JJB confirms plan to raise another £65m

RETAILER JJB Sports revealed details of its latest cash-call as it unveiled plans to raise £65m through a shares placing at 40p per share.

The Wigan company – which staved off administration last month by persuading landlords to approve a second CVA in as many years – said after expenses it would be left with £60m to continue its turnaround plan.

JJB said its firm placing and placing and open involved the issue of 162.5 million new ordinary shares and had been supported by its major investors Harris Associates, Crystal Amber, Invesco Asset Management and Bill & Melinda Gates Foundation Trust.

The company said the funding would give it:  “greater operational flexibility” and allow it to reduce its reliance on the availability of supplier credit.

After completing this latest round of restructuring and refinancing, later this month, JJB said it expects its shares to move to the AIM market on April 28.

JJB chairman Mike McTighe said:””After the approval of our CVA proposals by creditors and shareholders in March, I am delighted that we are today confirming the details of this capital raising with the support of our four largest shareholders.

“Together with the implementation of the CVA and continued availability of our banking facilities with BoS, this fundraising will mark the end of our financial restructuring process.

“Once complete, it will allow the company to press on with the next stage of implementing its revised business plan and allow management to focus solely on the turnaround of the group’s retail business.”

Current trading at JJB remains difficult. The company said like-for-like  revenue, excluding VAT,  from March 14 to April 3 was down 13.6% than the equivalent period last year.

For the same period, overall gross margin, which the firm said was “was significantly affected” by a  discount trading strategy in stores to be closed following approval of the CVA , was 30.9% compared to 43.6% in the the same period last year.