Initial losses from the acquisition of Blacks Leisure led to a substantial slide in JD Sports' first-half profits, but the turnaround of the outdoor activities retailer looks on track, while performance from the group's core sports goods shops is encouraging.
The Black stores, which accounted for 9 per cent of first-half revenue, racked up a £10m loss during the six months. Of that loss, £9m came in the first three months of the year when, fresh from administration, the business was suffering from severe stock problems and high costs. Following the closure of 97 stores leaving it with 198, breakeven is expected in the second half, and Blacks-owned brands such as Peter Storm have been performing strongly.
JD's sports shops have traded well and reported a 15 per cent increase in sales to £371m, two-thirds of the total, helped by a 1.2 per cent like-for-like improvement. Since the half year-end, the unit's underlying sales have risen 3.2 per cent. Unfortunately, the group's fashion-orientated shops, which generated 12 per cent of revenue, have not fared so well with like-for-like sales dropping 6 per cent in the past six weeks following a 0.7 per cent increase in the first half.
Broker Seymour Pierce expects full-year profits of £68m and EPS of 97.1p (from 105.9p in 2012).
| JD Sports Fashion (JD.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 715p | MARKET VALUE: | £348m | |
| TOUCH: | 710-720p | 12-MONTH HIGH: | 885p | LOW: 560p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 420p* | NET DEBT: | 1% | |
| Half-year to 28 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 440 | 20.1 | 28.5 | 4.1 |
| 2012 | 556 | 2.9 | 2.7 | 4.3 |
| % change | +26 | -86 | -90 | +5 |
Ex-div: 28 Nov Payment: 4 Jan *Includes intangible assets of £101m, or 207p a share | ||||
