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JD profits up 28pc
Retailer sees positive results growth, but remains ‘extremely cautious’ for the future
JD Sports saw its results for the year to January 29 jump, but said it remains ‘extremely cautious’ in its outlook for the future.
Revenue grew 15 per cent to £883.7m, with profit before tax up 28 per cent to £78.6m. Operating profit rose 19 per cent to £79.9m.
Highlights for JD Sports over the course of the year included the acquisition of the Sonneti, Chilli Pepper and Nanny State brands for a total consideration of £2.1m, as well as French retailer Chausport. This strategy has been continued since the year-end with the acquisitions of Irish retailer Champion Sports and the Fenchurch brand. After the year-end it also acquired 80 per cent of Kukri Sports, which provides a bespoke teamwear offering across a wide range of sports in a number of countries, and was rumoured to be interested in taking over rival JJB Sports.
Total revenue from its sports stores increased by eight per cent during the period to £667.2m. The programme of store development continued, JD Sports said, with 28 store openings and 24 refurbishments or conversions. These include the opening of its first three JD Sports stores in France, five new Chausport stores, two new Size? stores and three new JD Sports stores in airport locations. It has also opened a JD Sports store at Liverpool Street train station, its first in this type of location, which, if successful, could be replicated in other major stations.
However, its current trading and outlook statement saw it erring on the side of caution. The statement read: "Following successive years of record results for the Group, the retail environment has recently been significantly impacted by adverse fiscal changes in addition to the multiple current economic pressures. Specifically, the increase in VAT for the year to January 28, 2012 means that the same level of gross takings will produce a contribution of approximately £16m less than the previous year. Simultaneously, but quite separately, we anticipate a reduction of real expenditure levels by consumers at a time when product costs, particularly imported goods, are increasing at a material rate."
JD Sports’ executive chairman Peter Cowgill said: "The year ended January 29 has been the seventh successive year of good progress in revenue and profitability for the Group. Such sustained performance continues to reflect the strength and uniqueness of our brand and fascia offers as well as the strength of our management teams. Our very strong cash position has also allowed us to continue to invest in brands, our store portfolios and new businesses during the year and since the year end.
"Following successive years of record results for the Group, the retail environment has recently been significantly impacted by adverse fiscal changes in addition to the multiple current economic pressures.
“Our core business already possesses very strong sales densities and margins, being the result of continual growth in both measures for several years. Against that background, therefore, it is inevitable that the Board is extremely cautious in its outlook, particularly when the profits achieved for the year to January 29 are effectively rebased purely as a result of the impact of increased VAT.
"Management remain highly focused on all avenues of revenue growth, margin protection and cost control available to us to endeavour to deliver the optimum outturn, minimise the impact of the factors above, and with a strong balance sheet and dominant market position in our core business, we expect to be able to deliver operational and financial progress for the Group over the long term."
