JD continues to sparkle amid retail gloom
RETAIL chain JD Sports Fashion continued to defy the odds with another record set of results today as profits rose 9% to £32.8m.
The Bury firm’s profit haul would have been higher still without exceptional items of £16.3m, which included a £6.1m hit on its 9.9% strategic investment in troubled Wigan-based rival JJB Sports.
JD bought the JJB stake at 32.25p a share last November, but by the year end its shares had slumped to 8p. Like other investors JD will be asked to vote in favour of JJB’s turnaround plan, which includes a Company Voluntary Arrangement, deal later this month.
Finance director Brian Small said JD “was not minded to vote down the proposal” . “It would be like turkeys voting for Christmas” he added.
JD Sports Fashion operates 345 sports shops, mostly operating under the JD Sports name and a further 92 fashion stores, trading as Bank or Scotts.
The company said it planned to make Bank a national chain, and would open 20 new stores a year over the next five years, at an approximate cost of £35 to £40m.
In the year to January 31 revenue jumped 13% from £592m to £670m. Stripping-out exceptional items the company would have seen double-digit growth in profits to £53.6m, up 24%.
In line with the company’s excellent performance a final dividend of 8.5p was declared, up 48% on last year, taking the total for the year to 12p per share, up 41%.
Executive chairman Peter Cowgill said: “The year ended 31 January 2009 has been the fifth successive year of good progress in revenue and profitability for the group.”
Against a tough retail backdrop and the wider recession, trading in the nine weeks to April 4 has been “encouraging” he said, with like-for-like sales up 0.3%.
Mr Cowgill added: “The sports fascias’ strong performance in recent years with regards to like-for-like sales and gross margins means that further improvement in these areas is increasingly challenging.
“Nevertheless the new year has started satisfactorily and we have a well differentiated proposition. The board remains focused on continuing to deliver operational and financial progress for the group.”
Asked about consumer confidence Mr Small said: “We’ve not seen anything since last autumn that has sent alarm bells ringing. We were concerned about Christmas until the death, and then in mid-December everyone went on a spending spree and since then we have found spending fairly consistent.”
