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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Jd Sports Fashion Plc | LSE:JD. | London | Ordinary Share | GB00BM8Q5M07 | ORD 0.05P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.75 | -0.63% | 118.40 | 118.35 | 118.50 | 118.95 | 117.75 | 118.60 | 730,811 | 09:00:42 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Sport Gds Stores, Bike Shops | 10.13B | 142.5M | 0.0275 | 42.98 | 6.13B |
From Apr 2019 to Apr 2024
TIDMJD.
RNS Number : 6205J
JD Sports Fashion Plc
13 September 2016
13 September 2016
JD SPORTS FASHION PLC
INTERIM RESULTS
FOR THE TWENTY SIX WEEKS TO 30 JULY 2016
JD Sports Fashion Plc (the "Group"), the leading retailer of sports, fashion and outdoor brands, today announces its Interim Results for the 26 weeks ended 30 July 2016 (comparative figures are shown for the 26 week period ended 1 August 2015).
Hot Features
Premium
2016 2015 % Change
GBP000 GBP000
Revenue 970,565 809,901 +20%
Gross profit % 48.1% 47.4%
Operating profit (before exceptional
items) 77,650 47,578 +63%
Net interest expense (239) (1,012)
Profit before tax and exceptional
items 77,411 46,566 +66%
Exceptional items (see note 3) - (1,858)
-------- --------
Profit before tax 77,411 44,708 +73%
Basic earnings per ordinary share 29.83p 17.62p +69%
Interim dividend payable per ordinary
share 1.25p 1.20p
Net cash at period end (a) 231,848 100,340
(a) Net cash consists of cash and cash equivalents together with other borrowings from bank loans, other loans and finance leases.
Group Highlights
-- Another record result for the half year with Group profit before tax and exceptional items increased by a further 66%
-- Further strong like for like sales growth -- International development continues with: a) Net increase of 20 stores in existing fascias across Europe b) Notable complementary acquisitions in the Netherlands and Portugal in the six month period -- Pleasing progress in Outdoors with continued evolution of the proposition
-- Sales, gross margin and operating profit / (loss) before exceptional items of the two business segments are tabulated below:
Period to 30
July 2016 Sports Fashion Outdoor Total
GBP000 GBP000 GBP000
Gross revenue 897,478 73,087 970,565
Intersegment - - -
revenue
----------------- ---------- ---------
Revenue 897,478 73,087 970,565
----------------- ---------- ---------
Gross margin
% 48.4% 44.2% 48.1%
----------------- ---------- ---------
Operating profit
/ (loss) before
exceptional items 79,902 (2,252) 77,650
----------------- ---------- ---------
Period to 1 August
2015 Sports Fashion Outdoor Total
GBP000 GBP000 GBP000
Gross revenue 741,779 68,260 810,039
Intersegment
revenue (138) - (138)
----------------- ---------- ---------
Revenue 741,641 68,260 809,901
----------------- ---------- ---------
Gross margin
% 47.7% 43.9% 47.4%
----------------- ---------- ---------
Operating profit
/ (loss) before
exceptional items 52,068 (4,490) 47,578
----------------- ---------- ---------
-- Interim dividend increased by 4.2% from 1.20p to 1.25p with cash retained in the Group to maximise the available funding for our ongoing growth opportunities
Peter Cowgill, Executive Chairman, said:
"I am delighted to report that this has been another period of excellent progress for the Group with a record profit before tax and exceptional items of GBP77.4 million. Given that last year's result was in itself a record for our Group then to increase this by a further 66% has exceeded reasonable expectations.
"The favourable trends for athletic inspired footwear and apparel in Europe have continued into this year. We are very much at the centre of this market with our success being a positive consequence of the investments we have made over a number of years to develop the JD retail concept.
"Notwithstanding the demanding comparatives going forward following the strong revenue growth in the previous three years, the positive nature of trading in the second half to date is encouraging."
Enquiries:
JD Sports Fashion Plc Tel: 0161 767 1000
Peter Cowgill, Executive Chairman
Brian Small, Chief Financial Officer
MHP Communications Tel: 0203 128 8100
Andrew Jaques
Barnaby Fry
Gina Bell
Executive Chairman's Statement
Introduction
I am delighted to report that this has been another period of excellent progress for the Group with a record profit before tax and exceptional items of GBP77.4 million (2015: GBP46.6 million). Given that last year's result was in itself a record for our Group then to increase this by a further 66% has exceeded reasonable expectations.
The favourable trends for athletic inspired footwear and apparel in Europe have continued into this year. We are very much at the centre of this market with our success being a positive consequence of the investments we have made over a number of years to develop the JD retail concept. However, we are very conscious that the market for sports and fashion brands can change quickly and so we continue to invest in visual merchandising, retail theatre and creative marketing as we believe that it is JD's market leading standards in these areas that make it an attractive outlet to many brands. Our international expansion is also viewed positively by our key suppliers and garners their support for us in many ways. Although the UK's vote to leave the European Union means that there will be some uncertainties over the next two or three years, we have no doubt that we have the support of our brand partners to continue our expansion in Europe and beyond.
Our Outdoor businesses have made encouraging progress in the first half as we see the positive benefits from actions previously taken to simplify the operational leadership, evolve the offer and drive higher merchandising standards. We are confident that we are creating an Outdoor business that has a proposition which is capable of trading more effectively all year round.
Sports Fashion
Sports Fashion has had an exceptional first half with operating profits (before exceptional items) increasing by a further 53% to GBP79.9 million (2015: GBP52.1 million). Given the tough comparatives provided by the strong performance in the three previous years then we are particularly pleased with a further increase in the like for like store sales in these fascias of approximately 10%. Whilst it would be unreasonable to expect organic growth to continue at these levels, JD does have a very strong base from which to exploit ongoing opportunities both in its core UK market and, increasingly, internationally.
