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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 6.35 | 5.36% | 124.80 | 124.75 | 124.85 | 127.35 | 118.65 | 120.35 | 5,941,492 | 12:15:09 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Sport Gds Stores, Bike Shops | 10.13B | 142.5M | 0.0275 | 45.49 | 6.48B |
From Apr 2019 to Apr 2024
TIDMJD.
RNS Number : 4307Q
JD Sports Fashion Plc
12 September 2017
12 September 2017
JD SPORTS FASHION PLC
INTERIM RESULTS
FOR THE TWENTY SIX WEEKS TO 29 JULY 2017
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 29 July 2017 (comparative figures are shown for the 26 week period ended 30 July 2016).
Hot Features
Premium
2017 2016 % Change
GBPm GBPm
Revenue 1,367.2 970.6 +41%
Gross profit % 47.4% 48.1%
Operating profit 103.3 77.6 +33%
Net interest expense (0.6) (0.2)
Profit before tax 102.7 77.4 +33%
Basic earnings per ordinary
share (a) 8.09p 5.97p +36%
Interim dividend payable
per ordinary share (a) 0.26p 0.25p +4%
Net cash at period end
(b) 222.7 231.8
a) The prior year has been restated to reflect the 5:1 share split which was approved by shareholders at a General Meeting on 24 November 2016
b) Net cash consists of cash and cash equivalents together with interest-bearing loans and borrowings
Note: Throughout this release '*' indicates first instance of a term defined and explained in the Glossary at the end of these preliminary results
Group Highlights
-- Another record result for the half year with Group profit before tax increased by a further 33%
-- Further encouraging like for like* sales growth in stores with strong growth online -- Net increase of 12 JD stores in UK and Ireland -- International development of JD continues with: a) Net increase of 23 JD stores across mainland Europe b) First JD stores in Australia c) Additional stores in Malaysia -- Positive contribution in the period from Go Outdoors
-- Interim dividend increased by 4% from 0.25p to 0.26p. Strong cash position maintained in the Group to maximise the available funding to support ongoing growth opportunities
-- Key financial information of the two business segments is tabulated below:
Period to 29
July 2017 Sports Fashion Outdoor Total
GBPm GBPm GBPm
Revenue 1,170.6 196.6 1,367.2
----------------- ---------- --------
Gross margin
% 48.1% 43.3% 47.4%
----------------- ---------- --------
EBITDA* 130.3 6.5 136.8
Depreciation
/ amortisation(1) (27.1) (6.4) (33.5)
----------------- ---------- --------
Operating profit 103.2 0.1 103.3
----------------- ---------- --------
(1) Depreciation / amortisation in Outdoor includes a non-trading amortisation charge of GBP1.9m in relation to the Go Outdoors fascia name and various brand names which arises consequent to the accounting on the acquisition of the business in the prior year. The value attributable to the fascia name on acquisition was GBP59.1m which is being amortised over 20 years and the value attributed to the brands is GBP7.6m which is being amortised over 10 years.
Period to 30
July 2016 Sports Fashion Outdoor Total
GBPm GBPm GBPm
Revenue 897.5 73.1 970.6
----------------- ---------- --------
Gross margin
% 48.4% 44.2% 48.1%
----------------- ---------- --------
EBITDA 108.2 (0.6) 107.6
Depreciation
/ amortisation (28.3) (1.7) (30.0)
----------------- ---------- --------
Operating profit
/ (loss) 79.9 (2.3) 77.6
----------------- ---------- --------
Peter Cowgill, Executive Chairman, said:
"I am delighted to report that the Group continues to make strong progress with profit before tax for the first half increased by a further 33% to a new record level of GBP102.7 million. This is another pleasing result demonstrating the strength of our highly differentiated multichannel proposition and our ability to prosper in an increasingly competitive market for athletic inspired footwear and apparel.
"The base of our ongoing excellent multichannel retail performance comes from the continued strength of our core UK and Ireland Sports Fashion fascias. We have strengthened our foundations by significant progression internationally both instore and online so that the JD fascia now has a much broader store and multichannel consumer reach and brand influence globally.
"We are encouraged by the sales to date in the second half which have continued at similar levels to those in the first half supporting our continued confidence in the robustness of the JD proposition. We expect the year end outturn to be towards the upper end of market expectations, which currently range from approximately GBP268 million to GBP290 million, and remain confident that we are appropriately positioned to deliver further profitable growth and enhance long term shareholder value."
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 the Group continues to make strong progress with profit before tax for the first half increased by a further 33% to a new record level of GBP102.7 million. This is another pleasing result demonstrating the strength of our highly differentiated multichannel proposition and our ability to prosper in an increasingly competitive market for athletic inspired footwear and apparel.
The JD fascia has the unique ability to introduce new brands and ranges, ignite desire in the consumer and deliver sales at significant scale. We are extending our appeal through continual engagement with our customers and by exploiting our strong foundations in the breadth and exclusivity of our brand offer, being first to market and consistently delivering high standards of visual merchandising both instore and online. We will continue to invest in brand relationships and our various fascias to ensure that our multichannel proposition retains its dynamic appeal and elevates the consumer experience, enabling our customers to interact with us when, where and through the channel of their choice.
The base of our ongoing excellent multichannel retail performance comes from the continued strength of our core* UK and Ireland Sports Fashion fascias. We have strengthened these foundations with significant progression internationally, both instore and online, so that the JD fascia now has a much broader store and multichannel consumer reach and brand influence globally. During the period there has been a net increase of 40 JD stores of which 23 have been in mainland Europe. We would expect a similar number of net new JD stores across mainland Europe in the second half. Further afield, we have opened two further new JD stores in Malaysia and we also successfully launched the JD fascia in Australia both online and in stores with three stores trading at the period end and a fourth store opened subsequently. We are very encouraged by the positive start that we have made internationally and we expect to expand the number of countries in which we are physically present over the next twelve months. Further to the announcement in March 2017, we are also in advanced discussions regarding the proposed joint venture with Sonae in Spain and Portugal.
