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GUS plc news 
Third quarter trading update
13/01/2005
GUS plc, the retail and business services group, today issues its regular update on trading.John Peace, Group Chief Executive of GUS, said: ?Despite a challenging retail environment, Argos again outperformed its market, with sales up 6% and gross margin slightly ahead. Experian achieved a record quarter for growth, with an exceptional increase in sales of 30% in North America. Against this background, we remain comfortable with expectations for the Group for the full year.? Argos Retail Group % change in sales year-on-year for 15 weeks to 8 January 2005
| | | % | | Argos | - total | 6 | | | - like-for-like | 1 | | | | Homebase | - total | 8 | | - like-for-like | 4 |
Argos
In a period where UK retail demand weakened significantly and competition intensified, Argos again outperformed its market by offering consumers improved choice, value and convenience. Its sales grew by 6% in total, while gross margin also increased.Of the 6% total sales growth in the period, 5% came from new stores, which continue to perform well, and 1% from like-for-like growth. Toys and jewellery were difficult markets; their contribution to sales in the third quarter is about double that in the rest of the year. There were, however, particularly strong performances from consumer electronics, photography, white goods, mobile phones and leisure. Argos achieved a slight increase in its gross margin in the period compared to last year, while continuing to offer lower prices and increasing its promotional activity. This rise was funded by gains from its supply chain programme and the impact of a weaker dollar. Argos Direct, the delivery-to-home operation, grew its sales by 15%, representing 18% of revenue compared to 17% in the same period last year. Orders via the Internet increased by about one third, contributing 5% of sales. The Argos website was again the most frequently visited UK high street retail website in December. The main Spring/Summer catalogue, which will be launched on 22 January, continues to offer customers better value and increased range with 13,300 lines, 3% more than a year ago. The new Argos Extra catalogue will have 17,500 lines, also up 3%. Argos Extra traded to plan over the peak period and preparations continue for national roll-out. The offer, which is currently available in 157 stores, will be extended to a further 30 stores and to the Internet by early summer. Homebase
Against a slowing market, Homebase increased its sales by 8% in total. Of this, 4% came from new stores, with four new stores having opened in the quarter, bringing the total to 287. Like-for-like sales increased by 4%, boosted by the timing of a ?10% off? event included at the end of this period but in the fourth quarter last year. New ranges in paint, tiling and lighting continued to perform well, as did kitchens and bathrooms. Gross margin was in line with last year, with supply chain gains funding increased promotional activity, especially in seasonal ranges and big ticket items. The in-store experience at Homebase continues to be enhanced through its focus on improving customer service, stock availability and retailing basics, as demonstrated by regular customer surveys. Experian % change in sales year-on-year for the three months to 31 December 2004
| Continuing activities only | At actual exchange rates % | At constant exchange rates % | | | Experian North America | 19 | 30 | | Experian International | 18 | 18 | | | | Global Experian | 19 | 24 |
Experian had a record quarter for growth, with total worldwide sales from continuing activities up by 24% at constant exchange rates. This builds on five consecutive six-month periods of double-digit sales growth. Experian North America
In dollars, Experian North America sales growth from continuing activities accelerated to 30% in the third quarter. Corporate acquisitions, most of which were completed in the second half of the last financial year, accounted for 13% of this. Exceptional growth was delivered by Consumer Direct and by MetaReward, its Internet lead-generation business acquired in November 2003. The latter had an outstanding quarter, undertaking some large, but lower margin, client projects. Excluding acquisitions, Credit sales showed very strong growth, reflecting product innovation and market share gains. Business information, account management and other value-added solutions (such as online notifications, Scorex and fraud) all grew strongly, as did Consumer Direct. Sales to the mortgage sector were level with last year. Excluding acquisitions, the rate of growth in Marketing sales, which account for about a quarter of total revenue, was mid-single digit. The first phase of the roll-out of the free credit report service, as required under the FACT Act, took effect from 1 December 2004. The planned cost recovery charge, initially at half its final level, contributed around 1% to total sales in the quarter. Experian International
Experian International, which accounts for about 45% of Experian?s worldwide revenue, grew sales from continuing activities by 18% at constant exchange rates. Of this, 12% came from acquisitions, predominantly QAS, the address management software company acquired in October 2004, which is trading to plan. Excluding acquisitions, broadly similar rates of sales growth were achieved by each of Credit, Marketing and Outsourcing. Double-digit sales growth was delivered in many areas including UK credit information and value?added products; in Business Strategies (micromarketing and economic forecasting); in information services in France; and from operations in Italy and in Eastern Europe (particularly Russia). Burberry GUS has a 66% stake in Burberry Group plc. The following summarises the latter?s Trading Update released on 12 January 2005. % change in sales year-on-year for the third quarter ended 1 January 2005
| % | | At actual exchange rates | 3 | | | At constant exchange rates | 7 |
Total revenues at Burberry in the third quarter increased by 7% at constant exchange rates. Retail sales, which accounted for approximately 59% of total revenue in the period, increased by 6% at constant exchange rates, driven by contributions from newly opened and refurbished stores. Wholesale sales increased by 5% at constant exchange rates. With Spring/Summer merchandise shipments concentrated in the fourth quarter, Burberry continues to anticipate mid to high single-digit growth for the Spring/Summer 2005 season. Licensing revenues increased by 14% at constant exchange rates, reflecting strong gains by global product licensees. Future announcements GUS will announce its Preliminary Results for the 12 months to 31 March 2005 on 25 May 2005. The Second Half Trading Update will be on 14 April 2005.
Enquiries GUS | | | | David Tyler | 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 results to differ materially from any expected future results in forward-looking statements.
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