Chausport and Sprinter have also both benefitted from the favourable market trends and have traded positively in the period. Elsewhere, we continue to be pleased with the progress in the premium brand multichannel fashion businesses of Tessuti and Scotts.
There has been further progression in Europe during the period with new stores in several of our existing territories complemented by two multi-store acquisitions. In March, we acquired the trade and store assets of the Aktiesport and Perry Sport retail fascias in the Netherlands from the trustee in bankruptcy of Unlimited Sports Group BV. As is usual in distressed situations, our initial focus has been to stabilise the business with particular emphasis on dealing with a fragmented acquisition stock position, reversing any discontinuity in supply and determining the optimal future store portfolio. Given the acquired stock position and the lead times on ordering product, we would not expect the Perry and Aktie stores to make a positive contribution in the current year. In July, we acquired 12 stores in Portugal which previously traded as The Athlete's Foot. These stores will be converted to JD in the second half.
We anticipate the opening of additional JD stores across Europe in the remainder of the year, including the opening of flagship style stores on Rue Neuve in Brussels and Hohe Strasse in Cologne. Elsewhere, we are also currently refurbishing the flagship Perry Sport store on Kalverstraat in Amsterdam.
Further afield, we have expanded our presence in Malaysia with the acquisition from our JD joint venture partner (Stream Enterprises) of 20 small multi-brand stores trading as Sports Empire, Revolution and The Marathon Shop. Since the period end we have also acquired Next Athleisure in Australia which has 32 stores trading as Glue. This business and its management will provide the platform to open JD in Australia.
The overall gross margin in Sports Fashion is slightly higher than the previous year reflecting the impact of the stronger euro on JD's euro denominated businesses and continuing low markdown levels. The weakening of sterling against the US dollar after the Brexit vote may cause some headwinds on margin in 2017 but we are reasonably well placed to mitigate these.
Outdoor
We have continued to make encouraging progress in Outdoor in the first half, with total operating losses (before exceptional items) reduced to GBP2.3 million (2015: GBP4.5 million). The first half has traditionally been the weaker period for these fascias and so we are pleased that our team's efforts to improve the Spring/Summer proposition have had positive results. We will look to build on this next year.
There has been a small improvement in margin as we start to see the benefits of aligning the merchandising and commercial disciplines of the Outdoor team with the core JD team. More material improvement in margin will be a core deliverable over the longer term and will require brand support, particularly in terms of enhanced levels of product differentiation.
Group Performance
Revenue and Gross Margin
Total Group revenue increased by 20% in the period to GBP970.6 million (2015: GBP809.9 million). Like for like sales for the 26 week period across all Group fascias, including those in Europe, increased by approximately 10% which was another exceptional performance given the growth seen in previous years.
Total gross margin of 48.1% was 0.7% higher than the prior year (2015: 47.4%) with an ongoing focus across all fascias on minimising markdown combined with a positive impact from exchange rate movements in JD's euro denominated business. The overall margin has improved again in Outdoor but progress on this is limited at this stage.
Operating Profit
Operating profit (before exceptional items) for the period has increased by 63% to GBP77.6 million (2015: GBP47.6 million) following an exceptional performance in our Sports Fashion fascias and an encouraging reduction in losses in Outdoor.
There were no exceptional charges in the period (2015: GBP1.9 million).
Cash
Strong cash generation from the ongoing trading in our core retail fascias together has meant that we ended the first half with a net cash balance in excess of GBP200 million providing the Group with a very strong base from which to fund future expansion investment. The period end net cash balance also benefitted from timing related savings on gross capital expenditure (excluding disposals) which has decreased by GBP20.3 million to GBP27.4 million (2015: GBP47.7 million). Our continuing commitment to enhancing our retail proposition, developing our overseas businesses and improving our operational infrastructure means that we expect the gross capital expenditure for the full financial year to be approximately GBP100 million (2016: GBP83.5 million).
Prior to the end of the financial year we anticipate commencing a further major project to increase the operational capacity and flexibility of our existing Kingsway warehouse by extending the mezzanine floors and installing additional automation equipment. We anticipate that this project will cost approximately GBP18 million although the majority of this will be incurred in the financial year to January 2018.
In addition, we will continue to use our cash resources to make selected acquisitions and investments where they benefit our strategic development.
Store Portfolio
During the period, store numbers have moved as follows:
Sports Fashion Fascias
(No. JD JD JD Sub-Total
Stores) UK & Europe Asia Size JD & Size Chausport Sprinter SUR Other Total
ROI
(a) (b) (c)
Period
start 361 103 1 36 501 72 104 - 59 736
New stores 6 15 - 1 22 - 5 - 2 29
Acquired - - - - - - - 187 37 224
Closures (4) (1) - (1) (6) - - (22) (8) (36)
Period
end 363 117 1 36 517 72 109 165 90 953
------ -------- ------ ------- ----------- ------------ ----------- ------ -------- --------
(000
Sq Ft)
Period
start 1,371 222 4 63 1,660 81 973 - 144 2,858
New stores 20 40 - 2 62 - 29 - 6 97
Acquired - - - - - - - 949 114 1,063
Closures (17) (1) - (1) (19) - - (112) (24) (155)
Period
end 1,374 261 4 64 1,703 81 1,002 837 240 3,863
------ -------- ------ ------- ----------- ------------ ----------- ------ -------- --------
(a) Being all stores in all territories with nine stores open in mainland Europe at the period end including Madrid which opened in March 2016
(b) Being the Perry Sport and Aktiesport stores in Sports Unlimited Retail BV
(c) The acquired stores include 12 stores in Portugal currently trading as The Athlete's Foot which are due to be converted to JD in the second half and the 20 multi-brand stores acquired from our joint venture partner in Malaysia
In addition, there were six JD branded Gyms at the period end with new gyms in the period at Rochdale and Washington complementing the existing gyms in Coventry, Hull, Liverpool and Preston. Gyms in Leeds and Wigan are scheduled to open in September.
Outdoor Fascias
(No. Stores) Blacks Millets Tiso Other Total
Period
start 60 99 16 7 182
New stores 1 2 - - 3
Transfers (1) 1 - - -
Closures (1) (3) (1) - (5)
------- -------- ----- ------ ------
Period
end 59 99 15 7 180
------- -------- ----- ------ ------
(000 Sq
Ft)
Period
start 207 205 97 163 672
New stores 4 4 - - 8
Transfers (3) 3 - - -
Closures (5) (11) (3) - (19)
Period
end 203 201 94 163 661
------- -------- ----- ------ ------
Dividends and Earnings per Ordinary Share
The Board proposes paying an interim dividend of 1.25p (2015: 1.20p) per ordinary share, an increase of 4.2%. Given the positive return that we are seeing from our investments in the core JD fascia, we believe it continues to be in the longer term interests of all shareholders to keep dividend growth restrained so as to maximise the available funding for our ongoing growth opportunities. This dividend will be paid on 6 January 2017 to shareholders on the register as at close of business on 2 December 2016.
The adjusted earnings per ordinary share before exceptional items have increased by 60% to 29.83p (2015: 18.62p).
The basic earnings per ordinary share have increased by 69% to 29.83p (2015: 17.62p).
People
We could not have delivered these excellent results without the expertise, energy and passion of everyone connected with our businesses. On behalf of the whole Board, I thank everybody involved.
Given the growth opportunities available to the Group, we will continue to look to strengthen our senior management team where appropriate.
Current Trading and Outlook
Given the importance of Christmas in the context of the overall result, we do not believe that it is appropriate to issue an update on trading since the period end. However, notwithstanding the demanding comparatives going forward following the strong revenue growth in the previous three years, the positive nature of trading in the second half to date is encouraging.
We will provide an update on trading in early January after our key Christmas trading period.
Peter Cowgill
Executive Chairman
13 September 2016
Condensed Consolidated Income Statement
For the 26 weeks to 30 July 2016
26 weeks 26 weeks 52 weeks
to 30 July to to
Note 2016 1 August 30 January
GBP000 2015 2016
GBP000 GBP000
Revenue 970,565 809,901 1,821,652
Cost of sales (503,751) (425,896) (937,431)
------------- ----------- -------------
Gross profit 466,814 384,005 884,221
Selling and distribution
expenses - normal (348,281) (300,599) (648,333)
Selling and distribution
expenses - exceptional 3 - (1,858) -
Administrative expenses
- normal (41,827) (36,690) (78,228)
Administrative expenses
- exceptional 3 - - (25,496)
Other operating income 944 862 1,242
------------- ----------- -------------
Operating profit 77,650 45,720 133,406
Before exceptional items 77,650 47,578 158,902
Exceptional items 3 - (1,858) (25,496)
--------------------------------- ------- ------------- ----------- -------------
Operating profit 77,650 45,720 133,406
Financial income 391 206 388
Financial expenses (630) (1,218) (2,163)
------------- ----------- -------------
Profit before tax 77,411 44,708 131,631
Income tax expense (17,392) (10,294) (31,001)
------------- ----------- -------------
Profit for the period 60,019 34,414 100,630
------------- ----------- -------------
Attributable to equity
holders of the parent 58,058 34,293 97,634
Attributable to non-controlling
interest 1,961 121 2,996
--------------------------------- ------- ------------- ----------- -------------
Basic earnings per ordinary
share 4 29.83p 17.62p 50.16p
------------- ----------- -------------
Diluted earnings per
ordinary share 4 29.83p 17.62p 50.16p
------------- ----------- -------------
Condensed Consolidated Statement of Comprehensive Income
For the 26 weeks to 30 July 2016
26 weeks 26 weeks 52 weeks
to 30 to 1 August to
July 2015 30 January
2016 GBP000 2016
GBP000 GBP000
Profit for the period 60,019 34,414 100,630
Other comprehensive income:
Items that may be classified
subsequently to the
Consolidated Income Statement:
Exchange differences on translation
of foreign operations 10,196 (3,520) 4,144
Total other comprehensive
income for the period 10,196 (3,520) 4,144
------------------------------------- ----------- -------------- -------------
Total comprehensive income
and expense for the period
(net of income tax) 70,215 30,894 104,774
------------------------------------- ----------- -------------- -------------
Attributable to equity holders
of the parent 65,115 32,123 101,828
Attributable to non-controlling
interest 5,100 (1,229) 2,946
------------------------------------- ----------- -------------- -------------
Condensed Consolidated Statement of Financial Position
As at 30 July 2016
As at As at As at
30 July 1 August 30 January
2016 2015 2016
GBP000 GBP000 GBP000
Assets
Intangible assets 72,911 101,130 73,611
Property, plant and
equipment 173,788 170,770 173,317
Other assets 35,212 33,723 33,191
Deferred tax assets 159 - 482
Total non-current assets 282,070 305,623 280,601
-------------------------------- ---------- ----------- -------------
Inventories 295,954 250,617 238,324
Trade and other receivables 95,343 51,392 56,375
Cash and cash equivalents 245,593 160,322 215,996
Total current assets 636,890 462,331 510,695
-------------------------------- ---------- ----------- -------------
Total assets 918,960 767,954 791,296
-------------------------------- ---------- ----------- -------------
Liabilities
Interest-bearing loans
and borrowings (12,812) (59,701) (6,301)
Trade and other payables (388,346) (322,212) (324,964)
Provisions (1,255) (1,096) (1,132)
Income tax liabilities (17,824) (12,039) (15,757)
Total current liabilities (420,237) (395,048) (348,154)
-------------------------------- ---------- ----------- -------------
Interest-bearing loans
and borrowings (933) (281) (274)
Other payables (36,651) (40,018) (40,834)
Provisions (1,032) (1,242) (1,209)
Deferred tax liabilities - (1,964) -