The continuing international growth in physical store space is complemented by ongoing investment in our international multichannel capability with a significantly expanded multicurrency website estate. We believe we are creating an industry leading retail business with the best of physical and digital retail combined to give a compelling proposition and enabling our consumers to shop seamlessly across all channels. We believe that this multichannel capability is a key differentiator for us versus our developing competitor set. JD's large retail footprint and comprehensive range of trading websites also provides it with the capability to access an increasingly broad and authoritative selection of branded footwear and apparel to complement the traditional Sports Fashion ranges with the overall offer constantly evolving to ensure that JD remains on trend and maintains its points of difference. New ranges have been introduced in the period from Sik Silk, Tommy Hilfiger and Calvin Klein with further brand partnerships under constant review.
We are also pleased with the progress being made in the Outdoor fascias. The acquisition of Go Outdoors in November 2016 was approved unconditionally on 18 May 2017 by the Competition and Markets Authority. We were therefore obliged to operate the Go Outdoors business separately to our pre-existing Outdoors businesses for the majority of the period. We remain confident that the acquisition of Go Outdoors will enhance our overall Outdoor performance in the longer term, as we begin to gain the benefits of operational synergies.
We continue to make very significant investments in logistics to support the ongoing substantial growth in stores and e-commerce across our businesses. Works are ongoing on the project to expand our internal use of the Group's principal Kingsway warehouse site. The total cost of this project is around GBP21 million with the majority of the works taking place in the current year (GBP4 million was incurred last year). When completed, the storage capacity in this site will be increased by approximately 25% to 15 million units. Work has also now commenced on the construction of the new 352,000 square feet leased building extension to this facility with the site scheduled to be handed over in Spring 2018. The cost that the Group will incur for the initial phase of fitting out this site, including automation equipment, has been estimated at around GBP40 million with the majority of this spend incurred next year. Additionally, the Sprinter business in Spain has reached a scale where its current warehousing facilities, which it moved into in 2012, will become an inhibitor to future growth. Therefore, during the period we acquired a new site in Alicante which has a footprint of 39,000 square metres at a total cost of approximately EUR15 million. This site also has a considerable amount of spare land for future expansion if needed. The initial fit out of this warehouse has now commenced and is expected to cost around EUR20 million with the majority of this expenditure incurred in the second half of this year ahead of a phased transfer of activity next year. Our capital expenditure guidance for this year is consequently now raised to GBP160 million as we continue to take advantage of significant growth opportunities.
Sports Fashion
Sports Fashion has had another exceptional first half with operating profit increasing by a further 29% to GBP103.2 million (2016: GBP79.9 million).
Despite a relative lack of new brand models during the period, like for like store sales growth in our core JD/Size? Fascias in the UK and Ireland was 3% and 7% in mainland Europe on a constant currency basis. These are highly satisfactory results given the double digit like for like growth achieved overall in the previous three years (compound growth in the UK and Ireland over this period of approximately 50%) as well as double digit growth in online sales for the JD websites, which now represent 13.7% of total net sales (2016 first half: 11.1%) across our core UK and Ireland markets. We will continue to invest heavily in digital innovation and mobile technologies both instore and online, further enhancing the multichannel journeys available to our customers.
There have been new store openings in most of our existing territories and during the period we also converted the 12 stores in Portugal previously trading as The Athletes Foot to JD. We expect to maintain the current momentum on store openings for JD in mainland Europe through the second half with approximately one new store opening per week on average.
Performance in our non JD fascias in Europe has continued to be satisfactory with the Sprinter businesses continuing to develop particularly positively in Spain. Meanwhile, in Sports Unlimited Retail in the Netherlands, our focus has been to consolidate the Perry Sport and Aktiesport store portfolios down to a sustainable size and use those stores which were not part of our longer term plans to trade through the excess and disjointed stock from the acquisition in the prior year. This process is now substantially complete and the business is more appropriately positioned for future development.
Further afield, we expanded our presence in Malaysia during the period with two additional JD stores of which one is in Kuala Lumpur and the other is in Johor, in the south of the country. Including the more recent opening at the Miranda Shopping Centre in Sydney, we now have four stores trading as JD in Australia with two in the Sydney Metropolitan area and one each in Melbourne and Gold Coast. Trading in these territories has given us a number of anticipated supply chain challenges but we are excited by the progress being made. Both territories have trading websites to complement the development of the stores and we are pleased with our overall development in these new markets.
Our multichannel Fashion business, Scotts and Tessuti, also continues to gain momentum with each fascia delivering a pleasing positive like for like performance during the period. We anticipate further favourable developments as we build on our increasingly strong relationships with the major premium brands with the store environments also being developed to an increasingly high standard.
The overall gross margin in Sports Fashion was slightly below the previous year, as previously anticipated and reported, reflecting an increase in cost prices consequent to the weakening of sterling after the Brexit vote. The overall market remains favourable.
Outdoor
Outdoor, including Go Outdoors for the first time, has delivered a positive result in the first half for the first time with an operating profit of GBP0.1m (2016: loss of GBP2.3 million). This result is stated after a non-trading amortisation charge of GBP1.9m which represents the start of the amortisation of the intangible assets on the fascia and various brand names which were created on the consolidation of the acquisition last year.
This profitable result has largely been driven from Go Outdoors where the strong camping and outdoor living proposition benefits the first half. Excluding the non-trading amortisation charge of GBP1.9m, Go Outdoors has delivered a profit from its trading activity of GBP4.0m which is broadly in line with our expectations and GBP1.6m ahead of what would have been reported in the equivalent period for the business in the prior year.
