A HEALTHY ACTIVITY
JD Sports jumps over the hurdles to enjoy an ‘exceptional’ 12 months
JD SPORTS brushed off Brexit-linked inflation and reported a record set of results after what the group described as an “exceptional year”.
The sports fashion chain pointed to further growth despite the plunge in the pound forcing up prices.
Pre-tax profits at the chain rose by 81 per cent to £238m in the year to January 28 and revenue rose 31 per cent to £2.3bn.
Like-for-like sales rose 10 per cent over the period and executive chairman Peter Cowgill said that in spite of rising inflation linked to the collapse in the pound, the firm is well placed for growth.
“Whilst we must recognise that there are external influences which may impact the latter part of the year, notably inflationary pressures arising from Brexit, the board remains confident in the robustness of the JD proposition and believes that the group is well positioned for further profitable growth,” he said.
The pound’s demise has ramped up costs for British businesses, many of which are having to raise prices for consumers as a result.
The group added that while the UK’s vote to leave the European Union means there will be “some uncertainties for the immediately foreseeable future”, its international expansion will have a “clear strategic focus”.
Analyst George Mensah at Shore Capital said: “JD Sports Fashion has delivered a strong financial performance for full year ending January 28, materially outperforming our own expectations. The business also delivered strong profit growth with reported profit before tax of £238.4m, comfortably ahead of our estimate of £225.3m.”
The strong revenue growth was underpinned by a third consecutive year of double digit likefor-like growth in the core Sports Fashion fascia.
JD also flagged that its Blacks and Millets brands delivered positive results for the first time.
Mr Mensah said: “JD also saw a profitable out-turn in its outdoors division for the first time, generating an operating profit of £1.2m.
“This turnaround has been attributed to lower markdown levels, a more simplified operational management structure and an improved camping proposition, although Go Outdoors did not have a material impact on the performance.
“The Go Outdoors acquisition remains under review by the CMA, thus integration is yet to begin as JD are obliged to operate the business separately from its other outdoors formats.”
JD Sports opened 54 stores across Europe last year and opened a further two stores in Malaysia.
The first JD store in Australia is due to open shortly.
The business finished the period with a net cash position of £213.6m, after a year of significant mergers & acquisitions activity as £138m of cash was invested in acquisitions and the estate swelled to 1,050 stores.
An extension on the warehouse is also due to begin shortly, with handover targeted for spring 2018.
JD saw a profitable outturn in its outdoors division for first time. George Mensah, analyst at Shore Capital