------------------------------- ---------- ----------- -------------
Total non-current liabilities (38,616) (43,505) (42,317)
-------------------------------- ---------- ----------- -------------
Total liabilities (458,853) (438,553) (390,471)
-------------------------------- ---------- ----------- -------------
Total assets less total
liabilities 460,107 329,401 400,825
-------------------------------- ---------- ----------- -------------
Capital and reserves
Issued ordinary share
capital 2,433 2,433 2,433
Share premium 11,659 11,659 11,659
Retained earnings 421,094 318,939 378,898
Other reserves (3,162) (16,934) (10,570)
-------------------------------- ---------- ----------- -------------
Total equity attributable
to equity holders of
the parent 432,024 316,097 382,420
-------------------------------- ---------- ----------- -------------
Non-controlling interest 28,083 13,304 18,405
-------------------------------- ---------- ----------- -------------
Total equity 460,107 329,401 400,825
-------------------------------- ---------- ----------- -------------
Condensed Consolidated Statement of Changes in Equity
For the 26 weeks to 30 July 2016
Foreign Total Equity
Ordinary Currency Attributable
Share Share Retained Translation Other To Equity
Capital Premium Earnings Reserve Equity Holders
GBP000 GBP000 GBP000 GBP000 GBP000 Of The
Parent
GBP000
Balance at 30
January 2016 2,433 11,659 378,898 (7,497) (3,073) 382,420
Profit for the
period - - 58,058 - - 58,058
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - 7,057 - 7,057
Total other comprehensive
income - - - 7,057 - 7,057
--------------------------- ----------- ---------- ----------- ------------- --------- --------------
Total comprehensive
income for the
period - - 58,058 7,057 - 65,115
Dividends to equity
holders - - (12,068) - - (12,068)
Put options held
by non-controlling
interests - - - - 351 351
Acquisition of
non-controlling
interest - - (3,794) - - (3,794)
Non-controlling
interest arising - - - - - -
on acquisition
Balance at 30
July 2016 2,433 11,659 421,094 (440) (2,722) 432,024
--------------------------- ----------- ---------- ----------- ------------- --------- --------------
(continued)
Total Equity
Attributable Non-
To Controlling Total
Equity Holders Interest Equity
Of The Parent GBP000 GBP000
GBP000
Balance at 30 January
2016 382,420 18,405 400,825
Profit for the period 58,058 1,961 60,019
Other comprehensive
income:
Exchange differences
on translation of foreign
operations 7,057 3,139 10,196
Total other comprehensive
income 7,057 3,139 10,196
-------------------------------- ----------------- -------------- --------- Total comprehensive income for the period 65,115 5,100 70,215 Dividends to equity holders (12,068) - (12,068) Put options held by non-controlling interests 351 - 351 Acquisition of non-controlling interest (3,794) 3,794 - Non-controlling interest arising on acquisition - 784 784 Balance at 30 July 2016 432,024 28,083 460,107 -------------------------------- ----------------- -------------- ---------
Condensed Consolidated Statement of Changes in Equity (continued)
For the 26 weeks to 1 August 2015
Foreign Total Equity
Ordinary Currency Attributable
Share Share Retained Translation Other To Equity
Capital Premium Earnings Reserve Equity Holders
GBP000 GBP000 GBP000 GBP000 GBP000 Of The
Parent
GBP000
Balance at 31
January 2015 2,433 11,659 297,161 (11,691) (3,073) 296,489
Profit for the
period - - 34,293 - - 34,293
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - (2,170) - (2,170)
Total other comprehensive
income - - - (2,170) - (2,170)
--------------------------- ----------- ---------- ----------- ------------- --------- --------------
Total comprehensive
income for the
period - - 34,293 (2,170) - 32,123
Dividends to equity
holders - - (11,484) - - (11,484)
Non-controlling
interest arising
on acquisition - - (1,031) - - (1,031)
Balance at 1 August
2015 2,433 11,659 318,939 (13,861) (3,073) 316,097
--------------------------- ----------- ---------- ----------- ------------- --------- --------------
(continued)
Total Equity
Attributable Non-
To Controlling Total
Equity Holders Interest Equity
Of The Parent GBP000 GBP000
GBP000
Balance at 31 January
2015 296,489 13,502 309,991
Profit for the period 34,293 121 34,414
Other comprehensive
income:
Exchange differences
on translation of
foreign operations (2,170) (1,350) (3,520)
Total other comprehensive
income (2,170) (1,350) (3,520)
--------------------------- ----------------- -------------- ----------
Total comprehensive
income for the period 32,123 (1,229) 30,894
Dividends to equity
holders (11,484) - (11,484)
Non-controlling interest
arising on acquisition (1,031) 1,031 -
Balance at 1 August
2015 316,097 13,304 329,401
--------------------------- ----------------- -------------- ----------
Condensed Consolidated Statement of Cash Flows
For the 26 weeks to 30
July 2016
26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
GBP000 GBP000 GBP000
Cash flows from operating
activities
Profit for the period 60,019 34,414 100,630
Income tax expense 17,392 10,294 31,001
Financial expenses 630 1,218 2,163
Financial income (391) (206) (388)
Depreciation and amortisation
of non-current assets 30,326 22,104 48,778
Forex losses on monetary
assets and liabilities 4,570 12,125 7,997
Loss on disposal of non-current
assets 16 225 -
Termination of IT project - - 14,896
Impairment of fixed assets 714 - 10,600
Other exceptional items - 682 -
Increase in inventories (27,854) (25,667) (13,304)
(Increase) / decrease in
trade and other receivables (33,863) 80 47
Increase in trade and other
payables 36,742 29,027 55,738
Interest paid (630) (1,218) (2,163)
Income taxes paid (15,025) (11,049) (29,981)
------------------------------------- ----------- ----------- -------------
Net cash from operating
activities 72,646 72,029 226,014
------------------------------------- ----------- ----------- -------------
Cash flows from investing
activities
