Jeweller Signet delivered another impressive performance, thanks to surging sales at its two main US chains, Kay and Jared, and a return to UK growth. And while there was an apparent trading slowdown in February, management remains confident that ongoing US economic recovery, and a strong line-up of new products, will underpin another year of growth.
The US business, which generates 81 per cent of Signet's sales, saw same store sales climbed 11.1 per cent, driven by the roll-out of new bridal products and revamped watch ranges in its main Kay and Jared chains. US operating profits climbed 40 per cent to $478m (£303m), despite hefty increases in marketing expenditure and rising commodity costs, which were offset by price increases and higher volumes.
Another 45 US stores are planned this year as part of a $100m store investment programme that will also see 110 major store refurbishments. That will include the roll-out of a new design for its Ernest Jones stores and management reiterated their commitment to the UK market, despite tough trading conditions which saw like-for-like sales there slip 3.1 per cent in February – a faster rate of decline than a year earlier.
Broker Investec Securities expects pre-tax profit of $545m for end-January 2013, giving EPS of 402¢.
SIGNET JEWELERS (SIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,140p | MARKET VALUE: | £2.73bn | |
| TOUCH: | 3,127-3,144p | 12-MONTH HIGH: | 3,205p | LOW: 1,897p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 2,623¢ | NET CASH: | $487m | |
| Year to 29 Jan | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 3.67 | 336 | 258 | 143 |
| 2009 | 3.34 | -327 | -462 | 145 |
| 2010 | 3.27 | 230 | 184 | nil |
| 2011 | 3.44 | 300 | 234 | nil |
| 2012 | 3.75 | 502 | 376 | 20.0 |
| % change | +9 | +67 | +61 | - |
Ex-div: 25 Apr Payment: 29 May £1=$1.58 | ||||
