17th Sep 2014 07:03
LONDON (Alliance News) - Sports and fashion chain JD Sports Fashion PLC Wednesday sported an impressive increase in its pretax profit for the first half of its financial year, as strong revenue growth was driven by another strong sales performance from its core UK sportswear business.
The sportswear, outdoor clothing and fashion retailer reported a pretax profit of GBP16.5 million for the six months to August 3, up from only GBP6.1 million a year earlier.
Its profit was driven by a 27% increase in revenue to GBP721.5 million, up from GBP567.4 million last year, after strong sportswear sales continued, and it was given a much-welcome boost by the build up to the football World Cup.
"Our sports operations continue to provide the engine for profit growth and cash generation in the group and will therefore continue to be the primary focus of investment," said Executive Chairman Peter Cowgill in a statement.
Alongside raising its interim dividend to 1.1500 pence per share, up from 1.1125 pence last year, the retailer gave a confident outlook for the remainder of the year, despite tough comparatives, saying it expects to deliver a profit an the top end of market expectations.
"The board recognises the demanding comparatives of the second half of the last financial year...as well as our significant dependence on Christmas trading but following the robust performance of the business in the first half believes that the group is well positioned to deliver results towards the upper end of current market expectations," said Cowgill.
Profit and sales growth in the company in recent years has been driven by its core sportswear business, including JD and its footwear stores Size?, while its fashion and outdoor businesses have been a drag.
The company said that besides its UK and European sports operations, its begun to see positive progress in its outdoor business, following major restructuring. However it said its fashion business, which includes brands Bank and Scott, continues to under perform and increased its trading losses.
"Fashion continues to disappoint, albeit trading more positively in the second quarter. The second half of the year is traditionally stronger for the fashion fascias," said Cowgill.
The retailer has also been expanding overseas, having recently acquired a package of stores in the Netherlands and Germany, while adding to its international offering in France and Spain.
"We have subsequently opened a further two stores in this country [Germany] and have increased our critical mass elsewhere with additional stores in the period in both France and the Netherlands. There will be further openings in all of our international territories in the second half," the company said.
Investec analyst Kate Calvert said the retailer's trading figures for the first half did not disappoint.
"Good numbers were expected post its first quarter trading update, but a 100% increase in first-half pretax profit results has exceeded expectations. This has been driven by Sports, which has had another strong footwear performance, and progress in Europe," said Calvert.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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