JD Sports profits leap 22%

Runaway results in the group's sports fashion division are slowed slightly by the continuing losses in its Blacks and Millets outdoor business.

by Adam Gale
Last Updated: 15 Apr 2015

Could it be that Britain is finally getting off its backside and doing some exercise? Probably not, but that didn’t stop sports fashion business JD Sports from sprinting away with £100m in profits before tax and exceptional items in 2014 – 22% up from the year before. At least we want to look like we’re exercising…

Revenues at the group rose 25% too over the year to 31 January, to £1.4bn. JD Sports executive chairman Peter Cowgill put it down to a strong festive period in the core business. Apparently at lot of people received trainers on Christmas morning.

Cowgill also put forward another reason, which may have pricked some ears at rival Sports Direct. ‘We believe that our collaborative approach to working with third party brands to create a unique, premium and often exclusive offer is a major contributor to our success,’ said Cowgill. ‘We have the utmost respect for the brands that we sell and believe in working in partnership with them to achieve their ambitions.’

So far, so corporate. But when you consider Sports Direct chairman Keith Hellawell recently admitted to a select committee hearing that his company withheld payment from certain suppliers as a negotiating tactic, it becomes clear JD is presenting itself as a very different creature when it comes to supplier relations.

In truth, JD’s strong full year results obscure an uneven performance across the year. Though its second half profits were still an impressive £80m, that’s ‘only’ 11% up on the same period last year. Profits had doubled in the first half, though admittedly that’s not really when the group makes its money.

That notwithstanding, the results are certainly positive. Even the struggling outdoors division is struggling less. JD Sports bought Blacks and Millets out of administration in 2012, and says it’s on track for profitability next year. Last year it made a loss of £4.9m, down from £8.8m, and JD admitted the figure would have been better had it not been for the warm winter.

The Group also made a loss of £6.3m when it ‘reluctantly’ disposed of fast fashion brand Bank in November, but the overall story is one of expansion. It added 48 stores net over the year, bringing the total to 844. Much of the expansion was in continental Europe – 19 new sports fashion stores opened there, bringing the total to 70.

Investors welcomed the news. Shares rose 5.1% this morning to 535p – enough, surely, to get anyone out of bed.

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