FORM 6-K
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Special Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
The Securities and Exchange Act of 1934
For the date of April 09, 2008
SIGNET GROUP plc
(Translation of registrant's name into English)
15 Golden Square
London W1F 9JG
England
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
Signet Group plc (LSE and NYSE: SIG) Embargoed until 12.30 p.m. (BST)
Annual results for the 52 weeks ended 2 February 2008 9 April 2008
Signet Reports Year End Results
Reported Constant exchange rate
52 weeks
comparative basis(1)
- Group like for like sales down 0.7%
- Group total sales: $3,665.3m up 3.0% up 3.2%
- Group profit before tax: $333.5m down 16.8% down 17.4%
- Basic earnings per share: 12.6 cents down 18.2% down 18.7%
- Annual dividend per share: 7.277cents(2) up 1.6%
(1) See note 11 for reconciliation. (2) 2006/07 interim dividend paid in pounds
sterling, see note 8 for translation assumption.
Divisional Highlights
- US:- Kay strengthened its No.1 speciality brand position with sales of
$1,489.6m, c.40% greater than No.2 middle market speciality brand
- Jared sales up 13.8% to $756.4m, national network TV advertising
commenced
- Net space growth of 10%
- UK:- c.50% of sales from customer oriented store format
- H.Samuel benefited from more effective marketing
- Ernest Jones successfully tested enhanced store design
Terry Burman, Group Chief Executive, commented: "2007/08 was a very demanding
year for the Group, with a particularly difficult fourth quarter. While the US
business saw an unprecedented weakening in sales over Christmas, and faced the
impact of commodity cost increases, it continued to be a leader in setting
industry operating standards. In a tough UK retail marketplace, like for like
sales were ahead and operating margins, cash flow and return on capital remained
strong.
In consideration of the uncertain economic environment, actions have been
identified to drive sales, protect gross margin, and tightly control costs. The
Group's demanding investment hurdle rate continues to be applied, and as a
result US net store space growth is expected to be lower at about 5% in 2008/09.
Since the start of 2008/09, the Group has experienced a low single digit decline
in like for like sales, with the US down about 4%, having had some benefit from
better weather over Valentine's Day. Early results have been encouraging from
the price increases implemented after Valentine's Day in the US. UK like for
like sales were up mid single digits. However, the outlook remains very
challenging on both sides of the Atlantic.
As previously announced, the Board has undertaken a review of the most
appropriate domicile and stock market listing for the Company. Following
consultation with major investors, the Board believes that shareholders would,
on balance, approve a move of the primary listing of Signet to the US.
Accordingly the Board continues to take steps that would facilitate such a
change. However, in light of market conditions, the determination and timing of
any such proposal remains uncertain and will continue to be kept under review by
the Board."
Enquiries: Terry Burman, Group Chief Executive +44 (0) 20 7317 9700
Walker Boyd, Group Finance Director +44 (0) 20 7317 9700
Jonathan Glass, Brunswick +44 (0) 20 7404 5959
Wendel Verbeek, Brunswick +44 (0) 20 7404 5959
Signet operated 1,962 speciality retail jewellery stores at 2 February 2008;
these included 1,399 stores in the US, where the Group trades as "Kay Jewelers",
"Jared The Galleria Of Jewelry", and under a number of regional names. At that
date Signet operated 563 stores in the UK, where the Group trades as "H.Samuel",
"Ernest Jones", and "Leslie Davis". Further information on Signet is available
at www.signetgroupplc.com. See also www.kay.com, www.jared.com,
www.hsamuel.co.uk and www.ernestjones.co.uk.
Chairman's Statement
Group performance
The Group continued to make progress in implementing its proven growth strategy
despite the difficult economic environment. While the Group saw a decline in
profits, it still achieved a superior operating performance for the jewellery
sector including a healthy operating margin and Return on Capital Employed
("ROCE"). Key financial results of the year included:
- Sales up by 3.0% to $3,665.3 million;
- Profit before tax down by 16.8% to $333.5 million;
- Basic earnings per share down by 18.2% to 12.6 cents, and
- ROCE of 16.8%.
The Board is pleased to recommend a final dividend of 6.317 cents per share
(2006/07: 6.317 cents) for the year ended 2 February 2008. This represents a
total dividend for the year of 7.277 cents, up by 1.6% (see note 8). During the
year the Group made share repurchases of $29.0 million, completing the programme
announced in July 2006. In total, $152.9 million was distributed to shareholders
during 2007/08. Given the substantial increase in economic and financial sector
uncertainties, the Board will continue to evaluate dividend policy in the light
of the needs of the business taking into consideration the significant
competitive advantages of a strong balance sheet and financial flexibility.
Account will also be taken of the primary stock market listing of the Company.
Group strategy
The Group aims to build long term value through focusing on the customer by
providing a superior merchandise selection in high quality real estate
locations. Effective advertising draws consumers into our stores, where they are
provided with outstanding service. The operating philosophies that help the
Group achieve these aims are:
- excellence in execution;
- test before we invest;
- continuous improvement; and
- disciplined investment.
The Group's strategy to deliver shareholder value is to:
- continue to achieve sector leading performance standards on both sides
of the Atlantic;
- increase store productivity in the US and the UK;
- grow new store space in the US; and
- maintain a strong balance sheet.
While progress was made in most of these areas, store productivity in the US
declined in 2007/08 as a result of the sales performance in the fourth quarter.
A more detailed consideration of these strategies is provided in the Chief
Executive's, US and UK performance reviews.
Group domicile and primary listing
As set out in the trading statement dated 10 January 2008, the Board has
undertaken a review of the most appropriate domicile and stock market listing
for the Company. This review has confirmed that there is a clear rationale for
the primary listing of the Group to be in the US as a significant and growing
majority of its business and assets are in that country. From consultation with
the Company's major investors, the Board believes that Signet's shareholders
would, on balance, support a recommendation from the Board regarding a potential
redomicile of the Company to Bermuda and a move of the primary listing of
Signet's shares to the US. Accordingly the Board continues to take steps that
would facilitate such a change. However, in light of market conditions, the
determination and timing of any such proposal remains uncertain and will
continue to be kept under review by the Board.
Corporate responsibility
During the year further progress was made in developing industry wide
initiatives to achieve improvements in the supply chain, and with regard to
social, ethical and environmental issues. In keeping with the Group's approach
of working with other industry representatives to maintain and improve consumer
confidence in our industry we worked with organisations such as the Council for
Responsible Jewellery Practices ("CRJP"), the World Diamond Council, Jewelers of
America and Jewelers Vigilance Committee to develop programmes to improve the
supply chain. Major accomplishments include:
- implementation of a requirement that jewellery supplied to the Group
should not contain rubies or jade from Burma. Jewelers of America also
introduced the same requirement and advocated that the US government ban
such imports;
- the development of a Code of Practices by the CRJP which includes future
third party monitoring. It is anticipated that during 2008/09 the Code will
be introduced; and
- a better understanding of the Group's impact on the environment and on
identifying ways in which it can improve its performance.
Signet remains a member of the FTSE4Good Index and also contributed in the US,
to the industry charity, Jewelers for Children, St. Judes Children's Research
Hospital and in the UK, to the Princess Royal Trust for Carers.
Current trading
Since the start of 2008/09, the Group has experienced a low single digit decline
in like for like sales, with the US down about 4%, having had some benefit from
better weather over Valentine's Day. Early results have been encouraging from
the price increases in the US implemented after Valentine's Day. UK like for
like sales were up mid single digits. However, the outlook remains very
challenging on both sides of the Atlantic.
People
I would like to thank our staff and management for their hard work and
dedication in a year when the external environment has placed increased
pressures on the business. I would also like to thank Brook Land, who retires as
a director at the 2008 annual general meeting, for his significant contribution.
He has served on the Board for nearly 13 years, including six as senior
independent director. Following his retirement Russell Walls will assume this
role.
In addition, I would like to welcome Lesley Knox, who was appointed as a
non-executive director in January 2008. I am confident that her broad experience
of business and corporate finance will enable her to make a valuable
contribution to the Group.
Chief Executive's Review
Change at
constant Like for
exchange like
rates on a change
2007/08 2006/07 Change 52 week on a 52
52 weeks 53 weeks reported basis(1) week basis
$m $m % % %
Sales 3,665.3 3,559.2 3.0 3.2 (0.7)
Operating profit 351.3 416.2 (15.6) (15.9)
Profit before tax 333.5 400.8 (16.8) (17.4)
Basic earnings per share 12.6c 15.4c (18.2) (18.7)
Operating margin 9.6% 11.7%
ROCE 16.8% 22.8%
(1) See note 11 for reconciliation of impact of exchange rates and
adjustment for 53rd week in 2006/07.
2007/08 was a very demanding year for the Group, with a particularly difficult
fourth quarter. Although execution within the business continued to improve, the
economic environment deteriorated. The speed and extent of the change in trading
conditions during the fourth quarter was unprecedented. As a result there was
very limited time to align the business to reflect the change in market
conditions and therefore the impact on results could not be meaningfully
mitigated.
In the year to 2 February 2008 total sales rose by 3.2% at constant exchange
rates on a 52 week basis (see note 11); the reported increase was 3.0% to
$3,665.3 million (2006/07: $3,559.2 million). Like for like sales declined by
0.7%, the first annual decrease since 1992/93. The average exchange rate for
2007/08 was GBP1/$2.00 (2006/07: GBP1/$1.88).
Operating profit fell by 15.9% at constant exchange rates on a 52 week basis
(see note 11); the reported decrease was 15.6% to $351.3 million (2006/07:
$416.2 million). Operating margin was 9.6% (2006/07: 11.7%). Profit before tax
was down by 17.4% at constant exchange rates on a 52 week basis (see note 11)
and by 16.8% on a reported basis to $333.5 million (2006/07: $400.8 million).
The tax rate was 35.5% (2006/07: 33.6%). Basic earnings per share were 12.6
cents (2006/07: 15.4 cents, the 53rd week contributing 0.1 cents in 2006/07).
ROCE was 16.8% (2006/07: 22.8%).
Net debt at 2 February 2008 was $374.6 million (3 February 2007: $233.2
million). Gearing (net debt to total equity) was 20.7% (3 February 2007: 13.4%).
Given that nearly all stores are leased, a further important measure of gearing
is fixed charge cover, which was 1.8 times in 2007/08 (2006/07: 2.0 times). The
increase in net debt before exchange adjustments was $143.6 million (2006/07:
$86.4 million), reflecting the lower level of profitability, investment in new
store space of $178.9 million (2006/07: $176.7 million) and distribution to
shareholders of $152.9 million (2006/07: $172.1 million).
It is critical to build the long term competitive position of the business while
managing short term pressure on profitability and the balance sheet during
challenging economic periods. A very thorough review of the businesses on both
sides of the Atlantic has been carried out following the difficult 2007
Christmas period. In consideration of the uncertain economic environment a more
cautious approach to the execution of the Group's growth strategy has been
adopted. Reflecting this, management focus is more on implementation and
responding rapidly to changes in the marketplace, with less attention on
developing longer term operational initiatives. As part of this process, actions
have been identified to drive sales, protect gross margin, control costs tightly
and, where appropriate, to realign the Group's cost base and inventory levels to
the changed market conditions.
The Board firmly believes that a strong balance sheet, and financial
flexibility, are competitive advantages. Therefore it has carefully considered
the appropriate working capital levels, investment required to maintain the
quality of the Group's assets and rate of space growth, as well as its
distribution policy to shareholders. A strong balance sheet enables the Group to
continue to invest in the business throughout the economic cycle enhancing
further its strong competitive position within the marketplace.
Investment to reinforce the Group's strategic advantages remain in place, such
as the expansion of Kay and Jared, the development of the rough diamond supply
chain initiative, as well as the Ernest Jones refurbishment programme. Demanding
investment hurdle rates continue to be applied, and as a result US net store
space growth is expected to be about 5% in 2008/09 and 2009/10, which is below
the 8% to 10% per annum long term target range. However, an increased level of
UK store refurbishment in 2008/09 is expected to result in a broadly unchanged
level of Group capital expenditure, of approximately $140 million. The
anticipated reduction in working capital investment, lower tax payments and the
absence of share repurchases are expected to result in a significant reduction
in cash outflow during 2008/09.
US performance review (74% of Group sales)
Like for like
Change on a change on a
2007/08 2006/07 Change 52 week 52 week
52 weeks 53 weeks reported basis(1) basis
$m $m % % %
Sales(2) 2,705.7 2,652.1 2.0 4.1 (1.7)
Operating profit 262.2 326.7 (19.7) (19.6)
Operating margin(2) 9.7% 12.3%
ROCE 14.9% 21.5%
(1) See note 11 for reconciliation of impact of 53rd week in 2006/07.
(2) See Group financial review for tables analysing total sales growth and
movement in operating margin.
In a much more demanding trading environment the consistency of the US
division's management, strategy and execution, as well as the Group's strong
balance sheet were significant competitive advantages. While the US business saw
an unprecedented weakening in sales in the fourth quarter and faced the impact
of commodity cost increases, it continued to be a leader in setting industry
operating standards. A further increase in net new space of 10% was achieved, at
the top end of the target range.
Like for like sales growth slowed in the first nine months of 2007/08 to 2.7%,
with the gift giving events of Valentine's Day and Mother's Day being
disappointing. The very important fourth quarter was particularly difficult with
like for like sales declining by 8.6%, resulting in a full year decline of 1.7%.
Total sales increased by 4.1% on a 52 week basis (see note 11) and by 2.0% as
reported. Operating profit was down by 19.6% on a 52 week basis (see note 11)
and by 19.7% as reported, to $262.2 million (2006/07: $326.7 million). The
operating margin of 9.7% (2006/07: 12.3%; 12.5% on a 52 week basis) reflected
expense deleverage of 190 basis points as a result of the decline in like for
like sales, and the adverse impacts of additional new space (60 basis points)
and change in gross margin (30 basis points). The movement in gross margin
percentage was due to the significantly higher cost of gold and a greater
proportion of sales from Jared, partly offset by supply chain initiatives and
some limited price increases. The bad debt charge of 3.4% of total sales (2006/
07: 2.8%), was at the high end of the range of the last ten years, but was
largely offset by higher income associated with the receivables due to a lower
monthly collection rate. The proportion of sales through the in-house credit
card was 52.6% (2006/07: 51.7%).
