16 April 2002.
Enquiries:
GUS David Tyler Finance Director Tel: 020 7495 0070
Fay Dodds Investor Relations
Finsbury Rupert Younger Tel: 020 7251 3801
Rollo Head
The announcement is also available on the GUS web site www.gusplc.com.
All % change comments refer to growth compared to the same period a year
earlier, unless otherwise stated.