GUS to demerge business this year

GUS plans to demerge Argos Retail Group and financial business Experian in December of this year.

Chief executive John Peace has kept the timing of the spin-off a secret, however banking sources have told the Financial Times that the company's financial advisers are aiming for a December deadline. GUS declined to comment.

If December is indeed planned for the demerger, the decision will have been a recent one, as finance director David Tyler said last October that he did not know if the businesses would be spun off this year.

Credit and financial services business Experian has been valued at £4.6 billion by analysts, while Argos Retail Group - which includes the Argos and Homebase chains - is valued at approximately £3.6 billion.

Despite a difficult market, ARG performed reasonably well over the holiday period, generating flat sales in the 14 weeks ended 7 January, as opposed to a 3 percent drop in the second quarter. Meanwhile, Homebase sales slid 3 percent during the same period.

Last May, Peace announced his intention to separate Experian and ARG from the business. In December he spun-off the company's 66 percent stake in luxury goods company Burberry.

How the demerger of ARG and Experian will be structured is not yet certain. According to the FT, it is likely that both ARG and Experian will remain listed in the UK, with ARG continuing under the banner of GUS.

www.gus.co.uk
27 February 2006

GUS Q1 sales drop

British retailconcern GUS reported a decline in first quarter underlying sales at its Homebase DIY and Argos general stores, citing a continued challenging market. It reported that its Experian financial services division, on the other hand, was enjoying a strong performance and said that the demerger of its 66 per cent stake in luxury fashion brand Burberry would take place in December.

As a result of the series of interest rate hikes and declining house prices, consumers have become cautious and have tightened the purse strings, causing the necessary problems for retailers. As a low-cost store, Argos is performing better than many other retailers. With like-for-like sales down 4 per cent for the quarter and down 2 per cent down at Homebase, analyst
Richard Ratner at Seymour Pierce maintained his 'buy' recommendation for GUS. "Those numer are absolutely fine - we remain a buyer. Experian is very good and both Argos and Homebase are better than the competition," he told the FT.

GUS said: "In the first quarter of the financial year, the non-food, non-clothing market in the UK continued to decline ona like-for-like basis. Argos and Homebase cannot be immune from this downturn in demand or from the higher cost inflation that retailers are facing."

With the regards to Argos, the group said: "Compared to the same period last year, there were good performances from consumer electronics, white goods and toys, while housewares, garden ranges and jewellery were difficult." It added that Internet sales had increased by 24 per cent.

Meanwhile, Homebase sale volumes of tiles, flooring, kitchens and home furniture were strong, but garden furniture sold dismally. Experian's first quarter sales jumped 27 per cent, with organic growth accounting for 13 per cent and contributions from acquisitions making up 14 per cent. The company has not revealed when it will sell Experian to focus on its UK retail business.

www.gus.co.uk
20 July 2005

GUS to sell Burberry

The owner of catalogue retailer Argos, GUS, has announced the sale of luxury goods brand Burberry later this year. It is the first step in breaking the group up. GUS owns a 66 per cent stake in Burberry worth GBP 1 billion, which will be distributed among its existing shareholder who can either keep or sell them.

The company plans on separating the retail division, which includes catalogue retailer Argos and DIY chain Homebase, from its credit card division Experian. GUS did add, however, that it would continue to invest and support both businesses and did not reveal a timetable for the split.

"There is no strategic logic in maintaining ARG (Argos and Homebase), Experian and Burberry within the same group in the long term," said GUS chairman, Victor Blank, in a statement. Analysts have long said that GUS would be worth more to shareholders split into focused individual companies. GUS began strategic reviewing of the company in May last year and said it would review all the options over the next two years, including a possible spin-off of Experian.

The company simultaneously announced pretax profits of GBP910 million for 2004, ended 31 March 2005, up 10 percent from GBP 827 million. It said that it had seen consumer spending slow down in recent months and did not see this trend ending yet.
Overall turnover rose from GBP 7.55 billion in 2003 to GBP 7.79 billion in 2004. Argos contributed three quarters of sales.

GUS will continue to invest in its retail business, despite a slowdown in the sector. It will integrate the 33 shops it acquired when it purchased catalogue retailer Index and will expand the Argos chain over the next four years to more than 750 outlets.

www.gus.co.uk
25 May 2005

GUS Sells More Burberry Shares

GUS, the retail group, has reduced its holding in luxury group Burberry from 77.5 per cent to 67.5 per cent, raising GBP180m in the process.
The proceeds from the sale will be used to pay down debt. But GUS held out the possibility of handing back some of the cash to shareholders. News of the sale sent Burberry shares 5.5 per cent lower to 361p, while GUS shares ended down 7p at 743p.
GUS said it had sold 50 million Burberry shares at 360p each. A further 7.5 million shares have been placed on behalf of GUS by Merrill Lynch. These will either be bought in the market by Merrill Lynch if the share price falls below 360p or by GUS if the price rises above 360p over the coming 30 days.

www.gus.co.uk
20 November 2003

GUS happy with strong FY results

Strong sales at Argos and a better than expected performance from Experian, helped retail and business services group GUS confidently claim that full-year results would be at the top end of expectations.

John Peace, Group Chief Executive of GUS, said: "GUS has completed another successful year, reflecting the strength of our three main businesses. We expect the outcome to be around the top end of market expectations, which will make this the third consecutive year of solid profit growth for the Group.

Sales at Argos exceeded GBP 3 billion for the first time, while Experian and Burberry have again also grown sales by well over 10%. We look forward with confidence to the current year, while remaining mindful of the potential impact of economic and political uncertainty." At Burberry - GUS retains a 77% stake in Burberry - total sales in the period increased by 15%. Total Retail sales increased by 30%, which were stirred by contributions from newly opened stores and sales gains at existing stores.

Over the full Spring/Summer 2003 season, the company expects Burberry to continue to reach high single digit wholesale volume growth. During the second half, total Wholesale sales increased by 4%, or by 6% on an underlying basis. Experian has performed very well in the second half, the company reported. Its total worldwide sales increased by 15% at constant exchange rates, again showing double-digit growth in both North America and International, as it did in the first half of the year.

With 14% sales growth in the second half, annual sales at Argos (excluding Argos Additions and jungle.com) exceeded GBP 3 billion for the first time. Like-for-like sales were up 7%, with particularly strong trading in January. New stores again performed well, also contributing 7% to sales growth. At 31 March 2003, Argos operated 523 stores, having opened 21 in the second half of the year.

April 17, 2003
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GUS reports 10% sales growth for Q3

GUS plc, the retail and business services group, reported satisfactory results for its third quarter this week. John Peace, Group Chief Executive of GUS, said: “GUS made further good progress, with Experian, Argos and Burberry all growing sales by more than 10%. We look forward with confidence to the remainder of the second half and the coming year, while remaining mindful of the potential impact of economic and political uncertainty.”

Experian's total worldwide sales for the third quarter increased by 12% at constant exchange rates. Argos also continued to trade well in the third quarter. Its sales increased by 14% in total over the same period last year. Like-for-like sales were up 7%, building on 14% like-for-like growth in the Christmas period last year. New stores performed strongly, contributing an additional 7% to sales growth.

Sales at UK Home Shopping for the period were 8% lower than last year. The company said this was a result of slow trading and poor stock availability. Demand from customers was only slightly below last year, GUS said. This availability issue has been addressed for the recently launched Spring/Summer catalogues. The new Spring/Summer catalogue will be launched on January 18th and will offer an increased range (11,600 lines a 25% increase on a year ago). Argos is also initiating a test this month in five of its larger stores in the South West to trial further expansion of its product range. Initially, 4,500 lines will be added to the existing range in a catalogue called Argos Extra.

E-commerce

Sales via the Internet in ARG were GBP 75 million in the third quarter, up by about two-thirds compared to the same period last year. E-commerce now accounts for over 4% of ARG sales.

GUS retains a 77% stake in Burberry. As reported earlier total sales in the period increased by 33%, or by 18% on an underlying basis. Total Retail sales increased by 64%, or by 32% on an underlying basis, driven by existing and new stores. Burberry achieved outstanding growth in the US and UK markets, aided by the successful opening of the New York and London (Knightsbridge) flagship stores.

