GUS shocks City with its first profits warning

Great Universal Stores, the mail order giant, stunned investors yesterday when it issued its first profits warning since coming to the stock market in 1964. It blamed lower sales in its home shopping division caused by weaker demand, higher paper costs and the unseasonal weather.

Though the warning was mild, it surprised City analysts who have come to rely on GUS as one of the market's steadiest, if unspectacular performers.

John Richards of NatWest Securities said: "It is only a modest adjustment but it is a shock coming from GUS. The whole idea of GUS is that it is a stock that allows you to sleep at night."

Another analyst said: "It is unprecedented. These things just don't happen with GUS." The shares fell 30p to 687p.

The company warned that market expectations of its profits were too high and that its profits for the year to March would be between pounds 578m and pounds 581m. This was 2 per cent lower than the consensus forecast of pounds 595m.

The company insisted that its first ever trading statement was not a "warning" but a "clarification". Richard Pugh, chairman of the group's home shopping division, said: "It is not any sort of warning. We saw what the forecasts were and felt the market would appreciate us clarifying the position. Some analysts' forecasts had run rather ahead."

He added that, barring unforeseen circumstances, GUS would still report its 48th consecutive year of increased profits when it reports its results in July. Even the lower profits of pounds 578m would be higher than 1995's pounds 560m.

The company said unaudited profits for the year to March 1996 indicated a 3.5 per cent increase in group sales with consumer and corporate finance advances up 5 per cent.

The home shopping business has seen demand affected by a "cautious and selective approach from customers", as well as the unseasonal weather and higher paper and printing costs, which had made the group's catalogues more expensive to produce.

Home shopping sales in the UK would be some 2 per cent lower, though sales in Europe were 5 per cent up.

Other main trading divisions in the group, such as the Burberrys chain, should show a "satisfactory improvement" in profits, the company said. The company has also collected a lower level of VAT. In previous years the company has received interest payments on VAT over-payments.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones