TIDMJD.
RNS Number : 5180C
JD Sports Fashion Plc
17 April 2013
17 April 2013
JD SPORTS FASHION PLC
PRELIMINARY RESULTS
FOR THE 53 WEEKS ENDED 2 FEBRUARY 2013
JD Sports Fashion Plc (the "Group"), the leading retailer and
distributor of branded sportswear, fashionwear and outdoor clothing
and equipment today announces its Preliminary Results for the 53
weeks ended 2 February 2013.
2013 2012 % Change
GBP000 GBP000
Revenue 1,258,892 1,059,523 +18.8%
Gross profit % 48.7% 49.2%
Operating profit (before exceptional items) 61,323 76,461 -19.8%
Profit before tax and exceptional items 60,465 75,957 -20.4%
Profit before tax 55,117 67,442 -18.3%
Basic earnings per ordinary share 79.71p 96.27p -17.2%
Adjusted basic earnings per ordinary share
(see note 4) 88.51p 105.89p -16.4%
Total dividend payable per ordinary share 26.30p 25.30p +4.0%
Net cash at end of period (a) 45,636 60,295
a) Net cash consists of cash and cash equivalents together with
interest-bearing loans and borrowings.
Group Highlights
-- Ongoing robust performance in core Sports fascias which
continue to provide investment platform for future profitability in
JD in Europe. In the UK and Ireland, these fascias contributed an
additional GBP4.7m of operating profits in the year (before
exceptional items) and we are building an appropriate store base in
Europe for future success there.
-- The good performance in the Sports fascias has continued in
the current financial year with like for like sales growth in the
UK and Ireland stores (excl Champion) of 1.9% in the 9 weeks to 6
April 2013.
-- GBP14.9 million of operating losses (before exceptional
items) incurred in Outdoor fascias but performance improving now
that new management team has been installed with stocks being
better managed, store investment commenced and ongoing cost
reduction programme to deliver benefits in the current financial
year. Like for like sales in Outdoor in the current financial year
have benefitted significantly both from the recent sustained cold
weather and a sustained clearance programme from January through to
March.
-- Sales, gross margin and operating profit before exceptional
items of the four business segments are tabulated below:
Period to 2 February Sport Fashion Outdoor
2013 Retail Retail Retail Distribution Total
GBP000 GBP000 GBP000 GBP000 GBP000
Gross revenue 854,282 160,442 121,006 130,342 1,266,072
Intersegment revenue (287) - - (6,893) (7,180)
--------- ---------- ----------- --------------- ----------
Revenue 853,995 160,442 121,006 123,449 1,258,892
--------- ---------- ----------- --------------- ----------
Gross margin % 50.6% 47.4% 47.3% 36.8% 48.7%
--------- ---------- ----------- --------------- ----------
Operating profit
before exceptional
items 77,791 (2,004) (14,906) 442 61,323
--------- ---------- ----------- --------------- ----------
Period to 28 January Sport Fashion Outdoor
2012 Retail Retail Retail Distribution Total
GBP000 GBP000 GBP000 GBP000 GBP000
Gross revenue 774,991 151,642 5,876 135,117 1,067,626
Intersegment revenue (380) - - (7,723) (8,103)
--------- -------- ---------- --------------- ----------
Revenue 774,611 151,642 5,876 127,394 1,059,523
--------- -------- ---------- --------------- ----------
Gross margin % 50.8% 48.5% 46.2% 37.7% 49.2%
--------- -------- ---------- --------------- ----------
Operating profit
before exceptional
items 74,301 3,303 (2,199) 1,056 76,461
--------- -------- ---------- --------------- ----------
-- Like for like sales for the 53 week period in the UK and
Ireland combined core retail fascias increased by 1.2%:
Sport UK & Combined
Ireland Fashion Core
(excl Champion) (excl Premium) UK & Ireland
+2.5% -4.1% +1.2%
-- Final dividend payable increased by 3.8% to 22.00p (2012:
21.20p) bringing the total dividends payable for the year to 26.30p
(2012: 25.30p) per ordinary share, an increase of 4.0%.
Peter Cowgill, Executive Chairman, said:
"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.
"We are pleased overall with the start that we have made to the
new year. A very considerable amount of reorganisation in both
Outdoor Retail and our warehousing and distribution operations is
now behind us and this should benefit trading in the balance of the
year.