ROCE was 14.9% (2006/07: 21.5%), reflecting the lower operating profit and
investment in a 10% increase in space. The proportion of stores under six years
old continued to increase and was 38% in 2007/08 compared to 32% in 2006/07. The
higher proportion of immature stores constrains ROCE in the short term, but
increases operating profit and drives future growth.
The division continued to implement its proven strategy and the performance of
the business against these criteria is set out below:
Strategy: To achieve sector leading performance standards
In 2007/08 the division increased total sales by 4.1% (52 week basis, see note
11), and, despite the comparative weakness of the middle mass market, performed
broadly in line with the total US jewellery market which grew by 4.0% to $64.7
billion in calendar 2007 (2006: $62.2 billion; source: US Department of
Commerce). The Group's share of the speciality jewellery market remained at
8.8%. In 1997/98, the division accounted for 4.8% of speciality jewellery sales
and 7.0% in 2002/03.
Over the five year period ended on 2 February 2008 the division's operating
margin averaged 12.0% and Earnings Before Interest and Tax ("EBIT") / Year End
Total Assets ratio was 14.9%. Jewelers of America reported that the typical
speciality retail jeweller was achieving an average operating margin of 5.4% and
a 7.7% EBIT / Year End Total Assets ratio over the five years to
31 December 2006, being the last year for which figures have been published.
While 2007/08 was difficult, over the last five years the Group's total sales
have increased by 56.4% and operating profit by 25.8%.
Strategy: To improve store productivity
The key driver of the division's comparatively high operating margins and return
on assets is store productivity, which is well above that of the industry as a
whole. While the Group's strategy is to increase store productivity, there was a
decline in 2007/08, reflecting the fall in like for like sales and an increase
in the proportion of immature stores under six years old. Over the last five
years the sales per store for Kay and Jared have increased to $1.71 million from
$1.53 million and to $5.34 million from $4.57 million respectively. The regional
brands achieved sales per store of $1.34 million in 2007/08 with the difference
in performance between Kay and the regional brands continuing to reflect the
benefit of national television advertising.
Strategy: To grow new store space
The Group has strict criteria for investment which have been consistently
applied. Over the last five years net new store space of 10% per annum has
required a total investment of some $700 million in fixed and working capital.
Appraisal reviews show that, in aggregate, investment returns continue to exceed
the Group's targeted 20% internal rate of return over five years. In 2007/08,
net new store space grew by 10% (2006/07: 11%). Over 80% of the growth was
outside traditional malls in 2007/08 and at 2 February 2008 about 40% of store
space was off-mall. The table below sets out the store numbers, net new openings
and the potential number of stores by chain and format:
Net Expected
Store 3 February openings 2 February net openings Long term
numbers 2007 2007/08 2008 2008/09 Potential
________________________________________________________________________________
Kay
Mall 772 17 789 6 850+
Off-mall 52 40 92 19 500+
Outlet 5 5 10 8 50-100
Metropolitan 3 nil 3 nil c.30
________________________________________________________________________________
832 62 894 33 1,430+
Regionals 341 10 351 (14) c.700
Jared 135 19 154 17 c.300
________________________________________________________________________________
Total 1,308 91 1,399 36 2,430+
________________________________________________________________________________
Real estate investment
In 2007/08, fixed capital investment was $111.1 million (2006/07: $101.1
million), including some $60.1 million (2006/07: $57.3 million) related to new
store space. In 2008/09, revisions to sales projections reflecting the
challenging trading conditions, will result in fewer opportunities that meet the
Group's investment criteria. Therefore, in 2008/09, space growth is expected to
be about 5%, net of about 30 store closures (2007/08: 17). Over the longer term
the US division continues to have the potential to almost double its size. This
can be achieved through organic expansion within the existing formats for Kay
and Jared. For the regional brands to achieve this potential would require one
or more acquisitions, and such activity is not expected to occur imminently.
Recent and planned investment in the store portfolio, both fixed and working
capital, is set out below:
Planned
2008/09 2007/08 2006/07 2005/06
$m $m $m $m
_________________________________________________________________________
Total new stores
Fixed capital investment 45 60 57 45
Working capital investment 90 119 119 96
_________________________________________________________________________
Total investment 135 179 176 141
Other store fixed capital
investment 24 28 30 28
_________________________________________________________________________
Total store investment 159 207 206 169
_________________________________________________________________________
Fixed capital expenditure in 2008/09 is planned to decrease to about $90
million, including circa $45 million related to new stores. The investment in
working capital, that is inventory and receivables, associated with gross space
growth amounted to some $119 million in 2007/08 and is expected to be
significantly lower at about $90 million in 2008/09. 62 stores were refurbished
or relocated (2006/07: 59), with some 51 planned for 2008/09.
Operating initiatives in 2008/09
In the current challenging environment the US business has taken action to
control costs tightly. Store staff hours and advertising expenditure have been
realigned, where possible, to reflect current sales expectations. Staff training
and development continues to be a priority, as does investment to enhance
in-store procedures to improve customer service and productivity. Staffing
levels elsewhere have been frozen, despite the growth in store numbers, and a
range of other costs have been cut.
Consumers' financial positions continue to deteriorate which may lead to a
further increase in the bad debt charge, although this is expected to be
somewhat offset by increased income from the credit portfolio. Consequently
credit authorisation criteria continue to be reviewed and outstanding balances
are very closely monitored with prompt action being taken in response to changes
in performance. In addition, further investment in collection systems is taking
place.
The development of exclusive ranges, such as the Leo Diamond, the Peerless
Diamond and the Hearts Desire collection and the expansion of the Le Vian
selection, continue to help differentiate the division in the marketplace and to
increase average transaction value. The 2007/08 year end inventory was above
plan by about $20 million due to the difficult fourth quarter and future
purchases are being strictly controlled. Actions to realign inventory to current
sales levels have been taken and it is anticipated that this will be achieved by
June 2008.
In 2006/07 and 2007/08 substantial increases in gold and platinum costs had an
impact on the entire US jewellery sector, and were largely not passed on to
consumers. After careful consideration and planning it was decided to increase
prices covering a broad merchandise range, including both basic and fashion
products, following Valentine's Day 2008. The Group's pricing strategy is to be
competitive over the long term; however the price changes have resulted in a
departure from this position in the short term, although an increasing number of
speciality jewellers are also increasing prices. While the impact of the price
increases will only be fully apparent in the second quarter of 2008/09, the
early results are encouraging.
Advertising expenditure as a percentage of sales is being realigned to nearer
historic levels, in addition the cadence of promotional activity is being
increased and made more responsive to market conditions. The Kay website will be
further developed and an e-commerce facility on the Jared website is planned to
be introduced in the second half of 2008/09.