We also continue to make encouraging progress in our pre-existing businesses with Blacks / Millets seeing a reduction in its first half loss from GBP2.3 million to GBP1.6 million. We are pleased that our team's ongoing efforts to improve the Spring/Summer offer and deliver a proposition which can trade all year have had positive results. Both fascias delivered encouraging like for like store sales growth during the period.
We are still only in the preliminary stages of our planning for an enlarged Outdoors business and we would not anticipate making any material changes to the operations of any of our businesses in the next year. However, we believe that the availability of product in the Go Outdoors stores, and consequently the sales, could be enhanced by having a greater proportion of stock supplied from central warehousing. This is a longer term objective.
Group Performance
Revenue and Gross Margin
Total Group revenue increased by 41% in the period to GBP1,367.2 million (2016: GBP970.6 million). Like for like store sales for the 26 week period across all Group fascias, including those in Europe, increased by approximately 3% which was another exceptional performance given the growth seen in previous years. This was complemented by a significant growth in online sales.
Total gross margin of 47.4% was 0.7% lower than the prior year (2016: 48.1%) partly as a result of the higher participation of the lower margin Outdoor businesses in the overall Group result after the acquisition of Go Outdoors in the second half of last year. Margin has also been impacted by sterling weakness after the Brexit vote.
Operating Profit
Operating profit for the period increased by 33% to GBP103.3 million (2016: GBP77.6 million) following an exceptional performance in our Sports Fashion fascias and a positive contribution from Go Outdoors.
There were no exceptional charges in the period (2016: GBPnil).
Cash & Working Capital
The net cash balance at the end of the period was GBP222.7 million (2016: GBP231.8 million) with the significant investments in the last year on both acquisitions and capital expenditure being funded by the ongoing strong cash generation in our core retail fascias.
The growth of 40% in net stocks to GBP414.3 million (2016: GBP296.0 million) is consistent with the growth in sales and we maintain our robust approach to stock management.
Gross capital expenditure (excluding disposal costs) increased significantly to GBP76.3 million (2016: GBP27.4 million). The expenditure in the year includes EUR15.1m on the acquisition of a new warehouse in Alicante for our Sprinter business and GBP10.2 million on the project to expand our internal use of the Group's existing Kingsway warehouse site. Elsewhere, the primary focus of our capital expenditure remains our retail fascias with the spend in the period increasing by GBP22.9 million to GBP43.5 million (2016: GBP20.6 million).
We currently expect the capital expenditure for the full year to be approximately GBP160 million. 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
(Store JD JD JD JD JD
Nos.) UK & Europe Asia Aust Size & C'sport Sprinter SUR Glue Other Total
ROI Size?
Period
start 369 157 3 - 37 566 75 119 164 32 94 1,050
New stores 18 25 2 2 1 48 3 5 - - 3 59
Transfers 1 - - 1 - 2 - - - (1) (1) -
Closures (7) (2) - - (1) (10) (1) - (58) - (10) (79)
------ ------- ------ ------ ------ ------ --------- ---------- ------ ------ ------- -------
Period
end 381 180 5 3 37 606 77 124 106 31 86 1,030
------ ------- ------ ------ ------ ------ --------- ---------- ------ ------ ------- -------
(000
Sq Ft)
Period
start 1,429 386 19 - 65 1,899 83 1,069 836 130 245 4,262
New stores 71 69 7 9 2 158 4 34 - - 8 204
Extensions 3 - - - - 3 - - - - - 3
Transfers 1 - - 5 - 6 - - - (5) (1) -
Closures (22) (3) - - (2) (27) (1) - (117) - (31) (176)
Period
end 1,482 452 26 14 65 2,039 86 1,103 719 125 221 4,293
------ ------- ------ ------ ------ ------ --------- ---------- ------ ------ ------- -------
In addition, there were ten JD branded Gyms at the period end with new gyms in the period at Batley and Birmingham. A gym at Salford has opened subsequently.
Outdoor Fascias
(No. Stores) Blacks Millets Tiso Go Outdoors Other Total
Period
start 59 99 15 58 7 238
New stores 2 - - 1 - 3
Transfers (2) 2 - - - -
Closures (1) (2) - - - (3)
------- -------- ----- ------------ ------ ------
Period
end 58 99 15 59 7 238
------- -------- ----- ------------ ------ ------
(000 Sq
Ft)
Period
start 204 199 94 1,699 163 2,359
New stores 17 - - 30 - 47
Transfers (5) 5 - - - -
Closures (5) (4) - - - (9)
Period
end 211 200 94 1,729 163 2,397
------- -------- ----- ------------ ------ ------
Dividends and Earnings per Ordinary Share
The Board proposes paying an interim dividend of 0.26p (2016: 0.25p) per ordinary share, an increase of 4%. This dividend will be paid on 5 January 2018 to shareholders on the register at 1 December 2017. We continue to believe that it is 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.
The basic and adjusted* earnings per ordinary share have increased by 36% to 8.09p (2016: 5.97p).
People
The commitment of our employees is crucial to our success and I would like to thank everyone in our businesses for their support in delivering another set of excellent results. Their talent and energy is at the heart of our success and we remain committed to giving our colleagues the quality of employment that reflects the significant contribution that they make.
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
We are encouraged by the sales to date in the second half which have continued at similar levels to those in the first half supporting our continued confidence in the robustness of the JD proposition.
We expect year end outturn to be towards the upper end of market expectations, which currently range from approximately GBP268 million to GBP290 million, and remain confident that we are appropriately positioned to deliver further profitable growth and enhance long term shareholder value.
We will next provide an update on trading in early January after our key Christmas trading period.
