Chairman's Statement

Annual Review

I am pleased to report that notwithstanding the £1,311,000 exceptional one off impact on Group profitability, an inevitable result of the Board’s decision to withdraw from Department Store trading on the UK mainland, pre-tax profits at Group level achieved a total of £16,828,000 (2004: £16,457,000).

In the face of increasing competition and a tougher consumer spending climate, The Perfume Shop once again demonstrated its resilience by delivering sales 17% ahead of last year representing a like for like gain of 6%. A further 16 branches have been added, taking the total to 114. We continue our expansion plans in both the UK and Eire and in addition Australia, where we see attractive opportunities ahead.

The exit from the UK Department Stores was handled and executed efficiently and effectively. A trading profit contribution of £2,948,000 from Joplings reflects an excellent contribution from the Team in their final year of Group ownership. At de Gruchy a pick up in sales in the second half year ensured a modest increase in profit to £1,665,000 (2004: £1,645,000) against a sluggish local background, a reminder of the potential in this business given kinder trading winds on the Island of Jersey.

Recommended cash offer and proposed final dividend

As separately announced, the Directors are recommending a cash offer for the Company of 197 pence per share. The Offer incorporates the proposed final dividend of 4.0 pence per share and, if the Offer becomes or is declared unconditional in all respects, this final dividend will not be paid. However, in the event that the Offer lapses, the Directors intend to recommend a final dividend of 4.0 pence per share in respect of the year ended 26 March 2005. This dividend would be subject to the approval of shareholders at this year’s annual general meeting and would be paid shortly after that meeting. The Board would announce the record date for this dividend once it were known that the dividend were payable.

The Board intends to delay convening the annual general meeting for this year until the outcome of the Offer is known. It is currently anticipated that, if the Offer was to lapse, the meeting would be held in October 2005.

BRIAN O'CALLAGHAN
Chairman

Back to top