January 15, 2003
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GUS buys Homebase; profits up 20%

Retail and business services group GUS announced this week it has bought home furnishings retailer Homebase for GBP 900 million. The news was released on the same day that Gus announced a 20% profit increase for the half year-period ended September 30.

Part of the sum paid will be used to repay Homebase’s existing debt. In the year to February 2002, Homebase made an operating profit of GBP 86 million and GUS expects to generate approximately GBP 100 million of operating profit in the current financial year.

GUS said Homebase was a natural add-on to its Argos chain of cut-price high street stores where shoppers browse catalogues rather than shelves, and goods are stacked in the back room. GUS plans to open about 35 Argos stores a year for the next few years (it already has about 500) and five to 10 new Homebase stores, net of closures, in the next three years. Homebase, whose stores are packed with everything from lights to linen, will add a whole new dimension to GUS' sprawling array of products and services.

Profit increase 20%

GUS said its profit before amortisation, exceptional items and taxes rose to GBP 247 million for the six month-period. Sales at Experian, the group's main earner which manages financial information for consumers and businesses, rose by six percent and profits climbed by ten percent during the half year.

November 22, 2002
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GUS to float Burberry by June

Reported sales at Burberry in the second half were 9% above last year and 5% up on an underlying basis. This was despite the impact of September 11 that adversely affected many luxury goods companies. The flotation of 25 per cent of luxury brand Burberry is scheduled for June.

Retail sales in the second half were slightly up on an underlying basis compared to the same period last year, with a resilient performance from the US. Following new store openings in Beverly Hills and Soho, New York during the second half, a further ten new and replacement stores are planned to open in the current financial year. These include flagship stores in New York, Knightsbridge and Barcelona.

With the Spring/Summer order book now substantially delivered, underlying growth of 6% in the second half in Burberry's Wholesale operations was in line with previous indications. The Wholesale order book for Autumn/Winter 2002 to date suggests that sales should be broadly in line with those of a year ago. Within this, sluggish demand from travel-related clients and the Spanish domestic market is being offset by strong demand in the US.

Royalty revenue in the second half was 10% ahead at constant exchange rates, reflecting double-digit volume growth in Japan.

In March 2002, Burberry signed an agreement to acquire its Korean distribution business. It expects to complete this acquisition in July 2002. The initial cost will be about £25m and the deal is expected to add approximately £5m to operating profit in its first full financial year. With this agreement, Burberry has now taken direct control of the distribution of its core products in all key international markets, with the exception of Japan where its renewed licensing arrangements are adding significantly to profits.

"GUS has completed another successful year, with a particularly strong performance from Argos Retail Group. This has been despite difficult trading conditions in some of our markets. We are looking forward to the coming year with confidence."

Experian
Experian's total worldwide sales for the second half increased by 5%.

FARES, the real estate information joint venture, had another strong half, benefiting from the strength of the re-mortgage market. Sales of this associate are not included in Experian's revenues.

Argos Retail Group
Against a background of good consumer demand, Argos' strong performance continued with its Spring/Summer catalogue launched in January. For the second half, sales at Argos, excluding Argos Additions and jungle.com, increased by 17% and by 13% on a like-for-like basis over the same period last year. Sales were particularly strong in consumer electronics, electricals, furniture and toys. Gross margins remained firm.

Reality
Sales to external customers were marginally up in the second half. Core logistics sales to third parties were ahead by over 10%.

16-4-2002
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GUS reveals increase in profits

Retailer GUS Plc reported a slightly bigger-than-expected rise in interim pre-tax profits and said sales were returning to normal. The company sounded alarm bells last month when it revealed that sales at its luxury goods brand Burberry and the US arm of its biggest contributor to profit, information unit Experian, had suffered badly in the aftermath of September 11.

For October the sales of Experian North America in dollar terms were five per cent above those of last year. Although Burberry's retail sales since 30 September are below last year's levels, the trend is improving. Profits were driven by a strong performance from the Argos retail chain of catalogue stores and designer label Burberry, which was still on track for a partial float by June.

GUS reminded investors that its capital spending in the current year will be up to £100m higher than the £268m last year as it restructures the supply chain at Argos, invests in new Burberry stores and builds a new UK data centre for Experian. The stock has outperformed UK retail sector peers over the last two years on the success of Argos and Burberry.

