Join our community of smart investors

Fashion fumble at JD Sports

RESULTS: JD Sports finished the year ahead of City forecasts, but performance is being held back by weakness in the fashion category
April 15, 2014

Earnings at JD Sports (JD.) finished the year 8 per cent ahead of analysts' forecasts, thanks to a sterling performance from the sports division that offset a lacklustre showing from the fashion category.

IC TIP: Hold at 1628p

Indeed, pre-tax profit before £19m of exceptional property, restructuring and impairment costs jumped 27 per cent to £77m. That reflected a 6.7 per cent rise in underlying sales in the core UK and Ireland sports categories and a robust performance in the overseas business, where JD opened new stores in France and Spain and acquired businesses in Holland and Germany.

Outdoors brands Blacks and Millets, meanwhile, managed to break even in the second half, compared to a £4.9m loss in the previous year's second half. Integrating these businesses has led to some disruption, however, but that has also lowered costs and helped create a better growth platform. JD has further built its presence in the outdoors category by acquiring struggling brand, Tiso. Still, losses in fashion swelled to £6.4m from £1.7m, driven by poor trading at Bank, although a new managing director is spearheading a turnaround plan.

Investec expects adjusted pre-tax profit of £81.3m in 2015, giving EPS of 124.6p (from £77m and 117.1p in 2014).

JD SPORTS (JD.)
ORD PRICE:1,628pMARKET VALUE:£793m
TOUCH:1,612-1,644p12-MONTH HIGH:1,710pLOW: 710p
DIVIDEND YIELD:1.7%PE RATIO:20
NET ASSET VALUE:533p*NET CASH:£45.3m

Year to 1 FebTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20100.7761.488.218
20110.8878.6115.023
20121.0667.496.325.3
20131.2655.179.726.3
20141.3357.982.527.1
% change+6+5+4+3

Ex-div: 7 May

Payment: 4 Aug

*Includes intangible assets of £104.3m, or 214p a share