Interest received 391 206 388
Proceeds from sale of non-current
assets 1,513 138 1,145
Investment in software
development (1,330) (2,031) (4,401)
Acquisition of property,
plant and equipment (23,058) (43,668) (72,765)
Acquisition of non-current
other assets (3,039) (1,991) (6,343)
Acquisition of non-controlling (1,045) - -
interests
Cash consideration of acquisitions (25,370) - -
Cash acquired with acquisitions 737 - -
Net cash used in investing
activities (51,201) (47,346) (81,976)
------------------------------------- ----------- ----------- -------------
Condensed Consolidated Statement of Cash Flows (continued)
For the 26 weeks to 30 July
2016
26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
GBP000 GBP000 GBP000
Cash flows from financing
activities
Repayment of interest-bearing
loans and borrowings (78) (91) (191)
Repayment of finance lease
liabilities (12) (14) (30)
Drawdown of finance lease
liabilities - - 75
Drawdown / (repayment) of
syndicated bank facility 7,143 23,000 (31,000)
Equity dividends paid - - (13,820)
Dividends paid to non-controlling
interest in subsidiaries - - (120)
-------------------------------------- ------------ ----------- -------------
Net cash provided by / (used
in) financing activities 7,053 22,895 (45,086)
-------------------------------------- ------------ ----------- -------------
Net increase in cash and
cash equivalents 28,498 47,578 98,952
Cash and cash equivalents
at the beginning of the
period 209,859 115,697 115,697
Foreign exchange gains /
(losses) on cash and cash
equivalents 1,687 (8,457) (4,790)
-------------------------------------- ------------ ----------- -------------
Cash and cash equivalents
at the end of
the period 240,044 154,818 209,859
-------------------------------------- ------------ ----------- -------------
Analysis of Net Cash
At At
30 January On acquisition Cash Non-cash 30 July
2016 of subsidiaries flow movements 2016
GBP000 GBP000 GBP000 GBP000 GBP000
Cash at bank and
in hand 215,996 737 27,173 1,687 245,593
Overdrafts (6,137) - 588 - (5,549)
------------------------------ ------------ ------------------ ---------- ------------ ----------
Cash and cash equivalents 209,859 737 27,761 1,687 240,044
------------------------------ ------------ ------------------ ---------- ------------ ----------
Interest bearing
loans and borrowings:
Bank loans (54) (705) 44 - (715)
Syndicated bank facility - - (7,143) - (7,143)
Finance lease liabilities (108) - 12 - (96)
Other loans (276) - 34 - (242)
Total interest bearing
loans and borrowings (438) (705) (7,053) - (8,196)
------------------------------ ------------ ------------------ ---------- ------------ ----------
209,421 32 20,708 1,687 231,848
------------------------------ ------------ ------------------ ---------- ------------ ----------
1. Basis of Preparation
JD Sports Fashion Plc (the 'Company') is a company incorporated and domiciled in the United Kingdom. The half year financial report for the 26 week period to 30 July 2016 represents that of the Company and its subsidiaries (together referred to as the 'Group').
This half year financial report is an interim management report as required by DTR 4.2.3 of the Disclosure and Transparency Rules of the UK's Financial Conduct Authority and was authorised for issue by the Board of Directors on 13 September 2016.
The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU. The annual financial statements of the Group are prepared in accordance with IFRS's as adopted by the EU. The comparative figures for the 52 week period to 30 January 2016 are not the Group's statutory accounts for that financial year. Those accounts have been reported on by the Group's Auditor and delivered to the Registrar of Companies. The Report of the Auditor was (i) unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 of the Companies Act 2006.
The information contained in the half year financial report for the 26 week period to 30 July 2016 and 1 August 2015 has been reviewed and the independent review report for the 26 week period to 30 July 2016 is set out in the half yearly financial report.
As required by the Disclosure and Transparency Rules of the UK's Financial Conduct Authority, the half year financial report has been prepared by applying the same accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the 52 week period to 30 January 2016.
The following amendments to accounting standards and interpretations, issued by the International Accounting Standards Board (IASB), have been adopted for the first time by the Group in the period with no significant impact on its consolidated results or financial position:
-- Annual Improvements to IFRSs - 2012 - 2014 Cycle -- Amendments to IAS 1 'Disclosure initiative'
-- Amendments to IAS 16 and IAS 38 'Clarification of acceptable methods of depreciation and amortisation'
-- Amendments to IAS 27 'Equity method in separate financial statements'
IFRS 9 'Financial Instruments' is expected to be applicable after 1 January 2018. If endorsed, this standard will simplify the classification of financial assets for measurement purposes, but it is not anticipated to have a significant impact on financial statements.
IFRS 16 'Leases' is expected to be applicable after 1 January 2019. If endorsed, this standard will significantly affect the presentation of the Group financial statements with all leases apart from short term leases being recognised as on-balance sheet finance leases with a corresponding liability being the present value of lease payments. The Group is currently considering the implications of IFRS 16 on the Group's consolidated results and financial position.
The Group does not consider that any other standards, amendments or interpretations issued by the IASB, but not yet applicable, will have a significant impact on the financial statements.
Use of estimates and judgements
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the 52 week period to 30 January 2016.