Peter Cowgill
Executive Chairman
12 September 2017
Condensed Consolidated Income Statement
For the 26 weeks to 29 July 2017
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
Note 2017 2016 2017
GBPm GBPm GBPm
Revenue 1,367.2 970.6 2,378.7
Cost of sales (718.6) (503.8) (1,215.1)
----------- ----------- -------------
Gross profit 648.6 466.8 1,163.6
Selling and distribution
expenses - normal (487.1) (348.3) (813.0)
Administrative expenses
- normal (59.1) (41.8) (106.3)
Administrative expenses
- exceptional 3 - - (6.4)
Other operating income 0.9 0.9 1.9
----------- ----------- -------------
Operating profit 103.3 77.6 239.8
Before exceptional items 103.3 77.6 246.2
Exceptional items 3 - - (6.4)
--------------------------------- ------- ----------- ----------- -------------
Operating profit 103.3 77.6 239.8
Financial income 0.3 0.4 0.8
Financial expenses (0.9) (0.6) (2.2)
----------- ----------- -------------
Profit before tax 102.7 77.4 238.4
Income tax expense (21.6) (17.4) (53.8)
----------- ----------- -------------
Profit for the period 81.1 60.0 184.6
----------- ----------- -------------
Attributable to equity
holders of the parent 78.7 58.1 178.9
Attributable to non-controlling
interest 2.4 1.9 5.7
Basic earnings per ordinary
share 4 8.09p 5.97p 18.38p
----------- ----------- -------------
Diluted earnings per
ordinary share 4 8.09p 5.97p 18.38p
----------- ----------- -------------
Condensed Consolidated Statement of Comprehensive Income
For the 26 weeks to 29 July 2017
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2017 2016 2017
GBPm GBPm GBPm
Profit for the period 81.1 60.0 184.6
Other comprehensive income:
Items that may be classified
subsequently to the
Consolidated Income Statement:
Exchange differences on translation
of foreign operations 6.7 10.1 22.5
Total other comprehensive
income for the period 6.7 10.1 22.5
------------------------------------- ----------- ----------- -------------
Total comprehensive income
and expense for the period
(net of income tax) 87.8 70.1 207.1
------------------------------------- ----------- ----------- -------------
Attributable to equity holders
of the parent 85.5 65.1 197.8
Attributable to non-controlling
interest 2.3 5.0 9.3
------------------------------------- ----------- ----------- -------------
Condensed Consolidated Statement of Financial Position
As at 29 July 2017
As at As at As at
29 July 30 July 28 January
2017 2016 2017
GBPm GBPm GBPm
Assets
Intangible assets 189.5 72.9 190.9
Property, plant and
equipment 276.8 173.8 235.8
Other assets 44.4 35.2 38.1
Deferred tax assets - 0.2 -
Total non-current
assets 510.7 282.1 464.8
------------------------------ ----------- ----------- --------------
Inventories 414.3 296.0 348.0
Trade and other receivables 138.4 95.3 118.5
Cash and cash equivalents 263.7 245.6 247.6
Total current assets 816.4 636.9 714.1
------------------------------ ----------- ----------- --------------
Total assets 1,327.1 919.0 1,178.9
------------------------------ ----------- ----------- --------------
Liabilities
Interest-bearing loans
and borrowings (37.1) (12.8) (31.5)
Trade and other payables (546.4) (388.3) (469.1) Provisions (0.6) (1.3) (1.0) Income tax liabilities (23.4) (17.9) (33.6) Total current liabilities (607.5) (420.3) (535.2) ------------------------------ ----------- ----------- -------------- Interest-bearing loans and borrowings (3.9) (1.0) (2.5) Other payables (54.8) (36.6) (53.2) Provisions (1.1) (1.0) (1.0) Deferred tax liabilities (7.8) - (8.2) ------------------------------ ----------- ----------- -------------- Total non-current liabilities (67.6) (38.6) (64.9) ------------------------------ ----------- ----------- -------------- Total liabilities (675.1) (458.9) (600.1) ------------------------------ ----------- ----------- -------------- Total assets less total liabilities 652.0 460.1 578.8 ------------------------------ ----------- ----------- -------------- Capital and reserves Issued ordinary share capital 2.4 2.4 2.4 Share premium 11.7 11.7 11.7 Retained earnings 609.4 421.1 543.3 Other reserves 1.6 (3.2) (5.2) ------------------------------ ----------- ----------- -------------- Total equity attributable to equity holders of the parent 625.1 432.0 552.2 ------------------------------ ----------- ----------- -------------- Non-controlling interest 26.9 28.1 26.6 ------------------------------ ----------- ----------- -------------- Total equity 652.0 460.1 578.8 ------------------------------ ----------- ----------- --------------
Condensed Consolidated Statement of Changes in Equity
For the 26 weeks to 29 July 2017
Total
Equity
Ordinary Foreign Attributable
Share Share Retained Treasury Other Currency To Equity
Capital Premium Earnings Reserve Equity Translation Holders
GBPm GBPm GBPm GBPm GBPm Reserve Of The
GBPm Parent
GBPm
Balance at 28
January 2017 2.4 11.7 543.3 (15.9) (0.5) 11.2 552.2
Profit for the
period - - 78.7 - - - 78.7
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - - - 6.8 6.8
Total other
comprehensive
income - - - - - 6.8 6.8
----------------------- ----------- ---------- ----------- ----------- --------- -------------- ---------------
Total comprehensive
income for the
period - - 78.7 - - 6.8 85.5
Dividends to
equity holders - - (12.7) - - - (12.7)
Acquisition
of non-controlling
interest - - 0.1 - - - 0.1
Non-controlling - - - - - - -
interest arising
on acquisition
Balance at 29
July 2017 2.4 11.7 609.4 (15.9) (0.5) 18.0 625.1
----------------------- ----------- ---------- ----------- ----------- --------- -------------- ---------------
Total Equity
Attributable Non-
To Controlling Total
Equity Holders Interest Equity
Of The Parent GBPm GBPm
GBPm
Balance at 28 January 2017 552.2 26.6 578.8
Profit for the period 78.7 2.4 81.1
Other comprehensive income:
Exchange differences on
