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.

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.

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.

Recommended

Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021
Share tips of the week – 17 September
Share tips

Share tips of the week – 17 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Sep 2021
Royal Mail will deliver for investors – here's how to play it
Trading

Royal Mail will deliver for investors – here's how to play it

Royal Mail Group has found its feet in the past 18 months and looks cheap. Matthew Partridge looks at how to trade the shares.
14 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021