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GUS
has completed another successful year. We have delivered a strong financial
performance, while making further significant operational and strategic
progress.
Strong financial performance
Despite difficult trading conditions in some of our
markets, sales from continuing businesses increased by 10% in the year
to March 2002. Profit before amortisation of goodwill, exceptional items
and taxation from continuing businesses grew by 17% in the year, or 20%
if restructuring costs of £12m are excluded. This was achieved despite
significant revenue investment in areas such as the Argos store card and
new products at Experian, which will underpin future profits growth.
Argos, Experian and Burberry all reported record profits. Argos in particular
had an excellent year, with like-for-like sales growth of 13%. Since the
acquisition of Argos in April 1998, we have increased sales by over £1bn
to £2.8bn and operating profit by over £80m to £204m.
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Sales
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Profit
before taxation |
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2002 |
2001 |
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2002 |
2001 |
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12 months to 31 March |
£m |
£m |
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£m |
£m |
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Experian |
1,092 |
1,018 |
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229.1 |
216.6 |
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Argos Retail Group |
4,629 |
4,250 |
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254.7 |
212.1 |
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Reality |
471 |
476 |
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0.5 |
5.1 |
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Burberry |
499 |
425 |
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90.3 |
69.5 |
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Other |
154 |
265 |
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44.0 |
57.8 |
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Inter-divisional turnover |
(387) |
(393) |
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– |
– |
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Total |
6,457 |
6,041 |
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618.6 |
561.1 |
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Net interest |
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(66.5) |
(74.3) |
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Profit before amortisation of goodwill,
exceptional items and taxation |
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552.1 |
486.8 |
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Exceptional items |
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(72.6) |
(84.7) |
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Amortisation of goodwill |
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(99.4) |
(92.3) |
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Profit before taxation |
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380.1 |
309.8 |
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EPS before amortisation of goodwill
and exceptional items |
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41.7p |
37.2p |
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Reported EPS |
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25.7p |
20.3p |
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Operational progress
GUS has invested heavily during the year across its
main businesses. Group capital expenditure was £322m, up from £268m in
2001. For the coming year, we expect to spend about £400m. Significant
projects include major warehouses for Argos and flagship stores for Burberry.
We also expect an additional working capital investment in 2003 of up
to £100m in the Argos store card and personal loan books. These projects
are expected to provide returns in excess of our cost of capital.
There has been further strengthening of the management teams across GUS.
Nearly all the Experian North America senior team have been appointed
in the last two years and Tom O’Neill joined Burberry as President in
November 2001.
Strategic progress
All the main businesses within GUS now have clear
strategies for growth. We continue to reposition the Group to focus on
these activities because of the size of the opportunities available and
because of our market-leading positions. During the year, we have disposed
of more noncore businesses, such as the Swiss home shopping business and
UK stationery and printing activities, while continuing to run down our
property and car financing operations.
We have also made some small, targeted acquisitions during the year, particularly
in Experian in areas such as e-mail distribution and German account processing.
After the yearend, we acquired ConsumerInfo.com, the leading supplier
of on-line credit reports and scores to consumers in the US, for $130m.
In the coming year, Experian North America is looking to drive growth
by buying in, wherever possible, its affiliated credit bureaux.
Since the year-end, we have confirmed our plans to pursue a partial IPO
of Burberry, subject to market conditions, as a further step towards providing
greater strategic focus within GUS and to establish an independent market
value for Burberry.
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