JD turns on the style

Even after a busy year on the acquisition front, JD was able to nearly triple its net cash position and push through a bumper dividend increase. The group spent £15.8m on acquisitions, including rugby brands Canterbury and Kooga, as well as sports shoe specialist Chausport in France for £7.9m. The plan is to gradually introduce JD Sports own lines across the 75 strong chain, as well as investing heavily in its fascias. The makeover of its Bank fashion outlets is also ongoing so, after falling by a fifth this year to £22.9m, capital expenditure is expected to pick up again.

However, the increased investment could well be worth the effort, if the strong performance of JD's sports fascias is anything to go by. Over £38m has been spent doing up the sports outlets over the past two years, including 17 major store refurbishments and 14 new openings in the past year. That translated into a 10 per cent increase in total sales for the division, including a £27.7m contribution from Chausport. But a 2.3 per cent like-for-like increase was respectable in a tough market, and improvements to the stores was partly responsible for a better than expected 18 per cent increase in pre-exceptional operating profit achieved by the sports fascias.

Management said that trading in the 10 weeks since the year-end had been encouraging, with UK like-for-like sales up 2 per cent, although it remains wary of "fiscal threats to consumers' expenditure". Broker Investec Securities expects pre-exceptional pre-tax profits of £71m and EPS of 101.3p in the year to January 2011 (£67.4m and 96.3p in 2010).

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