"The Group is exceptionally well positioned with its retail
proposition, financial resources and extended management experience
to take advantage of opportunities both in the UK and
internationally. 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."
Enquiries:
JD Sports Fashion Plc Tel: 0161 767 1000
Peter Cowgill, Executive Chairman
Barry Bown, Chief Executive
Brian Small, Finance Director
MHP Communications Tel: 020 3128 8100
Andrew Jaques
Barnaby Fry
Ian Payne
Executive Chairman's Statement
Introduction
The year to January 2013 was one of substantial change for the
Group and it is worth reflecting on the key changes:
-- We entered the Outdoor market in January 2012 with the
purchase of the Blacks and Millets store portfolios from the
administrators of Blacks Leisure Group Plc. Although initial
results have been more disappointing than originally anticipated we
now have a firm foothold in a different and growing lifestyle
market in the UK. With our capacity for creating efficient and
appealing environments already evidenced through the stores which
we have refurbished, along with our capable support systems, we
remain optimistic that these Outdoor fascias will prove to be a
successful core retail operation.
-- We consolidated our warehousing into the new central
distribution facility in Rochdale, eliminating the capacity
constraints we previously had and reducing double handling of
stock. The new warehouse has subsequently absorbed both the
Christmas period and the transfer in the current year of the
Outdoor business from its facility in Northampton although there
are still improvements in efficiency to be achieved.
-- We have continued our expansion of the Sports Fascias in
France and Spain and are expecting to continue to add stores in
existing and new territories in 2013. Our product offer in Southern
Europe can be improved but we now have a greater understanding of
the key ingredients for success in Europe. We expect to move into
other territories in Europe this year.
-- We have strengthened the Group's executive team in the last
six months with the appointment of Dave Williams as Group
Commercial Director and Pat Lee as Group Supply Chain and Change
Director. We have also invested significantly in our Multichannel
team.
-- We have committed to changing our legacy IT systems to
Oracle. We have already successfully implemented Oracle Financials
with the main retail system following through 2014 and 2015.
Although we have a number of short term challenges we believe we
are developing our infrastructure appropriately to support the
future anticipated growth of our businesses in all channels. This
investment in infrastructure also ensures that we protect the core
Sports fascias in the UK which continue to produce excellent
results and provide the Group with a very solid foundation for
ongoing profitability and future cash generation.
Strategic Developments
Retail remains the core focus for the Group and the strategic
developments and acquisitions which we have made in the period
reflect this focus.
We have continued the international development of our JD fascia
through further expansion in France and the opening of our first
stores in Spain. By 2 February 2013 we had 11 JD and Size? stores
in France with one further store opening to date in the new
financial period. We now feel that we are beginning to generate
some momentum in France. We will maintain this momentum with
further openings through 2013.
During the year we opened five JD stores in Spain including the
conversion of a pre-existing Sprinter store. One further store has
opened to date in the new financial year. Spain has proved a more
difficult market than France for JD to date and improvements need
to be made to both our product offer and price architecture
there.
We made our initial entry into the Premium Fashion sector in
2011 through the acquisition of eight Cecil Gee stores. We have
subsequently complemented this in the current year by making two
further small acquisitions (Tessuti Group and Originals) in this
sector. These acquisitions have given us additional critical mass
together with management knowledge, both of which were needed to
create a business in this sector which is capable of delivering
future profitability, supported by the Group's resource. The
combined business is now run by the management of Tessuti.
In recent years, the Group has steadily increased its stable of
owned and licensed sporting and fashion inspired brands. This
strategy has continued and in the year to January 2013 we acquired
rights to the Henleys, Fly 53 and Gio Goi brands at a cost of
GBP2.6 million, GBP0.4 million and GBP2.4 million respectively.
In Distribution, we have been pleased with the performance to
date of the Source Lab business in which we acquired an 85% holding
in May 2012 at a cost of GBP2.6 million. Source Lab's management
have proven experience of developing ranges of sport related
product and we believe we can use this experience to enhance the
return from the Group's stable of brands and other Sports inspired
businesses.
After the year end, we also acquired the intellectual property
and other assets associated with the Cloggs online footwear
business from its administrators for a cash consideration of
GBP0.6m. Cloggs is an online niche retailer of premium branded
footwear and so whilst its product offering is very complementary
it also gives us opportunities to extend our customer base and the
width of our offer.
