JD Sports delivers record set of results following acquisition
Bury based JD Sports has delivered a record set of results with revenues soaring by almost 50% in the last year.
According to the firm’s preliminary results revenues rose by 49.2% to £4.7bn.
Gross profit was up by 47.5% and EBITDA rose by more than 26% to £488m.
Operating profit rose by 17% to £361m.
The firm, which is in the process of buying rival FootAsylum for £90m, saw headline profit before tax and exceptional items increased by 15.5% to £355.2m.
Encouraging total like for like sales growth in global Sports Fashion fascias of more than 6% was achieved against a backdrop of closures and upheaval on the high street.
The firm has continued to expand across the globe with 39 new stores across Europe and 34 openings in the Asia Pacific region.
The acquisition of Finish Line in the United States significantly extended the group’s global reach with the trial of the JD brand delivering encouraging early results.
Executive chairman Peter Cowgill said: “I am very pleased to report that the group continues to make excellent progress with group EBITDA (before exceptional items) increasing by a further 27%, being more than £100m, to £488.4m (2018: £385.2m).
“The headline profit before tax and exceptional items increased by a further 16% to £355.2m (2018: £307.4m) and, after delivering a headline profit of £100m for the first time in the year to January 2015, the headline profit has now increased by more than £250m over the subsequent four years, a compound rise in excess of 37% per annum.
The group profit before tax increased by 15% to £339.9m (2018: £294.5m).
“We firmly believe that the elevated and dynamic multibrand multichannel proposition of the core JD fascia, which enjoys the ongoing support of the key international brands, has the necessary agility to continue to exceed consumer expectations and prosper in an increasing number of international markets.
“We believe that our acquisition of the Finish Line business in the United States, the largest market for sport lifestyle footwear and apparel and the home to many of the global sportswear brands, will have positive consequences for our long-term brand engagement whilst significantly extending the Group’s global reach.
“We maintain our belief that Finish Line is capable of delivering improved levels of profitability.
“Given the significance of Easter trading to the overall result of the group and the change in the timing relative to last year, any announcement of like for like sales performance in the year to date would lack precision.
“However, we are pleased with the continued underlying positive performance of the group and are excited by the major developments ahead.”
Russ Mould, investment director at AJ Bell, said: “JD is living proof that parts of the retail sector is alive and well.
“Sales continue to soar as it has found the perfect ingredients to keep the tills ringing.
“It is engaging with customers by offering exclusive products and staying abreast of constantly changing fashion trends. It is also recognising the hard work of staff and giving them interesting career development opportunities thanks to its increasing global scale.
“The acquisition of Finish Line opens the doors to the US market which is the largest market for sport lifestyle footwear and apparel. It also provides an opportunity to export JD’s formula so that it can improve Finish Line’s profits.
“However, you mustn’t forget the big infrastructure issue that hangs over all fast-growth retail businesses. They need to invest heavily in warehouse capacity in order to fulfil orders and this work doesn’t always go smoothly, as the likes of ASOS and others have found out.
“JD is extending its Kingsway warehouse and flags disruption to operations which it says could continue across the first-half of its current financial year.
“This is an area to watch as JD doesn’t want to get into the situation where it cannot meet demand.”