2nd Feb 2023 11:20
(Alliance News) - JD Sports Fashion PLC on Thursday said it expects to generate GBP1 billion in cash every year over the next five years as it aims for a triple double of double-digit revenue growth, double-digit market share in key regions, and a double-digit operating margin.
Shares in the Lancashire-based Sportswear retailer rose 7.7% to 175.90 pence each in London on Thursday morning.
JD plans capital expenditure of GBP500 million to GBP600 million per year, more than doubled from a gross capital expenditure excluding disposal costs of GBP247.9 million in its last financial year, which ended in January last year. In its financial 2022 report, JD Sports had said it planned for capital expenditure of GBP325 million to GBP375 million for financial year 2023, which ended this past Saturday, at least 31% higher than the year before.
JD Sports said it plans to spend 50% to 60% of capital expenditure on store expansion in underserved markets, opening 250 to 350 new stores annually over the next five years.
Meanwhile, JD Sports aims for cash generation of GBP1 billion per year, as well as double-digit revenue growth, double-digit market share in key regions, and double-digit operating margin.
Chief Executive Officer Regis Schultz said: "Today marks a new, distinct chapter in the growth story of JD as we set our plans to become the leading global sports-fashion powerhouse. Building on our strong existing position and attractive long-term market dynamics, we see significant growth opportunities ahead by expanding JD internationally, notably in North America and Europe. We will also be enhancing our omni-channel retail offering, investing in technology and analytics, and leveraging our long-term strategic brand partnerships, to better serve more customers.
"Our track record of disciplined investment and strong retail execution means that JD is extremely well positioned to capitalise on its material headroom for growth globally and continue delivering value for shareholders."
Back in September, JD Sports said pretax in the six months that ended July 30 profit fell by 18% to GBP298.3 million from GBP364.6 million a year prior, but explained the fall in profit was due to the previous year experiencing a one-off benefit in the US from government stimulus. Revenue rose 14% to GBP4.42 billion from GBP3.89 billion.
By Tom Budszus, Alliance News reporter
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