Blacks acquisition dents profits at JD Sports

JD Sports Fashion, the High Street sports clothing and footwear chain, saw revenues surge by almost a fifth last year but the bottom line was hit by wider losses from Blacks Leisure which was acquired last year.

Profit before tax and exceptional items fell by 20.4% from £75.96m to £60.47m in the year to February 2nd with the Outdoor division, which accounts for the Blacks and Millets chains, delivering an operating loss of £14.9m.

Blacks Leisure was saved from administration in January 2012 and JD has been trying to turn around the business over the past year as it deals with "a very limited and unbalanced stock position", an overrented store portfolio and a disproportionate central cost base.

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The company cut the number of stores over the year from 295 to just 122, with a further five having closed since the year end. It expects losses to reduce during the current financial year.

Group revenues totalled £1,259m, up 18.8% from the £1,060m the year before. Blacks contributed £121m of sales, compared with just £5.9m for the short three-week post-acquisition period the year before.

A further £54.8m of revenue was generated from other acquired businesses, while £20.6m of sales were lost from the disposal of the Canterbury business.

The firm's core division, Sports Fascia, which covers the JD, Size?, Chausport, Sprinter and Champion Sports brands, saw total revenues rise 10.2% to £854m with like-for-like sales growth accelerating in the second half.

"The core Sports fascias in the UK continue to produce excellent results and provide the group with a very solid foundation for ongoing profitability and cash generation," said Executive Chairman Peter Cowgill.

The Fashion Fascias division, made up of the Bank, Scotts, Cecil Gee, Originals and Tessuti brands, grew revenue by 5.8% to £160.4m.

"Whilst the board recognises that recent acquisition activity has impacted on short term returns, it remains confident that the group is well positioned to deliver earnings growth and increased shareholder returns over the longer term," Cowgill said.

Net cash at the end of the period totalled £45.64m, down from £60.30m the year before. The final dividend was raised by 3.8% to 22p, taking the total dividend to 26.3p, up 4.0% year-on-year.