Risks and uncertainties
The Board has considered the risks and uncertainties for the remaining 26 week period to 28 January 2017 and determined that the risks presented in the Annual Report and Accounts 2016, noted below, remain relevant:
Omnichannel
-- Key suppliers and brands -- Protection of intellectual property -- Retail property factors -- Seasonality of sales -- Economic factors -- Reliance on non-UK manufacturers
Consistency of infrastructure
-- Reliance on IT systems -- Reliance on a consolidated warehouse -- Retention of key personnel -- Health and safety -- Foreign exchange risk -- Regulatory and compliance
A major variable, and therefore risk, to the Group's financial performance for the remainder of the financial period is the sales and margin performance in the retail fascias, particularly in December and January. Further comment on this and other risks and uncertainties faced by the Group is provided in the Executive Chairman's statement included within this half year report.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
2. Segmental Analysis
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker to allocate resources to the segments and to assess their performance. The Chief Operating Decision Maker is considered to be the Executive Chairman of JD Sports Fashion Plc.
Information reported to the Chief Operating Decision Maker is focused more on the nature of the businesses within the Group. The Group's reportable segments under IFRS 8 are therefore as follows:
-- Sports Fashion - includes the results of JD Sports Fashion Plc, John David Sports Fashion (Ireland) Limited, Spodis SA, Champion Sports Ireland, JD Sprinter Holdings 2010 SL (including subsidiary companies), JD Sports Fashion BV, Sports Unlimited Retail BV, JD Sports Fashion Germany GmbH, JD Sports Fashion SRL, JD Sports Fashion Belgium BVBA, JD Sports Fashion Sweden AB, JD Sports Fashion Denmark ApS, JD Sports Fashion SDN BHD, Size GmbH, ActivInstinct Limited, JD Gyms Limited, Duffer of St George Limited, Topgrade Sportswear Limited, Kooga Rugby Limited, Focus Brands Limited (including subsidiary companies), Kukri Sports Limited (including global subsidiary companies), Source Lab Limited, R.D. Scott Limited, Tessuti Group Limited (including subsidiary companies), Nicholas Deakins Limited, Cloggs Online Limited, Ark Fashion Limited and Mainline Menswear Limited.
-- Outdoor - includes the results of Blacks Outdoor Retail Limited and Tiso Group Limited (including subsidiary companies).
The Chief Operating Decision Maker receives and reviews segmental operating profit. Certain central administrative costs including Group Directors' salaries are included within the Group's core 'Sports Fashion' result. This is consistent with the results as reported to the Chief Operating Decision Maker.
IFRS 8 requires disclosure of information regarding revenue from major products and customers. The majority of the Group's revenue is derived from the retail of a wide range of apparel, footwear and accessories to the general public. As such, the disclosure of revenues from major customers is not appropriate. Disclosure of revenue from major product groups is not provided at this time due to the cost involved to develop a reliable product split on a same category basis across all companies in the Group.
Intersegment transactions are undertaken in the ordinary course of business on arm's length terms.
The Board consider that certain items are cross divisional in nature and cannot be allocated between the segments on a meaningful basis. Net funding costs and taxation are treated as unallocated reflecting the nature of the Group's syndicated borrowing facilities and its tax group. Drawdowns from the Group's syndicated borrowing facility of GBP7,143,000 (2015: GBP54,000,000) and liabilities for taxation of GBP17,665,000 (2015: GBP14,003,000) are included within the unallocated segment.
Each segment is shown net of intercompany transactions and balances within that segment. The eliminations remove intercompany transactions and balances between different segments which primarily relate to the net down of long term loans and short term working capital funding provided by JD Sports Fashion Plc (within Sports Fashion) to other companies in the Group, and intercompany trading between companies in different segments.
Operating Segments
Information regarding the Group's operating segments for the 26 weeks to 30 July 2016 is reported below:
Income statement
Sports
Fashion Outdoor Total
GBP000 GBP000 GBP000
Gross revenue 897,478 73,087 970,565
Intersegment revenue - - -
--------- ---------- ---------
Revenue 897,478 73,087 970,565
--------- ---------- ---------
Operating profit
/ (loss) before
exceptional items 79,902 (2,252) 77,650
Exceptional items - - -
--------- ---------- ---------
Operating profit
/ (loss) 79,902 (2,252) 77,650
Financial income 391
Financial expenses (630)
--------- ---------- ---------
Profit before tax 77,411
Income tax expense (17,392)
--------- ---------- ---------
Profit for the
period 60,019
--------- ---------- ---------
Total assets and liabilities
Sports Outdoor Unallocated Eliminations Total
Fashion GBP000 GBP000 GBP000 GBP000
GBP000
Total assets 922,700 68,717 159 (72,616) 918,960
Total liabilities (397,457) (109,045) (24,967) 72,616 (458,853)
---------- ----------- ------------ ------------- ----------
Total segment
net assets
/ (liabilities) 525,243 (40,328) (24,808) - 460,107
---------- ----------- ------------ ------------- ----------
The comparative segmental results for the 26 weeks to 1 August 2015 are as follows:
Income statement
Sports
Fashion Outdoor Total
GBP000 GBP000 GBP000
Gross revenue 741,779 68,260 810,039
Intersegment revenue (138) - (138)
--------- ---------- ---------
Revenue 741,641 68,260 809,901
--------- ---------- ---------
Operating profit
/ (loss) before
exceptional items 52,068 (4,490) 47,578
Exceptional items (1,564) (294) (1,858)
--------- ---------- ---------
Operating profit
/ (loss) 50,504 (4,784) 45,720
Financial income 206
Financial expenses (1,218)
--------- ---------- ---------
Profit before tax 44,708
Income tax expense (10,294)
--------- ---------- ---------
Profit for the
period 34,414
--------- ---------- ---------
Total assets and liabilities
Sports Outdoor Unallocated Eliminations Total
Fashion GBP000 GBP000 GBP000 GBP000
GBP000
Total assets 766,227 85,845 - (84,118) 767,954
Total liabilities (331,521) (123,148) (68,002) 84,118 (438,553)
---------- ----------- ------------ ------------- ----------
Total segment
net assets
/ (liabilities) 434,706 (37,303) (68,002) - 329,401
---------- ----------- ------------ ------------- ----------
Geographical Information
The Group's operations are located in the UK, Republic of Ireland, France, Spain, Germany, the Netherlands, Italy, Sweden, Denmark, Belgium, Portugal, Malaysia, Australia, New Zealand, Canada, Dubai, Singapore and Hong Kong.