UK performance review (26% of Group sales)
Change at Like
constant for like
exchange change
rates on a on a
2007/08 2006/07 Change 52 week 52 week
52 weeks 53 weeks reported basis(1) basis
$m $m % % %
Sales: H.Samuel 513.4 490.3 4.7 (0.1) 1.3
Ernest Jones 438.8 409.1 7.3 2.3 2.9
Other 7.4 7.7 (3.9) (7.5)
_____________________
Total(2) 959.6 907.1 5.8 0.9 2.0
_____________________
Operating profit 105.1 103.4 1.6 (1.3)
Operating margin(2) 11.0% 11.4%
ROCE 29.9% 32.7%
(1) See note 11 for reconciliation of impact of exchange rates and
adjustment for 53rd week in 2006/07.
(2) See Group financial review for tables analysing total sales growth and
movement in operating margin.
In a tough UK retail marketplace like for like sales were ahead of last year and
operating margins, cash flow and ROCE remained strong. The business achieved
further improvements in the key areas of execution, particularly customer
service.
Like for like sales growth was 2.0%, an encouraging performance in an
increasingly challenging marketplace. Growth in the first nine months of 2007/08
was stronger than last year at 4.7%, but became more difficult in the fourth
quarter with like for like sales declining by 1.7%. Total sales increased by
0.9% at constant exchange rates on a 52 week basis (see note 11) and by 5.8% on
a reported basis to $959.6 million (2006/07: $907.1 million).
Operating profit was little changed at constant exchange rates on a 52 week
basis (see note 11); the reported increase was 1.6% to $105.1 million (2006/07:
$103.4 million). Operating margin was down 40 basis points on the prior year
reflecting expense leverage of 40 basis points from the small increase in like
for like sales combined with tight control of costs, an adverse movement in g
ross margin percentage of 60 basis points and the benefit to 2006/07 of the 53rd
week (adverse 20 basis points). The movement in gross margin was primarily
caused by changes in mix due to the strong performance of the watch category,
some impact from commodity costs and an increased proportion of sales from
Ernest Jones. ROCE was 29.9% (2006/07: 32.7%), primarily reflecting the impact
of the 53rd week in 2006/07 and a slight increase in capital employed.
Further progress was made in implementing the division's successful strategy and
its performance against those criteria are set out below:
Strategy: To achieve sector leading performance standards
The total UK jewellery market was unchanged at GBP4.5 billion in calendar 2007
including VAT (source: Office of National Statistics); and the division's market
share was similar to last year at 12.1%. In 2007/08, the division's operating
margin was 11.0% and its EBIT / Year End Total Assets ratio was 21.2%. In the
year to 31 March 2007, the last year for which figures are available, the next
five largest speciality retail jewellers had an average operating margin of 5.7%
and a 6.4% EBIT / Year End Total Assets ratio.
Strategy: To improve store productivity
Store productivity increased in both H.Samuel and Ernest Jones in 2007/08 to
GBP0.72 million from GBP0.70 million and to GBP1.11 million from GBP1.08 million
respectively. This reflected divisional like for like sales growth of 2.0% and,
in H.Samuel, a continuing reduction of the store base to focus on stores in
larger centres that provide an opportunity to achieve a greater ROCE. With
average selling space of about 870 square feet per store, Ernest Jones achieved
the highest sales density of any Signet brand.
Real estate and investment
During 2007/08, 27 stores were refurbished or relocated. At the year end, 282
locations, mostly H.Samuel, traded in the customer oriented format, accounting
for some 50% of the UK division's sales. At 2 February 2008, there were 359
H.Samuel and 204 Ernest Jones branches (3 February 2007: 375 and 206
respectively).
2007/08 2006/07 2005/06
________________________________________________________________________________
H.Samuel stores
Openings 1 - 3
Closures (17) (11) (15)
Year end 359 375 386
________________________________________________________________________________
Ernest Jones stores
Openings - 1 5
Closures (2) (2) (2)
Year end 204 206 207
________________________________________________________________________________
Total stores at year end 563 581 593
________________________________________________________________________________
The level of store capital expenditure during 2007/08 was GBP9 million (2006/07:
GBP8 million) reflecting the phasing of the refurbishment cycle. In 2008/09 it is
planned to roll out up to 49 sites, including new locations, in the enhanced
Ernest Jones store design, which produced very encouraging results when tested
in the second half of 2007/08. In addition, up to a further 25 H.Samuel
locations are expected to begin trading in the more customer oriented format by
Christmas 2008. As a result store capital expenditure is expected to increase to
some GBP25 million in 2008/09. Recent and planned investment in the portfolio is
set out below:
Planned
2008/09 2007/08 2006/07 2005/06
________________________________________________________________________________
Store refurbishments and 69 27 28 78
relocations
New H.Samuel stores 2 1 - 3
New Ernest Jones stores 3 - 1 5
Store fixed capital investment GBP25m GBP9m GBP8m GBP22m
________________________________________________________________________________
Operating initiatives for 2008/09
In the current uncertain environment, the UK business will continue to manage
costs, inventory and gross margin very closely. While the impact of commodity
cost increases has been less than in the US due to the weakness of the dollar,
price increases have been implemented. The successful initiative to drive
footfall by taking advantage of the scale of the business, while maintaining
gross margin, through key volume lines will continue to be developed. The
diamond selection, particularly in exclusive and value ranges, is being
enhanced. Mixed metal ranges are being expanded and new merchandise is being
tested more efficiently. In the watch category, relationships with the leading
agencies continue to be a priority.
Additional initiatives continue to be introduced to raise customer service
standards even further, including extension of the customer satisfaction index
to all sites and enhancements to training materials on product knowledge and
selling skills. New store communication and executional tools are being tested.
Advertising expenditure will be adjusted to reflect the return on investment
being achieved. The "H.Samuel helps you say it better" and "Only at Ernest
Jones" marketing propositions are planned to be developed further and the
e-commerce websites for both brands are expected to be improved.
Group financial review
Dollar reporting
Following the approval of shareholders and the High Court, the redenomination of
the Company's share capital became effective on 5 February 2007. The Company's
functional currency is now US dollars and the Group reports in US dollars.
Sales growth, operating margin and ROCE
The components of the 3.0% increase in Group total sales in 2007/08 are analysed
in the table below:
Components of sales growth US UK Group
% % %
______________________________________________________________________________
Like for like sales on a 52 week basis (1.7) 2.0 (0.7)
Change in net store space 5.8 (1.1) 3.9
Exchange translation - 6.5 1.7
______________________________________________________________________________
Total sales growth on a 52 week basis 4.1 7.4 4.9
Impact of 53rd week in 2006/07 (2.1) (1.6) (1.9)
______________________________________________________________________________
Total sales growth as reported 2.0 5.8 3.0
______________________________________________________________________________
Group operating margin (operating profit to sales ratio) was 9.6% in 2007/08
(2006/07: 11.7%), the factors causing this movement are analysed below:
Components of operating margin movement US UK Group
% % %
______________________________________________________________________________
2006/07 operating margin 12.3 11.4 11.7
Impact of 53rd week in 2006/07 0.2 (0.2) 0.1
______________________________________________________________________________
2006/07 operating margin on 52 week basis 12.5 11.2 11.8
Gross margin (0.3) (0.6) (0.4)
Expense leverage (1.9) 0.4 (1.4)
New store space (0.6) - (0.4)
______________________________________________________________________________
2007/08 operating margin 9.7 11.0 9.6
______________________________________________________________________________
ROCE was 16.8% (2006/07: 22.8%). Capital employed is based on the average of the
monthly balance sheets and at 2 February 2008 included US net receivables,
nearly all of which are in-house credit card debtors, amounting to $840.2
million (3 February 2007: $778.9 million).
