15th Apr 2014 08:35
LONDON (Alliance News) - JD Sports Fashion PLC Tuesday reported a strong trading performance for its last financial year, with an increase in both profits and revenues, driven by a strong performance from its core sports business in the UK and Ireland.
The sports and fashion retailer said that it is ready to take advantage of opportunities in the UK and internationally, and raised its total dividend for the year by 3% to 27.10 pence per share.
For the 52 weeks to February 1, its pretax profit rose 5% to GBP57.9 million, up from GBP55.1 million the prior year, driven by its core sportswear business, including JD and footwear store Size?, and a 5.7% increase in overall group revenues for the year to GBP1.33 billion, up from GBP1.26 billion the prior year, including revenues from its now disposed Canterbury business.
"These businesses [JD and Size?] continue to provide the foundation for profit and expansion in the group. We have also seen very positive developments for our sport fascias in Europe," said Executive Chairman Peter Cowgill in a statement.
Excluding exceptional items, associated with restructuring its outdoor business and fashion businesses, its pretax profit was up 27% to GBP77.0 million.
The retailer beat analyst forecasts for both full-year revenues and pretax profit before exceptional items, having expected an increase to GBP1.28 billion and GBP71.3 million, respectively.
Like-for-like sales for the 52 week period in the UK and Ireland's combined core retail stores, increased by 6.7%, it said.
Although its sports businesses margin were maintained, total gross margin for the year fell from 48.7% to 48.5%, hit by its fashion, and outdoor division, which includes brands Blacks and Millets.
"This reflects the impact of the considerable margin sacrifice in the Blacks and Millets fascias, principally in the first half, as we cleared excess winter stocks and additional markdown activity in our Fashion retail businesses," the company said in a statement.
JD Sports Fashion said that the restructuring and turnaround of its outdoor business is progressing, with combined Blacks and Millets stores hitting breakeven, before exceptional items, in the second-half, compared with a loss the prior year.
"We made substantial operational changes during the year in our Blacks and Millets Outdoor business with the staged closure of the legacy offices and warehouse in Northampton and the relocation to the group's main facilities," said Cowgill.
The retailer said that its fashion business, which includes brands Bank and Scotts, continued to struggle during the year, particular Bank, and increased its operating losses.
"The wider youth fashion sector continues to undergo significant structural change with a significant market shift in favour of own brand and online fast fashion retailers who have tapped into a price competitive environment and a disposable fashion culture," said Cowgill in a statement.
However, Cowgill said that with over 30 million visitors to its Bank stores and over 11 million unique visitors to its website in the year, it believed that it ill be able to generate positive returns for the business in the future.
JD Sports Fashion has continued to develop its international offering, adding new stores in France and Spain, as well as the acquisition of stores in the Netherlands and Germany.
During the year the group acquired a package of stores in the Netherlands from a local fashion retailer which was looking to close one of its fascias. It also acquired the assets of the Isico partnership in Germany which, on acquisition, had 10 small stores primarily in the Berlin area. It said that those stores will be converted to the JD fascia later this year.
JD Sports Fashion shares we up 0.8% at 1,627.10 pence per share Tuesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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