The following table provides analysis of the Group's revenue by geographical market, irrespective of the origin of the goods / services:
26 weeks 26 weeks
to 30 July to 1 August
2016 2015
GBP000 GBP000
UK 712,056 621,646
Europe 244,973 176,413
Rest of
world 13,536 11,842
---------- ------------ -------------
970,565 809,901
--------- ------------ -------------
The revenue from any individual country, with the exception of the UK, is not more than 10% of the Group's total revenue.
The following is an analysis of the carrying amount of segmental non-current assets by the geographical area in which the assets are located:
As at As at
30 July 1 August
2016 2015
GBP000 GBP000
UK 169,766 209,867
Europe 110,332 95,571
Rest of world 1,972 185
---------------- --------- ----------
282,070 305,623
--------------- --------- ----------
3. Exceptional Items
26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
GBP000 GBP000 GBP000
Property related exceptional - 1,858 -
costs
Selling and distribution - 1,858 -
expenses - exceptional
------------------------------- ----- ----------- -------------
Impairment of goodwill,
brands and fascia names
(1) - - 10,600
Termination of project
to replace core IT systems
(2) - - 14,896
------------------------------- ----- ----------- -------------
Administrative expenses
- exceptional - - 25,496
- 1,858 25,496
------------------------------- ----- ----------- -------------
(1) Relates to the impairment in the period to 30 January 2016 of the goodwill arising in prior years on the acquisition of ActivInstinct Limited, a partial impairment of the Blacks fascia name and the impairment of several other goodwill and fascia name balances which were not significant.
(2) One off exceptional charge writing off costs to 30 January 2016 including certain other related costs.
These selling and distribution expenses and administrative expenses are exceptional items as they are, in aggregate, material in size and / or unusual or infrequent in nature.
4. Earnings per Ordinary Share
Basic and diluted earnings per ordinary share
The calculation of basic and diluted earnings per ordinary share at 30 July 2016 is based on the profit for the period attributable to equity holders of the parent of GBP58,058,000 (26 weeks to 1 August 2015: GBP34,293,000; 52 weeks to 30 January 2016: GBP97,634,000).
The weighted average number of ordinary shares outstanding during the 26 weeks to 30 July 2016 was 194,646,632 (26 weeks to 1 August 2015: 194,646,632; 52 weeks to 30 January 2016: 194,646,632), calculated as follows:
26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
Issued ordinary shares
at beginning and end of
period 194,646,632 194,646,632 194,646,632
--------------------------- -------------- -------------- --------------
Adjusted basic and diluted earnings per ordinary share
Adjusted basic and diluted earnings per ordinary share have been based on the profit for the period attributable to equity holders of the parent for each financial period but excluding the post-tax effect of certain exceptional items. The Directors consider that this gives a more meaningful measure of the underlying performance of the Group.
26 weeks 26 weeks 52 weeks
to to to
30 July 1 August 30 January
2016 2015 2016
GBP000 GBP000 GBP000
Profit for the period
attributable to equity
holders of the parent 58,058 34,293 97,634
Exceptional items excluding
loss on disposal of non-current
assets - 1,633 25,496
Tax relating to exceptional
items - 312 (3,737)
Profit for the period
attributable to equity
holders of the parent
excluding exceptional
items 58,058 36,238 119,393
----------------------------------- ----------- ----------- -------------
Adjusted basic and diluted
earnings per ordinary
share 29.83p 18.62p 61.34p
----------------------------------- ----------- ----------- -------------
5. Acquisitions
Current period acquisitions
Sports Unlimited Retail BV
On 20 March 2016, the Group acquired, via its newly incorporated subsidiary Sports Unlimited Retail BV, the trading assets and trade of the Aktiesport and Perry Sport fascias from the Trustee of Unlimited Sports Group BV which was declared bankrupt by the court of Amsterdam on 23 February 2016. On acquisition there were 187 stores and two trading websites.
The Board believes that the cash consideration of EUR26.5 million represents the current best estimates of the fair value of the net assets acquired. The provisional goodwill calculation is summarised below:
Provisional
Measurement fair value
Book adjustments at
value GBP000 30 July
GBP000 2016
GBP000
Acquiree's net assets at
acquisition date:
Property, plant & equipment 3,929 - 3,929
Inventories 23,330 1,608 24,938
Cash and cash equivalents 58 - 58
Trade and other payables (8,364) (1,608) (9,972)
Net identifiable assets 18,953 - 18,953
--------- -------------- --------------
Goodwill on acquisition -
--------- -------------- --------------
Consideration paid - satisfied
in cash 18,953
--------- -------------- --------------
Included in the 26 week period ended 30 July 2016 is revenue of GBP31,096,000 and a loss before tax of GBP2,944,000 in respect of Sports Unlimited Retail BV.
JD Sports Fashion SDN BHD
On 28 April 2016, the Group acquired via its 50% subsidiary in Malaysia, JD Sports Fashion SDN BHD, 20 multi-brand Sports Fashion stores and a trading website which currently trade as Sports Empire, Revolution and The Marathon Shop from Runners World SDN BHD. JD Sports Fashion SDN BHD is an entity controlled by the Group and therefore the results and financial position of the entity are consolidated into the financial statements of the Group. The cash consideration payable on this transaction was MYR 20.7 million.