Group and financing costs
Group central costs amounted to $16.0 million (2006/07: $13.9 million),
reflecting the impact of exchange translation movements and higher professional
fees. Net financing costs amounted to $17.8 million (2006/07: $15.4 million), t
he increase being primarily due to the share buy back programme commenced in
2006/07 and completed in the first quarter of 2007/08.
Taxation
The charge of $118.3 million (2006/07: $134.8 million) represents an effective
tax rate of 35.5% (2006/07: 33.6%). The rate was lower than indicated in the
third quarter due to the change in mix of profit between the US and UK
businesses and a more favourable resolution of certain prior year tax positions.
It is anticipated that, subject to the outcome of various uncertain tax
positions, the Group's effective tax rate in 2008/09 will be at a similar level
to the reported rate in 2007/08.
Profit for the financial period
Profit for the 52 weeks ended 2 February 2007 was $215.2 million (53 weeks to 3
February 2007: $266.0 million).
Purchase of own shares
During 2007/08 the Group completed a share buy back programme with 12.2 million
shares (2006/07: 30.3 million) purchased for $29.0 million (2006/07: $63.4
million).
Liquidity and capital resources
Operating cash flow before working capital movements was $465.7 million (2006/
07: $519.9 million). Total investment in new space, both fixed and working
capital, during the year was $178.9 million (2006/07: $176.7 million). The total
investment in working capital was $171.0 million (2006/07: $173.5 million), of
which $118.8 million (2006/07: $119.4 million) related to net new space. While
inventory levels were generally tightly controlled, there was an increase of
$96.8 million (2006/07: $118.1 million) primarily reflecting space growth in the
US. The majority of the increase in receivables of $60.7 million (2006/07:
$101.5 million) was due to space growth and a fall in monthly collection rate.
There was a decrease in payables of $13.5 million (2006/07: increase $46.1
million) as the Group took advantage of discounts from suppliers for early
payment.
Cash generated from operations amounted to $294.7 million (2006/07: $346.4
million). Interest of $29.8 million (2006/07: $31.4 million) and tax of $128.5
million (2006/07: $130.1 million) were paid. Net cash flows from operating
activities were $136.4 million (2006/07: $184.9 million).
Group capital expenditure was $140.4 million (2006/07: $124.4 million). The
level of capital expenditure was some 1.2 times (2006/07: 1.3 times) the
depreciation and amortisation charge of $114.1 million (2006/07: $98.4 million).
Equity dividends of $123.9 million (2006/07: $108.7 million) were paid in the
year and the net movement in shares outstanding was an outflow of $23.0 million
(2006/07: outflow $55.7 million) reflecting the completion of the share buy back
programme commenced in 2006/07.
There was an increase in net debt before exchange rate adjustments of $143.6
million (2006/07: $86.4 million). Net debt at 2 February 2008 was $374.6 million
(3 February 2007: $233.2 million) and gearing was 20.7% (3 February 2007:
13.4%).
It is anticipated that in 2008/09 there will be a further increase in the level
of working capital as a result of planned net US store openings and the
expansion of the rough diamond sourcing initiative, however this is expected to
be significantly less than in 2007/08. Capital expenditure is forecast to be at
a similar level to 2007/08 as lower expenditure in the US is balanced by an
increase in the UK. Tax payments will be less reflecting the level of profits
reported in 2007/08. In total, a cash outflow of between $40 million and $80
million is anticipated in 2008/09 before exchange adjustments and changes in
equity and subject to general economic uncertainties.
Pensions
The Group has one defined benefit plan (the "Group Scheme") for UK-based staff,
which was closed to new members in 2004. All other pension arrangements consist
of defined contribution plans. The IAS 19 present value of obligations of the
Group Scheme decreased last year by $4.2 million to $253.7 million and the
market value of the Group Scheme's assets fell by $13.5 million to $248.1
million; as a result the balance sheet at 2 February 2008 reflected a net
pension liability of $4.0 million (3 February 2007: net pension asset of $2.5
million). The cash contribution to the fund in 2007/08 was $7.2 million (2006/
07: $6.8 million) and the Group expects to contribute a similar amount in 2007/
08.
Summary of fourth quarter results (unaudited)
13 weeks 14 weeks 13 weeks
ended ended comparable
2 February 3 February period like for
2008 2007 like change
$m $m %
Sales
UK 384.2 397.6 (1.7)
US 1,000.6 1,077.6 (8.6)
__________________________________________________
1,384.8 1,475.2 (6.7)
__________________________________________________
Operating profit
UK - Trading 105.5 111.6
- Group central costs (3.0) (3.6)
________________________________
102.5 108.0
US 124.4 182.5
________________________________
Total operating profit 226.9 290.5
Net financing costs (4.9) (3.3)
________________________________
Profit before tax 222.0 287.2
Taxation (77.6) (94.4)
________________________________
Profit for the period 144.4 192.8
________________________________
EPS - basic 8.4c 11.2c
- diluted 8.4c 11.1c
The Board of Directors approved this statement of annual results on 9 April
2008.
Investor relations programme details
There will be an analysts' presentation and conference call today at 2.00 p.m.
BST (9.00 a.m. EDT and 6.00 a.m. Pacific Time) and a simultaneous audio and
video webcast at www.signetgroupplc.com. To help ensure the conference call
begins in a timely manner, could all participants please dial in 5 to 10 minutes
prior to the scheduled start time. The call details are:
European dial-in: +44 (0) 20 7806 1963
US dial-in: +1 718 354 1391
European 48hr. replay: +44 (0) 20 7806 1970 Access code: 9456483#
US 48hr. replay: +1 718 354 1112 Access code: 9456483#
First quarter sales
First quarter sales figures are expected to be announced on 8 May 2008.
This release includes statements which are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements, based upon management's beliefs as well as on assumptions made by
and data currently available to management, appear in a number of places
throughout this release and include statements regarding, among other things,
our results of operation, financial condition, liquidity, prospects, growth,
strategies and the industry in which the Group operates. Our use of the words
"expects," "intends," "anticipates," "estimates," "may," "forecast,"
"objective," "plan" or "target," and other similar expressions are intended to
identify forward-looking statements. These forward-looking statements are not
guarantees of future performance and are subject to a number of risks and
uncertainties, including but not limited to general economic conditions, the
merchandising, pricing and inventory policies followed by the Group, the
reputation of the Group, the level of competition in the jewellery sector, the
price and availability of diamonds, gold and other precious metals, seasonality
of the Group's business and financial market risk.
For a discussion of these and other risks and uncertainties which could cause
actual results to differ materially, see the "Risk and Other Factors" section of
the Company's 2006/07 Annual Report on Form 20-F filed with the U.S. Securities
and Exchange Commission on May 4, 2007 and other filings made by the Company
with the Commission. Actual results may differ materially from those anticipated
in such forward-looking statements even if experience or future changes make it
clear that any projected results expressed or implied therein may not be
realised. The Company undertakes no obligation to update or revise any
forward-looking statements to reflect subsequent events or circumstances.