translation of foreign operations 6.8 (0.1) 6.7
Total other comprehensive
income 6.8 (0.1) 6.7
------------------------------------- ------- -------------- ---------
Total comprehensive income
for the period 85.5 2.3 87.8
Dividends to equity holders (12.7) (0.6) (13.3)
Acquisition of non-controlling
interest 0.1 (1.3) (1.2)
Non-controlling interest
arising on acquisition - (0.1) (0.1)
Balance at 29 July 2017 625.1 26.9 652.0
------------------------------------- ------- -------------- ---------
Condensed Consolidated Statement of Changes in Equity (continued)
For the 26 weeks to 30 July 2016
Total Equity
Foreign Attributable
Ordinary Currency To Equity
Share Share Retained Translation Other Holders
Capital Premium Earnings Reserve Equity Of
GBPm GBPm GBPm GBPm GBPm The Parent
GBPm
Balance at 30
January 2016 2.4 11.7 378.9 (7.5) (3.1) 382.4
Profit for the
period - - 58.1 - - 58.1
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - 7.0 - 7.0
Total other comprehensive
income - - - 7.0 - 7.0
--------------------------- ----------- ---------- ----------- -------------- --------- --------------
Total comprehensive
income for the
period - - 58.1 7.0 - 65.1
Dividends to
equity holders - - (12.1) - - (12.1)
Put options held
by non-controlling
interests - - - - 0.4 0.4
Acquisition of
non-controlling
interest - - (3.8) - - (3.8)
Non-controlling
interest arising - - - - - -
on acquisition
Balance at 30
July 2016 2.4 11.7 421.1 (0.5) (2.7) 432.0
--------------------------- ----------- ---------- ----------- -------------- --------- --------------
Total Equity
Attributable Non-
To Controlling Total
Equity Holders Interest Equity
Of The Parent GBPm GBPm
GBPm
Balance at 30 January
2016 382.4 18.4 400.8
Profit for the period 58.1 1.9 60.0
Other comprehensive
income:
Exchange differences
on translation of foreign
operations 7.0 3.1 10.1
Total other comprehensive
income 7.0 3.1 10.1
-------------------------------- ----------------- -------------- ---------
Total comprehensive
income for the period 65.1 5.0 70.1
Dividends to equity
holders (12.1) - (12.1)
Put options held by
non-controlling interests 0.4 - 0.4
Acquisition of non-controlling
interest (3.8) 3.8 -
Non-controlling interest
arising on acquisition - 0.9 0.9 Balance at 30 July 2016 432.0 28.1 460.1 -------------------------------- ----------------- -------------- ---------
Condensed Consolidated Statement of Cash Flows
For the 26 weeks ended 29 July 2017
26 weeks 26 weeks 52 weeks
to 29 to to
July 30 July 28 January
2017 2016 2017
GBPm GBPm GBPm
Cash flows from operating
activities
Profit for the period 81.1 60.0 184.6
Income tax expense 21.6 17.4 53.8
Financial expenses (0.9) 0.6 2.2
Financial income 0.3 (0.4) (0.8)
Depreciation and amortisation
of non-current assets 33.9 30.3 62.4
Forex (gains) / losses on
monetary assets and liabilities (1.3) 4.6 (5.4)
(Profit) / loss on disposal
of non-current assets (0.6) 0.1 0.3
Impairment of fixed assets 1.5 0.7 6.4
Increase in inventories (65.9) (27.9) (21.2)
Increase in trade and other
receivables (19.6) (33.9) (4.6)
Increase in trade and other
payables 62.4 36.7 43.9
Interest paid 0.9 (0.6) (2.2)
Income taxes paid (32.5) (15.0) (40.1)
------------------------------------- ------------- --------- ------------
Net cash from operating
activities 80.9 72.6 279.3
------------------------------------- ------------- --------- ------------
Cash flows from investing
activities
Interest received (0.3) 0.4 0.8
Proceeds from sale of non-current
assets 6.6 1.5 2.4
Investment in software development (1.3) (1.3) (3.8)
Acquisition of property,
plant and equipment (70.9) (23.1) (77.2)
Acquisition of non-current
other assets (4.1) (3.0) (6.9)
Acquisition of subsidiaries,
net of cash acquired (1.7) (25.7) (138.6)
Net cash used in investing
activities (71.7) (51.2) (223.3)
------------------------------------- ------------- --------- ------------
Cash flows from financing
activities
Repayment of interest-bearing
loans and borrowings (15.9) (0.1) (3.2)
Repayment of finance lease
liabilities (0.2) - (0.1)
Drawdown of finance lease 3.3 - -
liabilities
Drawdown of syndicated bank - 7.1 -
facility
Subsidiary shares repurchased
and held as treasury shares - - (14.8)
Equity dividends paid - - (14.5)
Dividends paid to non-controlling
interest in subsidiaries (0.6) - (0.7)
------------------------------------- ------------- ---------- ------------
Net cash (used in) / provided
by financing activities (13.4) 7.0 (33.3)
------------------------------------- ------------- ---------- ------------
Net increase in cash and
cash equivalents (4.2) 28.4 22.7
Cash and cash equivalents
at the beginning of the
period 234.4 209.9 209.9
Foreign exchange gains on
cash and cash equivalents 0.5 1.7 1.8
------------------------------------- ------------- ---------- ------------
Cash and cash equivalents
at the end of the period 230.7 240.0 234.4
------------------------------------- ------------- ---------- ------------
Analysis of Net Cash
At At
28 January Non-cash 29 July
2017 Cash movements 2017
GBPm flow GBPm GBPm
GBPm
Cash at bank and
in hand 247.6 15.6 0.5 263.7
Overdrafts (13.2) (19.8) - (33.0)
------------------------------ ------------ -------- ------------ ---------
Cash and cash equivalents 234.4 (4.2) 0.5 230.7
------------------------------ ------------ -------- ------------ ---------
Interest bearing
loans and borrowings:
Bank loans (19.1) 15.7 - (3.4)
Finance lease liabilities (1.0) (3.1) - (4.1)
Other loans (0.7) 0.2 - (0.5)
Total interest bearing
loans and borrowings (20.8) 12.8 - (8.0)
------------------------------ ------------ -------- ------------ ---------
213.6 8.6 0.5 222.7
------------------------------ ------------ -------- ------------ ---------
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 29 July 2017 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 12 September 2017.
