Trading Statement
GUS PLC
12 July 2006
12 July 2006
GUS plc
First Quarter Trading Update
GUS plc, the retail and business services group, today issues its regular update
on trading.
John Peace, Group Chief Executive of GUS, said:
'We are pleased with the progress of both ARG and Experian in the first quarter
of our new financial year, each of which is trading in line with expectations.
Both businesses have clear strategies for growth, putting them in good shape for
their future as independent companies.'
Argos Retail Group (ARG)
% change in sales year-on-year
Three months to 30 June 2006 %
Argos - total 14
- like-for-like 7
Four months to 30 June 2006* (1)
Homebase - total (5)
- like-for-like
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* Homebase's year-end is the end of February to avoid distortions relating to
the timing of Easter
In the first quarter of the financial year, the non-food, non-clothing market in
the UK was stronger than expected. However, ARG remains cautious on the outlook
for a recovery in the rate of growth in consumer spending and expects the DIY
market in particular to remain difficult.
Argos
Argos again outperformed its market in the first quarter, with total sales up
14% of which new stores contributed 7%. At 30 June 2006, Argos traded from 663
stores with six new stores opened in the quarter. Like-for-like sales increased
by 7%. Consumer electronics performed very strongly, especially in flat panel TV
packages and set top boxes in the lead up to and during the World Cup. There was
also good sales growth in bedroom furniture, photography and video game systems.
This strong sales performance was, however, substantially offset by a related
reduction in gross margin compared to the previous year. This was driven by the
shift in the product mix and by the popularity of Argos' promotional offers in
the quarter, partially countered by the benefits obtained from ARG's supply
chain initiatives.
Argos Direct, the delivery to home operation, grew sales by 10% in the first
quarter and accounted for 25% of Argos' revenue. Within this, sales ordered over
the Internet for delivery to home rose by 46%, representing 8% of total revenue.
An additional 10% of sales were reserved by phone or the Internet for later
collection in store (the service known as Check and Reserve), which was 69%
ahead of the same period last year. The Autumn/Winter 2006 catalogue will launch
on 29 July and will offer about 17,000 lines to all customers as the Argos Extra
extended ranges continue to be made available across all stores and channels.
Homebase
Sales at Homebase decreased in the four months to 30 June 2006 by 1% in total,
of which 4% came from new stores. Homebase opened three stores in the quarter
bringing the total at 30 June 2006 to 300, of which 151 had a mezzanine floor.
Like-for-like sales declined by 5%. Although kitchens and furniture showed
strong growth, core DIY and decorating ranges remained weak. As planned, gross
margin was ahead of the previous year as a result of a reduced level of
promotional activity together with the benefits obtained from ARG's supply chain
initiatives.
Experian
% change in sales year-on-year for the three months to 30 June 2006
Continuing activities At actual exchange At constant
only* rates % exchange rates %
Experian North America 29 26
Experian International 16 15
Global Experian 23 21
* As disclosed in the preliminary results announcement on 24 May 2006, two
businesses have been treated as discontinuing activities from 1 April 2006.
These are MetaReward's incentive marketing websites which have been closed and
large scale UK account processing, where Experian has announced its phased
withdrawal by Autumn 2009.
In the three months to 30 June 2006, Experian grew its sales from continuing
activities by 21% at constant exchange rates. Organic growth was 8% with the
balance from acquisitions. This performance reflects the benefits of Experian's
broad portfolio by product, by sector and by geography.
Experian North America
In dollars, sales from continuing activities in the three months to 30 June 2006
increased by 26% in total. Corporate acquisitions generated 17% of this, largely
in Interactive, while organic growth was the remaining 9%.
In dollars and excluding acquisitions, Credit Information and Solutions grew
sales slightly in the quarter, against a period where the comparatives were very
strong (H1 2005/6: +18%). There was double-digit growth in decision solutions,
helped by client wins in application processing, fraud authentication, account
management and triggers. In dollars, sales in Marketing Information and
Solutions together were in line with the first quarter last year excluding
acquisitions. There was strong growth in email marketing and research services
but continuing weakness in data sales and list processing.
In dollars, Experian Interactive sales grew by about 75% in total to reach
almost 40% of Experian North America's revenue. Organic growth was strong in
both Consumer Direct and LowerMyBills.com, which was acquired in May 2005.
Experian International
In the three months to 30 June 2006, sales from continuing activities at
Experian International increased by 15% in total at constant exchange rates.
Organic growth was 7% in the period and the contribution from acquisitions,
largely ClarityBlue, was 8%. Experian in the UK delivered another robust
performance despite a subdued UK credit environment.
At constant exchange rates, Credit Information and Solutions together saw good
growth, led by decision solutions in Europe and Consumer Direct in the UK.
Excluding acquisitions, Marketing Information and Solutions together saw solid
growth in the quarter with particular strength in QAS. Outsourcing also
demonstrated solid growth and recently won a two-year contract with the Ministry
of Health in France.
Experian International has made further small complementary acquisitions during
the first quarter of the year, including Eiger Systems, a market-leading
provider of bank account validation and payment processing software. This
complements QAS, which validates customers' names and addresses, and which is
growing strongly around the world, leveraging Experian's sales force and
infrastructure.
Annual General Meeting
GUS will hold its AGM on 19 July 2006.
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 update at 3pm today, with a recording available
later on the GUS website.
Certain statements made in this Trading Update 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 events or results to differ
materially from any expected future events or results referred to in these
forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
ILLIR