JD chief defends his bonus as profits soar
THe boss of JD Sports defended his controversial £4.3m bonus as soaring profits sent shares to a record high.
Peter Cowgill said the ‘numbers speak for themselves’ and claimed the row over his payout had been ‘exaggerated’. The 68-year-old received £5m last year, including £4.3m in bonuses, even after a voluntary salary cut of 75pc.
Critics said the executive chairman should not have received the cash after JD received £100m worth of Government support during the Covid-19 crisis.
But Cowgill, pictured, insisted the company’s stunning performance – a £300m rise in profits from even pre-pandemic levels – justified the payout.
He told the Mail: ‘That bonus payment was exaggerated because it had been for 2017 to 2019 and I had deferred it to show leadership from the front, even though it was overdue. Do I think [the reaction] was exaggerated?
‘The profits have gone up by £300m, so I will leave you to draw your own conclusions.
‘I had one LTIP [bonus] in eight years. So how do I feel? A bit hard done by, to be honest. I did not find the institutional shareholders have had any objections.’ His comments came as JD reported half-year sales of £3.9bn.
This helped JD to record-breaking profits of £364.6m, and it predicts an unprecedented full-year haul of £750m. That is up from a previous prediction of £550m.
The update sent shares 9.7pc, or 102p, up to 1151p. That valued it at £11.87bn – more than High Street rivals including next and Marks & Spencer.
However, JD’s massive earnings will raise eyebrows given the decision so far not to return millions of pounds received from the Government during the pandemic.
Bosses insist they will decide whether to hand back furlough cash by the end of the year, with Cowgill claiming several challenges remain, such as a potential winter resurgence of Covid-19 and supply chain problems.
But he said sales and profits in the first half had been ‘extremely encouraging’. JD won big in the pandemic by ramping up capacity at its warehouses to cash in on the switch to online shopping.
And when shops reopened again in April, crowds queued outside.
Tracksuits, trainers and casual sportswear proved highly popular during the pandemic as people spent more time at home.
This pent-up demand caused like-for-like sales in JD’s stores to surge 30pc higher than 2019 during April and May, although this fell again in June and July. It was also boosted by the furlough scheme and business rates relief in the UK, and stimulus cheques worth £1,440 per person in the US where it has expanded through buying Finish Line and DLTR.
That helped sales surge from £2.5bn to £3.9bn in the 26 weeks to July 31, with profits rocketing from £41.5m to £364.6m.
Russ Mould, investment director at AJ Bell, said: ‘What JD has achieved in the last decade or more is remarkable.
‘It has been razor-sharp in its focus on its customers, delivering what they want, when they want it and how they want it.’