SIGNET GROUP plc
Consolidated income statement
for the 52 weeks ended 2 February 2008
52 weeks 53 weeks
ended ended
2 February 3 February
2008 2007 (1) Notes
________________________________________________________________________________
$m $m
________________________________________________________________________________
Sales 3,665.3 3,559.2 2,11
Cost of sales (3,264.8) (3,092.4)
________________________________________________________________________________
Gross profit 400.5 466.8
Administrative expenses (158.0) (142.1)
Other operating income 108.8 91.5 3
________________________________________________________________________________
Operating profit 351.3 416.2 2,11
Finance income 11.0 18.8 4
Finance expense (28.8) (34.2) 4
________________________________________________________________________________
Profit before tax 333.5 400.8 11
Taxation (118.3) (134.8) 5
________________________________________________________________________________
Profit for the financial
period 215.2 266.0 11
________________________________________________________________________________
Earnings per share - basic 12.6c 15.4c 7,11
- diluted 12.6c 15.3c 7
________________________________________________________________________________
Earnings per ADS - basic 126.3c 154.0c 7
- diluted 126.1c 153.4c 7
________________________________________________________________________________
(1) Comparative period figures have been restated following a change in
presentational currency from UK pounds to US dollars with effect from
5 February 2007.
All of the above relate to continuing activities attributable to equity
holders of the Company.
Consolidated balance sheet
as at 2 February 2008
________________________________________________________________________________
2 February 3 February
2008 2007 (1) Notes
________________________________________________________________________________
$m $m
________________________________________________________________________________
Assets:
Non-current assets
Intangible assets 52.6 46.3
Property, plant and equipment 502.4 484.8
Other receivables 34.8 29.2
Retirement benefit asset - 3.7
Deferred tax assets 19.7 29.0
________________________________________________________________________________
609.5 593.0
________________________________________________________________________________
Current assets
Inventories 1,445.5 1,350.6
Trade and other receivables 927.5 869.1
Cash and cash equivalents 41.7 152.3
________________________________________________________________________________
2,414.7 2,372.0
________________________________________________________________________________
Total assets 3,024.2 2,965.0
________________________________________________________________________________
Liabilities:
Current liabilities
Borrowings due in less than one year (36.3) (5.5)
Trade and other payables (357.5) (392.4)
Deferred income (125.3) (122.7)
Current tax (79.5) (101.7)
________________________________________________________________________________
(598.6) (622.3)
________________________________________________________________________________
Non-current liabilities
Borrowings due in more than one year (380.0) (380.0)
Other payables (85.3) (74.7)
Deferred income (139.0) (132.0)
Provisions (9.6) (10.0)
Retirement benefit obligation (5.6) -
________________________________________________________________________________
(619.5) (596.7)
________________________________________________________________________________
Total liabilities (1,218.1) (1,219.0)
________________________________________________________________________________
Net assets 1,806.1 1,746.0
________________________________________________________________________________
Equity:
Capital and reserves attributable to equity
holders of the Company
Share capital 15.4 14.0
Share premium 140.2 134.7 9
Other reserves 235.2 235.1 9
Retained earnings 1,415.3 1,362.2 9
________________________________________________________________________________
Total equity 1,806.1 1,746.0
________________________________________________________________________________
(1) Comparative period figures have been restated following a change in
presentational currency from UK pounds to US dollars with effect from
5 February 2007.
Consolidated cash flow statement
for the 52 weeks ended 2 February 2008
52 weeks 53 weeks
ended ended
2 February 3 February
2008 2007 (1)
________________________________________________________________________________
$m $m
________________________________________________________________________________
Cash flows from operating activities:
Profit before tax 333.5 400.8
Adjustments for:
Finance income (11.0) (18.8)
Finance expense 28.8 34.2
Depreciation of property, plant and equipment 109.4 96.0
Amortisation of intangible assets 4.7 2.4
Share-based payment expense 0.4 6.7
Other non-cash movements (1.5) (2.2)
Loss on disposal of property, plant and equipment 1.4 0.8
________________________________________________________________________________
Operating cash flows before movements in
working capital 465.7 519.9
Increase in inventories (96.8) (118.1)
Increase in receivables (60.7) (101.5)
(Decrease)/increase in payables (13.5) 46.1
________________________________________________________________________________
Cash generated from operations 294.7 346.4
Interest paid (29.8) (31.4)
Taxation paid (128.5) (130.1)
________________________________________________________________________________
Net cash flows from operating activities 136.4 184.9
________________________________________________________________________________
Investing activities:
Interest received 6.3 16.9
Purchase of property, plant and equipment (129.1) (116.9)
Purchase of intangible assets (11.3) (7.5)
Proceeds from sale of property, plant and equipment 1.0 0.6
________________________________________________________________________________
Net cash flows from investing activities (133.1) (106.9)
________________________________________________________________________________
Financing activities:
Dividends paid (123.9) (108.7)
Proceeds from issue of shares 6.0 7.7
Purchase of own shares (29.0) (63.4)
Increase in short-term borrowings 31.1 7.0
Repayment of long-term borrowings - (251.0)
Receipt of long-term borrowings - 380.0
________________________________________________________________________________
Net cash flows from financing activities (115.8) (28.4)
________________________________________________________________________________
Cash and cash equivalents at beginning of period 152.3 92.9
(Decrease)/increase in cash and cash equivalents (112.5) 49.6
Exchange adjustments 1.9 9.8
________________________________________________________________________________
Cash and cash equivalents at end of period 41.7 152.3
________________________________________________________________________________
Reconciliation of net cash flow to movement in net debt
Net debt at beginning of period (233.2) (174.5)
(Decrease)/increase in cash and cash equivalents (112.5) 49.6
Increase in borrowings (31.1) (136.0)
Exchange adjustments 2.2 27.7
________________________________________________________________________________
Net debt at end of period (374.6) (233.2)
________________________________________________________________________________
Net debt represents cash and cash equivalents and borrowings.
(1) Comparative period figures have been restated following a change in
presentational currency from UK pounds to US dollars with effect from 5 February
2007.
Consolidated statement of recognised income and expense
for the 52 weeks ended 2 February 2008
52 weeks 53 weeks
ended ended
2 February 3 February
2008 2007(1)
________________________________________________________________________________
$m $m
________________________________________________________________________________
Exchange differences on translation of foreign operations (0.1) 57.3
Effective portion of fair value movements on cash
flow hedges 14.1 1.7
Transfer to initial carrying value of inventory from
cash flow hedges (10.2) 1.5
Actuarial (loss)/gain on retirement benefit obligation (15.0) 30.5
Deferred tax on items recognised in equity 3.7 (10.3)
________________________________________________________________________________
Net (expense)/income recognised directly in equity (7.5) 80.7
Profit for the financial period 215.2 266.0
________________________________________________________________________________
Total recognised income & expense attributable to
equity holders of the Company 207.7 346.7
________________________________________________________________________________
(1) Comparative period figures have been restated following a change in
presentational currency from UK pounds to US dollars with effect from
5 February 2007.
Notes to the financial results
for the 52 weeks ended 2 February 2008
1. Basis of preparation
This financial information has been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union ("IFRS"). This
financial information has been prepared on the basis of the accounting policies
set out in the Annual Report & Accounts for the 53 weeks ended 3 February 2007
which are available on the Group's website www.signetgroupplc.com.
