JD Sports’ pre-tax profits fall as margins remain under pressure

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JD Sports’ pre-tax profits fall as margins remain under pressure

By: Jeff James

Listed Under: Top Story

Published: Thursday, April 12, 2012

JD Sports’ pre-tax profits fell 14.2 per cent to £67 million for the year ending January 28, despite revenue rising nearly 20 per cent to just over £1 billion.

“During the period we have invested significantly in brands, businesses and infrastructure to strengthen the platform for future development of the group,” says Peter Cowgill, executive chairman at JD Sports.

“While we expect some improvement in consumer confidence from the forthcoming international sporting events, we remain cautious.

“Margins remain under pressure, as consumers continue to be offer driven.

“While the board recognises that current expansion activity is likely to impact returns in the short term, it remains confident that the group is being positioned to deliver longer term earnings growth and increasing shareholder returns.”

JD, which bought Blacks out of administration for £20 million in January, said that in the three weeks from acquisition to year end the outdoor retailer generated revenues of £5.9 million, but delivered an operating loss of £2.2 million for the period.

Since acquisition JD has closed 81 loss making Blacks stores, leaving a current store base of 215 stores.

Its distribution businesses delivered an operating profit of £1.1 million (2011: £0.2 million), with good performances from Focus, Kukri, Canterbury and Nicholas Deakins offset by investment at Topgrade Wholesale to build Getthelabel.com and ongoing weak performance by KooGa.

Canterbury's global rugby business had an encouraging year with a strong performance, principally in New Zealand and Australia, from sales associated with the Rugby World Cup.

However, after a substantial rise in losses in the US operation to £1.1 million (2011: £0.3 million) and a smaller rise in the losses of the Canterbury European fashionwear business to £0.8 million (2011: £0.6 million) the total operating profit for the Canterbury Group fell to £0.4 million (2011: £1.1 million).

As a result, JD has closed the US business.