Highlights
- Profit before amortisation of goodwill, exceptional items and taxation up 11%: £206m (2000: £187m)
- Earnings per share before amortisation of goodwill and exceptional items up 10%: 15.5p (2000: 14.1p)
- Dividend up 5% to 6.5p (2000: 6.2p)
- Experian: sales and profits grew in first half, with North America profits unchanged overall despite disruption in September
- Argos Retail Group: sales up 9%; profits up 13%; excellent performance from Argos with 13% like-for-like sales growth
- Reality: further efficiency and service level improvements; continues to win third party contracts
- Burberry: sales up by more than 30%; profits up by more than 50%; more new stores, wholesale accounts and strong growth in Japan

Sir Victor Blank, Chairman of GUS, commented: "The Group's performance in the first half reflects the strengths of our major businesses. Our continued growth is a great credit to the GUS team at all levels, but I would particularly like to pay tribute to our colleagues in the United States, who have recently been working with tremendous courage in very difficult circumstances."

John Peace, Chief Executive of GUS, commented: "GUS has delivered strong results across the Group in this first half, with encouraging progress in trading at Burberry and Experian North America since the 11 September terrorist attacks."

GROUP RESULTS
In the six months to 30 September 2001, sales grew by 8% to £2,857m. Group profit before amortisation of goodwill, exceptional items and taxation was £206.2m, compared to a restated £186.5m in the same period last year. This year's result was before an exceptional charge of £26.0m (2000: £26.1m). This charge covered restructuring costs in Argos Retail Group and Reality (£16.3m), in line with expectations, and a loss on sale of businesses and investments (£9.7m).

The Group's effective tax rate (based on profit before amortisation of goodwill and loss on sale of businesses) was 24.2%. Earnings per share before amortisation of goodwill and exceptional items were 15.5p (2000: 14.1p). The Board has announced an interim dividend of 6.5p (2000: 6.2p).

CHIEF EXECUTIVE'S REVIEW
The first six months of the current financial year have seen further good progress at GUS. Sales rose by 8%, with profit before amortisation, exceptional items and taxation up 11%. All our major businesses increased their operating profit. We continue to reposition our businesses for growth by investment and corporate developments.

Investment
Our 11% growth in profit before tax was after significant revenue investment in our existing businesses, as well as new initiatives such as the Argos store card, Argos Additions and e-commerce related ventures in gusco.com. As previously announced, capital expenditure in the current financial year will be up to £100m higher than in 2001 (£268m). Major projects include the supply chain programme at Argos, a new UK data centre and buildings for Experian and new stores for Burberry. Cash will also be invested in the build-up of the debtor book for the Argos store card, with the loan book estimated to be approximately £100m at March 2002. Management teams at all levels have been further strengthened across the Group, especially at Experian North America and Burberry. Tom O'Neill, previously at LVMH, joined Burberry as President on 1 November 2001. Reporting to Rose Marie Bravo, he will initially have management responsibility for its Asian operations.

Corporate developments
As part of its drive to take a greater share of the value chain, Burberry has secured an agreement to bring much of its Asian licence and distribution arrangements outside Japan fully in-house with effect from 1 January 2002. It remains the Group's intention to arrange a partial IPO for Burberry by June 2002, subject to market conditions. We have continued to dispose of non-core businesses, such as our Swiss home shopping activities and our small UK stationery and printing interests. We have also made further small in-fill acquisitions in Experian to strengthen its product offering. These include companies in e-mail distribution, German account processing and French cheque processing.

Sales performance since 30 September
Given the uncertainty about the impact of the terrorist activity and anthrax problems on the performance of Experian North America and Burberry in particular, we are providing an update to investors on trading since 30 September in these two businesses in these unusual circumstances. For the month of October, the sales of Experian North America in dollar terms were 5% above those of last year (4% excluding acquisitions). We anticipate a further month of progress in November. For Burberry, Wholesale deliveries for Autumn/Winter 2001 were virtually unaffected. With the Spring/Summer 2002 order book now well advanced, orders to date indicate that single digit sales growth overall should be achievable, on top of the strong growth in recent seasons. Although Burberry's retail sales since 30 September are below last year's levels, the trend has shown an improvement since the period from 11 to 30 September.

29-11-2001
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