JD lifts dividend as profits dip in tough year

JD Sports Fashion, which owns 500 sports and fashion stores in the UK and Europe, hiked its dividend despite a £3.6m fall in underlying profits to £16m.

Boosted by acquisitions revenue at the Bury-based company rose 14.6% to £439.8m. Bottom line profits in the 26 weeks to July 30 were swollen by around £4m thanks to one-off exceptional items and came in at £20.1m.

The company raised its interim dividend by 7.9% to 4.1p. In the period under review it bought businesses in Ireland and Spain and invested £12.4m on a new warehouse in Rochdale.

JD which was one of the retailers worst affected by the riots and looting this summer said it had lost £700,000 worth of stock from 16 stores, of which six were in London. Despite some dispruption the retailer said it would not impact its full-year figures.

Like-for-like sales in the last seven weeks are ahead of last year – an undoubted boost ahead of the key Christmas trading period.

Finance director Brian Small told TheBusinessDesk.com that the results were creditable in a challenging market place.

“We said in April it would be a tough year, and maybe it has been even harder than people thought. We have got a very experienced team at JD and we’re making the most of the conditions. We have got an offer that works and that appeals to our consumer.”

JD said its gross margin performance of 48% across its sports, fashion and distribution divisions was pleasing in the circumstances.

Sales grew in all geographic locations – with UK rising from £342.5m to £364.9m, Europe – boosted by acquisitions in Spain and Ireland – rising from £26.7m to £53.2m, while sales in the rest of the world rose from £14.5m to £21.5m.

Peter Cowgill, executive chairman, said the group was looking for more acquisitions and the full year result is “very dependent” on December and January’s trading performance.

He said: “We continue to look for appropriate acquisition opportunities which can deliver additional sources of future earnings growth principally in overseas sports retail but also to compliment our core retail fascias.

“The board again believes that the Group is well positioned for future growth across its markets and trading is in line with its expectations.”