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 28 January 2017 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 29 July 2017 and 30 July 2016 has been reviewed and the independent review report for the 26 week period to 29 July 2017 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 28 January 2017.
The Group continues to monitor the potential impact of other new standards and interpretations which have been or may be endorsed and require adoption by the Group in future reporting periods.
IFRS 9 'Financial Instruments' has been endorsed and will be applicable after 1 January 2018. This standard will simplify the classification of financial assets for measurement purposes, but it is not anticipated to have a significant impact on the financial statements.
IFRS 15 'Revenue from Contracts with Customers' has been endorsed and will be applicable after 1 January 2018. The Group is currently undertaking an impact assessment of the likely effect on the Group's consolidated results and financial position. It is not currently anticipated to have a significant impact on the 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. IFRS 16 is also expected to have a material impact on key components within the Consolidated Income Statement as operating lease rental charges will be replaced with depreciation and finance costs. The Group is currently undertaking an impact assessment of the likely effect 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.
Alternative performance measures
The Directors measure the performance of the Group based on a range of financial measures, including measures not recognised by EU-adopted IFRS. These alternative performance measures may not be directly comparable with other companies' alternative performance measures and the Directors do not intend these to be a substitute for, or superior to, IFRS measures. Further information can be found in the Glossary at the end of these interim results.
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 28 January 2017.
Risks and uncertainties
The Board has considered the risks and uncertainties for the remaining 27 week period to 3 February 2018 and determined that the risks presented in the Annual Report and Accounts 2017, noted below, remain relevant:
-- Key suppliers and brands -- Protection of intellectual property -- Retail property factors -- Seasonality of sales -- Economic factors -- Reliance on non-UK manufacturers -- Brexit -- Reliance on IT systems -- Cyber security -- 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 'Operating Segments' requires the Group's 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 operating and 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, JD Sports Fashion Holdings Aus Pty (including subsidiary companies), 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, Clothingsites.co.uk Limited, Ark Fashion Limited, 2Squared Agency Limited, 2Squared Retail Limited and Mainline Menswear Limited.
-- Outdoor - includes the results of Blacks Outdoor Retail Limited, Tiso Group Limited (including subsidiary companies) and Go Outdoors Topco 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 GBPnil (2016: GBP7.1m) and liabilities for taxation of GBP31.2m (2016: GBP17.7m) 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 29 July 2017 is reported below:
Income statement
Sports
Fashion Outdoor Total
GBPm GBPm GBPm
Gross revenue 1,170.6 196.6 1367.2
Intersegment revenue - - -
--------- ---------- --------
Revenue 1,170.6 196.6 1,367.2
--------- ---------- --------
Operating profit
before exceptional
items 103.2 0.1 103.3
Exceptional items - - -
--------- ---------- --------
Operating profit 103.2 0.1 103.3
Financial income 0.3
Financial expenses (0.9)
--------- ---------- --------
Profit before tax 102.7
Income tax expense (21.6)
--------- ---------- --------
Profit for the
period 81.1
--------- ---------- --------
Total assets and liabilities
Sports Outdoor Unallocated Eliminations Total
Fashion GBPm GBPm GBPm GBPm
GBPm
Total assets 1,131.5 285.2 - (89.6) 1,327.1
Total liabilities (533.8) (199.7) (31.2) 89.6 (675.1)
--------- -------- ------------ ------------- --------
Total segment
net assets
/ (liabilities) 597.7 85.5 (31.2) - 652.0
--------- -------- ------------ ------------- --------
The comparative segmental results for the 26 weeks to 30 July 2016 are as follows:
Income statement
Sports
Fashion Outdoor Total
GBPm GBPm GBPm
Gross revenue 897.5 73.1 970.6
Intersegment revenue - - -
--------- ---------- ------------
Revenue 897.5 73.1 970.6
--------- ---------- ------------
Operating profit
/ (loss) before
exceptional items 79.9 (2.3) 77.6
Exceptional items - - -
--------- ---------- ------------
Operating profit
/ (loss) 79.9 (2.3) 77.6
Financial income 0.4
Financial expenses (0.6)
--------- ---------- ------------
Profit before tax 77.4
Income tax expense (17.4)
--------- ---------- ------------
Profit for the
period 60.0
--------- ---------- ------------
Total assets and liabilities
Sports Outdoor Unallocated Eliminations Total
Fashion GBPm GBPm GBPm GBPm
GBPm
Total assets 922.7 68.7 0.2 (72.6) 919.0
Total liabilities (397.5) (109.0) (25.0) 72.6 (458.9)
--------- ---------- ------------ ------------- --------
Total segment
net assets
/ (liabilities) 525.2 (40.3) (24.8) - 460.1
--------- ---------- ------------ ------------- --------
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 to
29 July 30 July
2017 2016
GBPm GBPm
UK 903.4 712.1
Europe 399.6 245.0
Rest of
world 64.2 13.5
------------- --------- ---------
1,367.2 970.6
--------- --------- ---------
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
29 July 30 July
2017 2016
GBPm GBPm
UK 290.5 169.8
Europe 200.8 110.3
Rest of world 19.4 2.0
---------------- --------- ---------
510.7 282.1
--------------- --------- ---------
3. Exceptional Items
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2017 2016 2017
GBPm GBPm GBPm
Impairment of goodwill,
brands and fascia names
(1) - - 6.4
Administrative expenses
- exceptional - - 6.4
Total exceptional items - - 6.4
--------------------------- ------------ ------------ -------------
(1) The charge in the period to 28 January 2017 relates to the non-cash impairment of the fascia name balance arising in prior years on the acquisition of ActivInstinct Limited, the fascia name arising in the year on the acquisition of Aspecto Holdings Limited and Infinities Retail Group Holdings Limited and the impairment of the goodwill arising in the year on the acquisition of 2Squared Agency Limited.