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with IFRS, this announcement does not itself contain
sufficient information to comply with IFRS.
These results are presented in US dollars following a change in the Group's
presentational currency from UK pounds to US dollars with effect from 5 February
2007. In addition, on 5 February 2007 the Company redenominated its share
capital into US dollars and will maintain distributable reserves and declare
dividends in US dollars. Financial information for prior periods has been
restated from UK pounds to the new presentational currency, US dollars, in
accordance with IAS 21.
2. Segmental information
2008 2007
________________________________________________________________________________
$m $m
________________________________________________________________________________
Sales by origin and destination
UK, Channel Islands & Republic of Ireland 959.6 907.1
US 2,705.7 2,652.1
________________________________________________________________________________
3,665.3 3,559.2
________________________________________________________________________________
Operating profit
UK, Channel Islands & Republic of Ireland
- Trading 105.1 103.4
- Group function (16.0) (13.9)
________________________________________________________________________________
89.1 89.5
US 262.2 326.7
________________________________________________________________________________
351.3 416.2
________________________________________________________________________________
The Group's results derive from one business segment - the retailing of
jewellery, watches and associated services. The Group is managed as two
geographical operating segments: the US and UK divisions. Both divisions are
managed by executive committees, which report through the Group Chief Executive
to the Group Board. Each divisional executive committee is responsible for
operating decisions within guidelines set by the Group Board.
3. Other operating income
Other operating income comprises interest receivable from the US in-house credit
programme of $108.4 million (2007: $93.3 million) and foreign exchange gains of
$0.4 million (2007: $1.8 million losses).
4. Finance income and expense
2008 2007
________________________________________________________________________________
$m $m
________________________________________________________________________________
Interest income 6.2 16.7
Defined benefit pension scheme - expected return
on scheme assets 18.3 14.7
- interest on pension
liabilities (13.5) (12.6)
________________________________________________________________________________
Finance income 11.0 18.8
Finance expense (28.8) (34.2)
________________________________________________________________________________
Net finance charge (17.8) (15.4)
________________________________________________________________________________
Notes to the financial results
for the 52 weeks ended 2 February 2008
5. Taxation
2008 2007
________________________________________________________________________________
$m $m
________________________________________________________________________________
Current taxation - UK 42.0 30.7
- US 67.5 105.8
Deferred taxation - UK (2.2) (2.8)
- US 11.0 1.1
________________________________________________________________________________
118.3 134.8
________________________________________________________________________________
6. Translation differences
The exchange rates used for the translation of UK pound transactions and
balances in these accounts are as follows:
2008 2007
________________________________________________________________________________
Income statement (average rate) 2.00 1.88
Balance sheet (period end rate) 1.97 1.97
________________________________________________________________________________
7. Earnings per share
2008 2007
________________________________________________________________________________
Earnings attributable to shareholders ($m) 215.2 266.0
________________________________________________________________________________
Basic weighted average number of shares in issue 1,703.8 1,727.6
(million)
Dilutive effect of share options (million) 3.3 6.8
________________________________________________________________________________
Diluted weighted average number of shares in issue
(million) 1,707.1 1,734.4
________________________________________________________________________________
Earnings per share - basic 12.6c 15.4c
- diluted 12.6c 15.3c
________________________________________________________________________________
Earnings per ADS - basic 126.3c 154.0c
- diluted 126.1c 153.4c
________________________________________________________________________________
The number of ordinary shares in issue at 2 February 2008 was 1,705,560,466 (3
February 2007: 1,713,553,809).
8. Dividends
2008 2007
________________________________________________________________________________
$m $m
________________________________________________________________________________
Final dividend paid of 6.317c per share (2007: 2.8875p) 107.6 94.2
Interim dividend paid of 0.96c per share (2007: 0.4434p) 16.3 14.5
________________________________________________________________________________
123.9 108.7
________________________________________________________________________________
During 2007/08, a dividend of 6.317 cents per share was paid on 6 July 2007 in
respect of the final dividend declared for the 53 week period ended 3 February
2007. An interim dividend of 0.96 cents for the 52 week period ended 2 February
2008 was also paid on 9 November 2007. The 2006/07 interim dividend was
translated at the exchange rate on 3 November 2006.
Subject to shareholder approval, a proposed final dividend of 6.317 cents per
share will be paid on 3 July 2008 to those shareholders on the register of
members at close of business on 23 May 2008. This financial information does not
reflect this proposed dividend, which will be treated as an appropriation of
retained earnings in the 52 week period ending 31 January 2009. For shareholders
who wish to receive the proposed final dividend in pounds sterling, the actual
amount will be calculated using the exchange rate as derived from Reuters at
4.00 p.m. on the record date of 23 May 2008.
Under US tax legislation the rate of US federal income tax on dividends received
by individual US shareholders from qualified foreign corporations are subject to
US federal income tax at a reduced rate of 15%. Dividends paid by the Group to
individual US holders of shares or ADSs should qualify for this preferential
dividend treatment. This US tax legislation only applies to individuals subject
to US federal income taxes and therefore the tax position of UK shareholders is
unaffected. Individual US holders of shares and ADSs are urged to consult their
tax advisers regarding the application of this US tax legislation to their
particular circumstances.
Notes to the financial results
for the 52 weeks ended 2 February 2008
9. Share premium and reserves
Other reserves Retained earnings
_____________________ _________________________________________
Purchase
Share Capital Special of own Hedging Translation Retained Total
premium repemption reserves shares reserve reserve reserve(1)
______________________________________________________________________________________________________
$m $m $m $m $m $m $m $m
______________________________________________________________________________________________________
At 28 January 2006 124.8 - 234.8 (15.4) 2.8 (47.2) 1,241.5 1,541.3
Recognised income and
expense:
- profit for the - - - - - - 266.0 266.0
financial period
- cash flow hedges (net) - - - - 2.3 - - 2.3
- translation differences - - - - - 57.3 - 57.3
- actuarial gain (net) - - - - - - 21.1 21.1
Dividends - - - - - - (108.7) (108.7)
Equity-settled
transactions (net) - - - - - - 8.1 8.1
Share options
exercised 8.6 - - 2.1 - - (3.0) 7.7
Purchase of own shares - 0.3 - - - - (63.4) (63.1)
Shares issued to ESOTs 1.3 - - - - - (1.3) -
______________________________________________________________________________________________________
At 3 February 2007 134.7 0.3 234.8 (13.3) 5.1 10.1 1,360.3 1,732.0
Exchange arising on
redenomination of
share capital (1.4) - - - - - - (1.4)
______________________________________________________________________________________________________
133.3 0.3 234.8 (13.3) 5.1 10.1 1,360.3 1,730.6
Recognised income and
expense:
- profit for the
financial period - - - - - - 215.2 215.2
- cash flow hedges (net) - - - - 3.1 - - 3.1
- translation
differences - - - - - (0.1) - (0.1)
- actuarial loss (net) - - - - - - (10.5) (10.5)
Dividends - - - - - - (123.9) (123.9)
Equity-settled
transactions (net) - - - - - - (0.3) (0.3)
Share options exercised 6.5 - - 2.5 - - (3.5) 5.5
Purchase of own shares - 0.1 - - - - (29.0) (28.9)
Shares issued to ESOTs 0.4 - - - - - (0.4) -
______________________________________________________________________________________________________
At 2 February 2008 140.2 0.4 234.8 (10.8) 8.2 10.0 1,407.9 1,790.7
______________________________________________________________________________________________________
(1) The retained reserve includes the unrealised surplus arising from
revaluing freehold and long leasehold properties of $8.5 million
(3 February 2007: $8.5 million).
