Sports stores sparkle for JD as profits surge
A DAZZLING performance by its JD Sports stores helped retailer JD Sports Fashion report strong first half results, but its fashion and outdoor brands remained in turnaround mode.
The Bury-based company said it was expecting to meet full-year profit expectations as it revealed further progress in its European roll-out plan as it took its first steps in Germany and the Netherlands.
Revenue in the 26 weeks to August 3 was up 2% in the period to £567.4m with growth of 5.8% on a like-for-like basis in sales in the UK and Ireland retail fascias.
After a challenging first half in 2012, the group said profits before exceptional items, relating to the closure of the former Blacks head office in Northampton, rocketed 247% to £9.9m from £2.8m a year ago.
Executive chairman Peter Cowgill hailed an “exceptional performance” by the JD Sports brand as operating profits increased by £10.3m to a record £29.2m.
The Sports fascias’ total revenue rose 11.2% during the period to £412.7m with like-for-like sales up by 7.5%.
Mr Cowgill said: “The strong overall result in the first half has been driven by a record performance in our core Sports fascias in the UK. This business continues to provide the group with a very solid platform for group profitability and future cash generation. We are also pleased with the continued evolution of the JD fascia in mainland Europe.
“Elsewhere, the performance of both the fashion and outdoor fascias has been impacted by significant continued reorganisation activity in the period.
“Whilst these reorganisations have had a short term negative impact on the overall group results, we strongly believe that the decisive actions which we have taken were necessary for these businesses to deliver returns in the longer term.”
He said the sports stores had continues to enjoy a strong performance in recent weeks, and although trading in the fashion fascias “continues to be more difficult”, overall, like-for-like sales for the core UK and Ireland sport and fashion fascias in the five week period to September 7 are up by 2.8%.
As part of its plan to improve the performance of the fashion division, which comprises Bank, Scotts and Tessuti fascias, JD has hired former Arcadia and ASOS executive Gwynn Milligan as MD of Bank Fashion.
She is now conducting a full review of the Bank business focusing on strengthening the proposition, JD said.
Despite a rise in sales from £65m to £71m. operating losses in fashion grew from £5.3m to £6.9m. In the outdoor (Blacks and Milletts) division operating losses fell by more than £1m to £8.8m on lower sales of £43m (£52m in 2012.)
From an international perspective the group added to its Irish, French and Spanish presence by acquiring small chains in Germany and Holland.
The Dutch business comprises 15 stores, which are being refitted. In July JD acquired the trade and assets of 10 small stores in Germany. These stores currently trade as Isico Sports with conversion to JD anticipated in 2014.
The group raised its interim dividend from 4.3p per share to 4.45p.