The Board believes that the excess of cash consideration paid over net identifiable assets on acquisition of MYR 4.9 million represents the fair value of the Sports Empire, Revolution and The Marathon Shop fascia names. The provisional goodwill calculation is summarised below:
Provisional
Measurement fair value
Book adjustments at
value GBP000 30 July
GBP000 2016
GBP000
Acquiree's net assets at
acquisition date:
Intangible assets 823 - 823
Property, plant & equipment 356 - 356
Other non-current assets 249 - 249
Inventories 2,018 - 2,018
Net identifiable assets 3,446 - 3,446
--------- -------------- --------------
Goodwill on acquisition -
--------- -------------- --------------
Consideration paid - satisfied
in cash 3,446
--------- -------------- --------------
Included in the 26 week period ended 30 July 2016 is revenue of GBP2,848,000 and a loss before tax of GBP32,000 in respect of JD Sports Fashion SDN BHD.
SportIberica Sociedade de Artigos de Desporto, S.A.
On 1 July 2016, the Group acquired, both directly and via its 50.1% owned subsidiary JD Sprinter Holdings 2010 SL, an aggregate of 80% of the issued share capital of SportIberica Sociedade de Artigos de Desporto S.A. for cash consideration of EUR4.2 million with additional consideration of up to EUR0.5 million payable if certain criteria are met. At acquisition, management believed that the criteria would be met for the maximum consideration to be payable and therefore management believes that the fair value of the total consideration at this time is EUR4.7 million.
SportIberica currently trades as The Athlete's Foot through 12 Sports Fashion stores.
The Board believes that the excess of cash consideration paid over net identifiable assets on acquisition of GBP1,422,000 is best considered as goodwill on acquisition representing anticipated future operating synergies.
The provisional goodwill calculation is summarised below:
Provisional
Measurement fair value
Book adjustments at
value GBP000 30 July
GBP000 2016
GBP000
Acquiree's net assets at
acquisition date:
Property, plant & equipment 183 - 183
Other non-current assets 42 - 42
Inventories 2,821 - 2,821
Cash 679 - 679
Trade and other receivables 866 - 866
Income tax assets 36 - 36
Trade and other payables (1,540) - (1,540)
Interest bearing loans and
borrowings (705) - (705)
Net identifiable assets 2,382 - 2,382
--------- -------------- --------------
Non-controlling interest (476) - (476)
Goodwill on acquisition 1,422
--------- -------------- --------------
Consideration paid - satisfied
in cash 2,971
Contingent consideration 357
--------- -------------- --------------
Total consideration 3,328
--------- -------------- --------------
Included in the 26 week period ended 30 July 2016 is revenue of GBP906,000 and a profit before tax of GBP40,000 in respect of SportIberica Sociedade de Artigos de Desporto, S.A.
Other acquisitions
During the period, the Group has made several small acquisitions, including increasing its shareholding to 100% in two subsidiaries which were previously non-wholly owned. These transactions were not material.
Half year impact of acquisitions
Had the acquisitions of Sports Unlimited Retail BV, JD Sports Fashion SDN BHD and SportIberica been effected at 31 January 2016, the revenue and profit before tax of the Group for the 26 week period to 30 July 2016 would have been GBP991,169,000 and GBP75,191,000 respectively.
Acquisition costs
Acquisition related costs amounting to GBP241,000 (Sports Unlimited Retail BV: GBP139,000; JD Sports Fashion SDN BHD: GBP68,000; and, SportIberica Sociedade de Artigos de Desporto S.A: GBP34,000) have been excluded from the consideration transferred and have been recognised as an expense in the year, within administrative expenses in the Consolidated Income Statement.
Prior period acquisitions
During the prior period, the Group increased its shareholding in a non-wholly owned subsidiary. The transaction was not material.
6. Subsequent Events
Next Athleisure Pty Limited
On 26 August 2016, the Group acquired, via its newly incorporated subsidiary JD Sports Fashion Holdings Australia Pty, 80% of the issued ordinary share capital of Next Athleisure Pty Limited for consideration of $6.6 million AUD. Next Athleisure Pty Limited currently operates 32 stores and a trading website in Australia under the Glue and Superglue retail banners.
The Board believes that the excess of cash consideration paid over net identifiable assets on acquisition of GBP4,739,000 represents the fair value of the 'Glue' and 'Superglue' fascia names. The provisional goodwill calculation is summarised below:
Provisional
fair value
at
26 August
2016
GBP000
Acquiree's net assets
at acquisition date:
Intangible assets 4,821
Property, plant & equipment 5,150
Other non-current assets 2
Inventories 9,428
Cash 471
Trade and other receivables 2,683
Income tax assets 159
Deferred tax assets 1,510
Trade and other payables (11,903)
Interest bearing loans
and borrowings (7,998)
Net identifiable assets 4,323
---------
Non-controlling interest (865)
Goodwill on acquisition -
---------
Consideration paid - satisfied
in cash 3,059
Consideration as loan
to non-controlling interest 399
---------
Total consideration 3,458
---------
7. Half Year Report
As indicated in the 2012 Notice of Annual General Meeting, in line with many other listed companies the company will no longer be issuing a hard copy of the half year report. Instead, the Group has decided to make the half year report available via the Company's website.
Accordingly the half year report will be available for downloading from www.jdplc.com from mid October 2016. Paper based copies will be available on application to the Company Secretary, JD Sports Fashion Plc, Hollinsbrook Way, Pilsworth, Bury, Lancashire, BL9 8RR.
Disclaimer
This announcement contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of JD Sports Fashion plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFDFWEFMSEDU
(END) Dow Jones Newswires
September 13, 2016 02:00 ET (06:00 GMT)
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