10. Accounts
The financial information set out above does not constitute the Company's
statutory accounts for the 52 weeks ended 2 February 2008 or the 53 weeks ended
3 February 2007, but is derived from those accounts. Statutory accounts for the
53 weeks ended 3 February 2007 have been delivered to the Registrar of
Companies, whereas those for the 52 weeks ended 2 February 2008 will be
delivered following the Company's annual general meeting. The auditors have
reported under Section 235 of the Companies Act 1985 on those accounts for each
of those periods; their reports were unqualified and did not contain a statement
under Section 237 (2) or (3) of that Act.
Notes to the financial results
for the 52 weeks ended 2 February 2008
11. Impact of constant exchange rates and 53rd week
The Group has historically used constant exchange rates to compare
period-to-period changes in certain financial data. This is referred to as 'at
constant exchange rates' throughout this release. The Group considers this a
useful measure for analysing and explaining changes and trends in the Group's
results. The impact of the re-calculation of sales, operating profit, profit
before tax, profit for the financial period and earnings per share at constant
exchange rates and the impact of the 53rd week in 2006/07, including a
reconciliation to the Group's GAAP results, is analysed below.
2007/08 2006/07 Growth Impact 2006/07 2007/08 Impact 2006/07 2007/08
at of 53rd of
actual week on 52 week 52 week exchange on 52 week 52 week
exchange basis at growth at rate basis at growth at
rates actual actual movement constant constant
exchange exchange exchange exchange
rates rates rates rates
(non-GAAP) (non-GAAP) (non-GAAP) (non-GAAP)
________________________________________________________________________________________________________
$m $m % $m $m % $m $m %
________________________________________________________________________________________________________
Sales by origin
and destination:
UK 959.6 907.1 5.8 (13.2) 893.9 7.4 57.0 950.9 0.9
US 2,705.7 2,652.1 2.0 (52.2) 2,599.9 4.1 - 2,599.9 4.1
________________________________________________________________________________________________________
3,665.3 3,559.2 3.0 (65.4) 3,493.8 4.9 57.0 3,550.8 3.2
________________________________________________________________________________________________________
Operating profit:
UK - Trading 105.1 103.4 1.6 (3.3) 100.1 5.0 6.4 106.5 (1.3)
- Group function (16.0) (13.9) n/a - (13.9) n/a (0.9) (14.8) n/a
________________________________________________________________________________________________________
89.1 89.5 (0.4) (3.3) 86.2 3.4 5.5 91.7 (2.8)
US 262.2 326.7 (19.7) (0.5) 326.2 (19.6) - 326.2 (19.6)
________________________________________________________________________________________________________
351.3 416.2 (15.6) (3.8) 412.4 (14.8) 5.5 417.9 (15.9)
________________________________________________________________________________________________________
Profit before tax 333.5 400.8 (16.8) (3.2) 397.6 (16.1) 6.1 403.7 (17.4)
________________________________________________________________________________________________________
Profit for the
financial period 215.2 266.0 (19.1) (2.1) 263.9 (18.4) 4.3 268.2 (19.7)
________________________________________________________________________________________________________
Earnings per share 12.6c 15.4c (18.2) (0.1)c 15.3c (17.5) 0.2c 15.5c (18.7)
________________________________________________________________________________________________________
Notes to the financial results
for the 52 weeks ended 2 February 2008
12. Reconciliation of IFRS to US GAAP
Effect on profit for the financial period of differences between IFRS and US
GAAP
52 weeks 53 weeks
ended ended
2 February 3 February
2008 2007
________________________________________________________________________________
$m $m
________________________________________________________________________________
Profit for the financial period in accordance with IFRS 215.2 266.0
________________________________________________________________________________
Sale and leaseback transactions 1.5 1.5
Pensions (2.8) (4.5)
Share-based payment 3.8 (4.5)
Depreciation of revalued properties 0.2 -
Taxation on reconciling items 1.9 0.2
________________________________________________________________________________
US GAAP adjustments before change in accounting
principle 4.6 (7.3)
Cumulative effect of change in accounting principle - (6.0)
________________________________________________________________________________
Profit attributable to equity holders of the Company
in accordance with US GAAP 219.8 252.7
________________________________________________________________________________
Earnings per share in accordance with US GAAP - basic 12.9c 14.6c
- diluted 12.8c 14.3c
Weighted average number of shares outstanding
(million) - basic 1,703.8 1,727.6
- diluted 1,721.4 1,765.1
________________________________________________________________________________
Effect on funds attributable to equity holders of the Company of differences
between IFRS and US GAAP
2008 2007
________________________________________________________________________________
$m $m
________________________________________________________________________________
Funds attributable to equity holders of the Company in
accordance with IFRS 1,806.1 1,746.0
Goodwill in respect of acquisitions (gross) 876.1 876.1
Accumulated goodwill amortisation (350.7) (350.7)
Sale and leaseback transactions (10.7) (12.2)
Pensions - -
Depreciation of properties (4.7) (4.9)
Revaluation of properties (8.5) (8.5)
Share-based payment (1.5) (21.3)
Derivatives 8.1 -
Taxation on reconciling items 7.0 3.4
________________________________________________________________________________
US GAAP adjustments 515.1 481.9
________________________________________________________________________________
Funds attributable to equity holders of the Company in
accordance with US GAAP 2,321.2 2,227.9
________________________________________________________________________________
Reconciliation of funds attributable to equity holders of the
Company in accordance with US GAAP
Funds attributable to equity holders of the Company at
beginning of period 2,227.9 2,062.9
Adoption of SFAS 123(R) - (5.3)
________________________________________________________________________________
2,227.9 2,057.6
Retained profit attributable to equity holders of the
Company 219.8 252.7
(Purchase)/issue of shares (net) (23.5) (55.7)
Increase in additional paid-in capital 18.5 2.3
Dividends paid (123.9) (108.7)
Other comprehensive income 2.6 39.3
Translation differences (0.2) 71.9
________________________________________________________________________________
2,321.2 2,259.4
Adoption of SFAS 158 - (31.5)
________________________________________________________________________________
Funds attributable to equity holders of the Company at
end of period 2,321.2 2,227.9
________________________________________________________________________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNET GROUP
plc
By: /s/ Walker Boyd
Name: Walker Boyd
Title: Group Finance
Director
Date: April 09, 2008