These 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 29 July 2017 is based on the profit for the period attributable to equity holders of the parent of GBP78.7m (26 weeks to 30 July 2016: GBP58.1m; 52 weeks to 28 January 2017: GBP178.9m).
The weighted average number of ordinary shares outstanding during the 26 weeks to 29 July 2017 was therefore 973,233,160 (26 weeks to 30 July 2016 restated: 973,233,160; 52 weeks to 28 January 2017: 973,233,160), calculated as follows:
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2017 2016 2017
(restated)
Issued ordinary shares
at beginning and end of
period 973,233,160 973,233,160 973,233,160
------------------------------- ------------ ------------- -------------
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
29 July 30 July 28 January
2017 2016 2017
(restated)
GBPm GBPm GBPm
Profit for the period
attributable to equity
holders of the parent 78.7 58.1 178.9
Exceptional items excluding
loss on disposal of non-current
assets - - 6.4
Tax relating to exceptional - - -
items
Profit for the period
attributable to equity
holders of the parent
excluding exceptional
items 78.7 58.1 185.3
--------------------------------------- ---------- ------------- -------------
Adjusted basic and diluted
earnings per ordinary
share 8.09p 5.97p 19.04p
--------------------------------------- ---------- ------------- -------------
Acquisitions
Current period acquisitions
During the period, the Group has increased its shareholding in two subsidiaries. These transactions were not material.
Prior 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 period in which measurement adjustments could be made has now closed on this acquisition and the final goodwill calculation is summarised below:
Measurement Fair value
Book value adjustments at
GBPm GBPm 29 July
2017
GBPm
Acquiree's net assets at
acquisition date:
Property, plant & equipment 3.9 - 3.9
Inventories 23.4 5.2 28.6
Cash and cash equivalents 0.1 - 0.1
Trade and other payables (8.4) (2.1) (10.5)
Provisions - (3.1) (3.1)
Net identifiable assets 19.0 - 19.0
------- -------------- -------------
Goodwill on acquisition -
------- -------------- -------------
Consideration paid - satisfied
in cash 19.0
------- -------------- -------------
The Board believes that the cash consideration of EUR26.5 million represents the best estimates of the fair value of the net assets acquired. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017.
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 period in which measurement adjustments could be made has now closed on this acquisition and the final goodwill calculation is summarised below:
Measurement Fair value
Book value adjustments at
GBPm GBPm 29 July
2017
GBPm
Acquiree's net assets at
acquisition date:
Intangible assets 0.8 0.3 1.1
Property, plant & equipment 0.4 - 0.4
Other non-current assets 0.2 - 0.2
Inventories 2.0 - 2.0
Deferred tax liabilities - (0.3) (0.3)
Net identifiable assets 3.4 - 3.4
------ ------------- -----------
Goodwill on acquisition -
------ ------------- -----------
Consideration paid - satisfied
in cash 3.4
------ ------------- -----------
The Board believes that the excess of cash consideration of MYR 20.7 million represents the best estimates of the fair value of the net assets acquired. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017.
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 ("SportIberica") for cash consideration of EUR4.2 million with additional consideration of up to EUR0.5 million payable if certain criteria were met. At acquisition, management believed that the criteria would be met for the maximum consideration to be payable and the fair value of the total consideration at that time of EUR4.7 million was recognised. The actual amount of additional consideration paid in the period ended 29 July 2017 was EUR0.3 million reducing the total consideration paid to EUR4.5 million. This has been reflected in the table below.
The period in which measurement adjustments could be made has now closed on this acquisition and the final goodwill calculation is summarised below:
Measurement Fair value
Book value adjustments at
GBPm GBPm 29 July
2017
GBPm
Acquiree's net assets at
acquisition date:
Property, plant & equipment 0.2 0.1 0.3
Inventories 2.8 0.4 3.2
Cash 0.7 - 0.7
Trade and other receivables 0.9 (0.8) 0.1
Income tax assets - 0.1 0.1
Trade and other payables (1.5) (0.2) (1.7)
Interest bearing loans and
borrowings (0.7) - (0.7)
Net identifiable assets 2.4 (0.4) 2.0
------ -------------- -------------
Non-controlling interest (0.5) 0.1 (0.4)
Goodwill on acquisition 1.6
------ -------------- -------------
Consideration paid - satisfied
in cash 3.2
------ -------------- -------------
The measurement adjustments reflected in the table above were made to the fair values during the period ended 29 July 2017.
The Board believes that the excess of cash consideration paid over net identifiable assets on acquisition of GBP1.6 million is best considered as goodwill on acquisition representing anticipated future operating synergies.
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 and has also advanced $2.4 million AUD to allow it to settle an element of its indebtedness.
The Board believes that the cash consideration of $6.6 million represents the current best estimates of the fair value of the net assets acquired. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017.The provisional goodwill calculation is summarised below:
Measurement Provisional
Book value adjustments fair value
GBPm GBPm at
29 July
2017
GBPm
Acquiree's net assets at
acquisition date:
Intangible assets 4.8 2.8 7.6
Property, plant & equipment 5.2 0.6 5.8
Inventories 9.4 0.9 10.3
Cash 0.5 0.1 0.6
Trade and other receivables 2.7 0.1 2.8
Income tax assets 0.2 - 0.2
Deferred tax liabilities 1.5 (2.1) (0.6)
Trade and other payables (11.9) (1.1) (13.0)
Interest bearing loans and
borrowings (8.0) (0.8) (8.8)
Net identifiable assets 4.4 0.5 4.9
------- -------------- --------------
Non-controlling interest (0.9) (0.1) (1.0)
Goodwill on acquisition -
------- -------------- --------------
Consideration paid - satisfied
in cash 3.5
Consideration as loan owed
to NCI 0.4
------- -------------- --------------
Total consideration 3.9
------- -------------- --------------
Go Outdoors Topco Limited
On 27 November 2016, the Group acquired 100% of the issued ordinary share capital of Go Outdoors Topco Limited ('Go Outdoors') for consideration of GBP112.3 million with the Group assuming net debt of GBP11.4 million as part of the transaction. Go Outdoors is a nationwide omnichannel retailer catering for the outdoor enthusiast and specialist alike with 58 stores across the UK at acquisition, the majority of which are situated in out of town retail parks.
