The owner of H Samuel and Ernest Jones suffered a £28 million fall in UK profits following the sharpest downturn in trading conditions since 1991.
Signet said its UK business achieved operating profits of £49.1 million in the year to January 28, against the £76.9 million achieved a year earlier. Like-for-like sales fell by 8.2 per cent during the period, but Signet said it had managed to protect its margins while its larger operation in the US benefited from a significantly better retail climate.
Operating profits from the US division - based around Kay Jewelers and Jared The Galleria of Jewelry - rose by 17.3 per cent to £167.1 million, enabling the group to keep overall profits at £200.4 million, a fall of 1.7 per cent on a year earlier.
Signet said the trend for like-for-like sales in the past nine weeks had improved to a decline in the low single digits, although Valentine's Day promotions had resulted in some reduction in its margins.
Chief executive Terry Burman said: "While the UK business has undergone significant changes in recent years there are still many opportunities for further improvement."
Signet ended the financial year with 593 stores in the UK, while it had 1,221 outlets in the US.
Despite the toughest retail conditions in 14 years, average transaction values in the UK increased by five per cent as diamonds accounted for 29 per cent of sales compared with 28 per cent a year earlier.
Signet added that during the past five years average sale values increased by 34 per cent at H Samuel and by 37 per cent at Ernest Jones, with the participation of diamonds in the sales mix increasing to 21 per cent and 38 per cent respectively.
Signet's distribution centre for H Samuel and Ernest Jones is in Birmingham.
The company said it had continued to work on improving customer service, while stores remodelled during the year achieved sales sufficient to justify the investment.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "While Signet does still appear to be moving backwards with regard to its smaller UK business, the more significant US division continues to grow and gain market share."
And Steve Davies, analyst at Numis, said: "News on current trading is pretty encouraging."
Mr Burman said customers were increasingly looking for keen prices and the group had introduced some "value" items to kickstart sales over Valentine's Day. The top seller was a heart-shaped necklace priced at £50.
Signet's 1,221-strong US store division now had a leading market share with 8.2 per cent compared with second placed Zale on about 7.8 per cent.
In Britain, market share was about 17 per cent and Mr Burman said Signet had performed at least in line with peers through a challenging period of low consumer demand. ..SUPL: