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JJB restructuring to take ‘many years’
Restructuring to take three to five years as retail environment remains challenging
JJB Sports has said its restructuring could take up to five years as it reported its financial results for the year to January 30, 2011.
Total revenue in 2010/11 was £362.9m, against £372.5m in 2009/10, although this included like-for-like sales, comprised of sales from operating units that have been trading for over 52 weeks, up 5.9 per cent and a growth in on-going retail revenue of 0.5 per cent.
JJB Sports also highlighted its successful investment in six transformed stores, an improvement in online business and the appointment of a new chairman, chief executive and chief financial officer as positives from the last year.
In the period since the end of January, it also noted it has successfully completed two capital raisings, pushed through its Company Voluntary Arrangement (CVA), transferred its listing to AIM from the main list of the London Stock Exchange, successfully renegotiation a £25m banking facility with Bank of Scotland to May 2014 and commenced implementation of a turnaround business plan.
Mike McTighe, chairman of JJB Sports, said: "Since the period end, a great deal has taken place. We have delivered two further fundraisings and agreed a significant CVA with our landlords that gives the company a real chance of recovery.
“However, this is the beginning of the hard work and not the end. The financial restructuring was completed on schedule by the end of April and since then the operational restructuring has progressed well. Underperforming stores have closed as part of our CVA, and headcount and operating costs have been significantly reduced. Whilst the sales environment remains challenging, Management's prudent controls mean that business performance in the first quarter has met the Board's expectations.
“The fundraising in April also provided us with the funds to refurbish our store portfolio, following the success of last year's trial. A further 150 stores are targeted for refresh or refit in the current year, with 50 targeted for 2012/13.
“The restructuring of JJB will not be easy or quick and will most likely take three to five years. The retail environment is challenging, will remain so for some time and we face intense competition.
“But the work undertaken over the past six months, together with the crucial support of all our stakeholders have given JJB a chance to survive and ultimately to prosper and I look forward to working with our management team to make this happen."