Included within the fair value of net identifiable assets on acquisition are intangible assets of GBP66.7 million; GBP59.1 million representing the 'GO Outdoors' fascia name and GBP7.6 million of brands.
The Board believes that the excess of cash consideration paid over net identifiable assets on acquisition of GBP44.4 million is best considered as goodwill on acquisition representing the strategic benefit of a larger Outdoor operation in the Group. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017. The provisional goodwill calculation is summarised below:
Measurement Provisional
Book value adjustments fair value
GBPm GBPm at
29 July
2017
GBPm
Acquiree's net assets at
acquisition date:
Intangible assets 0.3 66.4 66.7
Property, plant & equipment 28.5 (2.5) 26.0
Inventories 40.4 - 40.4
Cash 8.8 - 8.8
Trade and other receivables 7.3 - 7.3
Trade and other payables (48.2) (0.6) (48.8)
Income tax liabilities (1.0) - (1.0)
Deferred tax liabilities - (11.3) (11.3)
Interest bearing loans and
borrowings (20.2) - (20.2)
Net identifiable assets 15.9 52.0 67.9
------- -------------- --------------
Goodwill on acquisition 44.4
------- -------------- --------------
Consideration paid - satisfied
in cash 112.3
------- -------------- --------------
Aspecto Holdings Limited
On 18 July 2016, the Group, via its new 100% subsidiary Napco 104 Limited acquired 100% of the entire issued share capital of Aspecto Holdings Limited for cash consideration of GBP1. The Board believes that the cash consideration of GBP1 represents the current best estimates of the fair value of the net assets acquired. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017.
On 21 August 2016, the trade and assets (with the exception of certain assets and liabilities) were hived up into Tessuti Limited, a 100% owned subsidiary of JD Sports Fashion Plc.
Infinities Retail Group Limited
On 12 September 2016, the Group, via its new 100% subsidiary Ensco 1157 Limited acquired 100% of the entire issued share capital of Infinities Retail Group Limited for cash consideration of GBP1. The Board believes that the cash consideration of GBP1 represents the current best estimates of the fair value of the net assets acquired. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017.
On 31 October 2016, the trade and assets (with the exception of certain assets and liabilities) were hived up into Tessuti Limited, a 100% owned subsidiary of JD Sports Fashion Plc.
Clothingsites.co.uk Limited
On 26 September 2016, the Group, via its new 100% subsidiary Ensco 1173 Limited acquired 100% of the entire issued share capital of Clothingsites.co.uk Limited for an initial cash consideration of GBP1. Clothingsites.co.uk Limited operates two trading websites, Woodhouse Clothing and Brown Bag Clothing. The Board believes that the excess of cash consideration paid over net identifiable assets on acquisition of GBP2.4 million represents the fair value of the 'Woodhouse Clothing' and 'Brown Bag' online fascia names. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017.
2Squared Agency Limited & 2Squared Retail Limited ('2Squared')
On 30 November 2016, the Group acquired 69% of the issued share capital of 2Squared Agency Limited and 51% of the issued share capital of 2Squared Retail Limited for cash consideration of GBP0.5 million. The Board believed that the excess of cash consideration paid over the net identifiable assets on acquisition of GBP1.0 million was best considered as goodwill representing future operating synergies. The goodwill was subsequently impaired during the financial period ended 28 January 2017. No measurement adjustments have been made to the fair values in the 26 week period ended 29 July 2017.
Other Acquisitions
During the prior period, the Group made several small acquisitions, including increasing its shareholding to 100% in two subsidiaries which were previously non-wholly owned. These transactions were not material.
5. 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 2017. 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.
Glossary (terms are listed in alphabetical order)
Not all of the figures and ratios used are readily available from the unaudited preliminary results included in the announcement. The Directors believe that these non-GAAP measures are both useful and necessary to better understand the Group's results. Where required, a reconciliation to the statutory amounts is set out below.
Adjusted earnings per share
The calculation of basic and diluted earnings per share is detailed in Note 4. 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. A reconciliation between basic earnings per share and adjusted earnings per share is shown below:
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2017 2016 2017
(restated)
Basic earnings per share 8.09p 5.97p 18.38p
Exceptional items excluding loss
on disposal of non-current assets - - 0.66p
Tax relating to exceptional items - - -
---------- ------------- -------------
Adjusted earnings per share 8.09p 5.97p 19.04p
---------- ------------- -------------
Core
The Group's core Sports Fashion fascia is JD and the Group's core market is the UK and Republic of Ireland.
EBITDA
Earnings (operating profit) before tax, interest, depreciation and amortisation.
LFL (Like for Like) sales
The percentage change in the year-on-year sales, removing the impact of new store openings and closures in the current or previous financial year.
Profit before tax and exceptional items
A reconciliation between profit before tax and profit before tax and exceptional items is as follows:
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2017 2016 2017
GBPm GBPm GBPm
Profit before tax 102.7 77.4 238.4
Exceptional items - - 6.4
----------- ----------- -------------
Profit before tax and exceptional
items 102.7 77.4 244.8
----------- ----------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFDFAFFWSESU
(END) Dow Jones Newswires
September 12, 2017 02:00 ET (06:00 GMT)
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