24th Jul 2009 11:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN OR INTO THE
UNITED STATES
PRESS RELEASE
JJB Sports plc
AGM Statement
JJB Sports plc ("JJB" or the "Company") is holding its Annual General Meeting at its head office in Wigan today. Lawrence Coppock, the Company's Finance Director, will be providing the following update on current trading and other matters:
Trading update
Retail revenue for the 25 week period to 19 July 2009 was 40.4% lower than the same period last year. On a like for like basis (on operating units that have been trading for over 52 weeks) the total revenue was 26.5% lower, which is in line with the trading announcement made on 21 May 2009. As previously stated, the decrease in like for like sales is almost entirely a result of low stock levels.
The "Summer Sale" ran for just over three weeks from 23 June 2009 to 15 July 2009 during which time we sold £15 million (at cost) of product which no longer fits with our merchandise strategy. This was in line with expectations.
The gross margin achieved during the 25 weeks to 19 July 2009 was 11.2% lower than gross margin in the comparative period last year. The gross margin has been affected by the "Summer Sale" and during this sales period, the margin was 25.0% lower than the margin in the comparative period last year.
The "Summer Sale" has proved highly successful in clearing out old, slow moving stock in readiness for the delivery of new national brands stock. The stock holding in the retail business is 57.7% lower than at the end of the same period last year.
Looking forward, the Company expects a gradual improvement in sales as new stock is received, which will also improve gross margin. However, due to lead times between ordering the product and its delivery of up to 6 months, the Company still does not anticipate any significant improvement in sales until the fourth quarter of 2009.
Turning to the Group's financing arrangements, the Company has fully repaid its short term loan facility of £25 million with Barclays Bank well ahead of its maturity on 31 August 2009. This early repayment has been achieved through the release of deferred consideration from escrow to the Company in connection with the sale of the Group's fitness clubs business to DW Sports (following the successful assignment of the vast majority of the fitness clubs leases).
As announced on 6 July 2009, the Board continues to review a range of possible options to provide additional capital for the Group, including an extension of the maturity date of the Company's working capital facility beyond September 2010, a possible equity capital raising and the disposal of further non-core assets. The Company has recently completed the sale of the Group's remaining helicopter to DW Sports and its joint-venture interest in the "Kooga" brand to JD Sports.
Board composition and appointment of joint corporate broker
As noted in the Company's recently published Annual Report and Accounts for 2009, the Board intends to appoint a new Chief Executive. The Board has commenced this process and will make a further announcement when appropriate. Following the appointment of a new Chief Executive, it is intended that Sir David will become part-time Chairman.
Roger Lane-Smith and David Beever, who have both been non-executive directors of the Company for over nine years, will retire from the Board today. We would like to take this opportunity to wholeheartedly thank them both for their outstanding contribution to the Company during their tenure.
The Board is delighted to announce that John Clare, the former Chief Executive of Currys, Dixons and PC World retailer DSG International, has agreed to join the Board as the Group's senior independent non-executive director with effect from 27 July 2009.
The Board also announces today that it has appointed Numis Securities as its joint corporate broker, alongside Panmure Gordon, with immediate effect.
Further press comment regarding Sir David Jones
Further to the announcement on 7 July 2009, the Board notes the further press comment regarding Sir David.
An unfortunate testament to the success of the Board in saving the Company from near certain administration in the first half of 2009 has been the number of personal attacks on Sir David, in particular in relation to the loan provided by Mike Ashley to Sir David for investment in Advanced Network Technologies. Following publication of details of the loan, that has now been fully repaid by Sir David, the Company believes that a number of factually incorrect and defamatory claims have been made with a view to de-stabilising the Company just as the Board attempts to rebuild the Group's business. These allegations have all been refuted.
In relation to these claims, the Company would like to reiterate its statement in the announcement on 7 July 2009 that "the [loan] arrangement was initiated before Sir David joined the Company as a non-executive director". As evidenced by documents at the time, the loan arrangement was initiated in September 2007. Sir David joined the Board on 1 October 2007. The loan was agreed with Mr Ashley and monies subsequently transferred to Sir David in October 2007.
In spite of the various personal and defamatory attacks, the Board continues to fully support Sir David as Executive Chairman and to focus on the next phase of the Group's restructuring and the turnaround of the Group's sports retail business."
For further information, please contact
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JJB Sports PLC |
01942 221 400 |
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Sir David Jones |
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Richard Manning |
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Maitland |
020 7379 5151 |
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Neil Bennett |
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Richard Farnsworth |
This announcement does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act"), or an exemption from, or in a transaction not subject to, registration. The Company has not registered and does not intend to register any securities under the Securities Act and does not intend to offer any securities to the public in the United States.
Related Shares:
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