We have also made significant investments in the year in two
projects which will not only support our current retail businesses
in future years but which will also have the capacity to deal with
growth both organically and by acquisition whether that be in the
UK or overseas. The first of these projects is our new centralised
warehouse in Kingsway, Rochdale which became fully operational in
Summer 2012 with substantially all stock for the UK and Ireland
retail fascias now channelled through this facility. The second
major project concerns the development of replacement of our legacy
bespoke commercial systems with Oracle Retail. This project is in
its early stages and we currently plan to bring the first of the
Group's businesses on to this system in 2014. Thereafter, the
retail businesses will be transferred in stages with all current
retail businesses anticipated to be working on the new system by
Autumn 2015.
Disposal of Canterbury
During the year we completed the disposal of the Canterbury
business to Pentland Group Plc for a total consideration of GBP22.7
million which represented a full repayment of the net cash
investment made by the Group into Canterbury since our acquisition
of the initial interest in August 2009.
Sports Fascias
The Sports Fascias are JD, Size?, Chausport, Sprinter and
Champion Sports.
The Sports Fascias' total revenue (after elimination of
inter-group sales) increased by 10.2% during the period to GBP854.0
million (2012: GBP774.6 million) with like for like sales growth of
2.5% (2012: +0.3%) in the core UK and Ireland sports fascia stores
(excl Champion). This represents a significant improvement on the
+1.2% that we announced in the results for the first half of the
year and is a very robust performance in the current economic
climate. It is clear that our largely unique product offering
combined with a well-executed retail environment is attractive to
the consumer. Our challenge is to ensure that these basic
principles are repeated in all of our retail fascias.
Gross margin achieved in the Sports Fascias decreased only
marginally to 50.6% (2012: 50.8%) which includes a full year of the
lower margin Sprinter and Champion businesses for the first
time.
Operating profit (before exceptional items) of the Sports
Fascias increased by GBP3.5 million to GBP77.8million (2012:
GBP74.3 million). Most pleasing was the increase of GBP4.7m in the
operating profit (before exceptional items) of the core JD
businesses in the UK and Ireland (including Size?) to GBP72.9
million (2012: GBP68.2 million).
The contribution from Chausport decreased to GBP0.6 million
(2012: GBP1.5 million). Although there was growth in like for like
sales of 0.7% (2012: 2.2%), this growth did not generate sufficient
margin to cover an increased investment in resource both in stores
and centrally.
The loss in the JD France business (including the Size store in
Paris which was opened in the year) increased marginally to GBP0.5
million (2012: loss of GBP0.2 million) as this business scales up.
The performance of our recently opened stores makes us increasingly
confident about the prospects for JD in France though and we would
hope to at least reach a break even position in the current
financial year although we are fully aware that we need to improve
our overall apparel offer, particularly in the South of the
country.
The Sprinter business, which we acquired in June 2011, had a
good year with profits maintained at GBP4.7 million (2012: GBP4.7
million for the 7 months post acquisition). This is an excellent
performance overall given the seasonally loss making five month non
like for like period at the start of the year and the increase in
the rate of VAT from 18% to 21% which came into effect on 1
September 2012. We remain pleased with this acquisition and believe
that the management team that we have in Spain are well equipped to
steer the business through the very difficult economic period that
the country is currently facing.
We opened our first JD stores in Spain in the year with our
limited openings to date already providing us with considerable
additional market knowledge which we are using to refine our offer.
However, we do not yet have any critical mass and given the ongoing
economic difficulties and increased fiscal take then we will remain
cautious in the short term in our approach to opening new stores in
Spain.
Champion made a minimal contribution to Operating Profit in the
year (2012: GBP0.1 million). However, given that this includes the
absorption of GBP0.8m of losses in the non like for like period at
the start of the year then the business performed well. Whilst
there are some short term operational changes which we can make
which will benefit the financial performance in the shorter term we
do not expect a more substantial improvement until the wider
economy in the Republic of Ireland picks up more strongly.
Fashion Fascias
The established Fashion Fascias of Bank and Scotts are now
complemented by a Premium Fashion business comprising Cecil Gee,
Originals and Tessuti.
The Fashion Fascias' total revenue (after elimination of
inter-group sales) increased by 5.8% during the period to GBP160.4
million (2012: GBP151.6 million). Like for like sales in the two
core fascias declined by 4.1% (2012: +2.2%) being Bank -4.9% (2012:
+3.9%) and Scotts -0.5% (2012: -2.9%).
Gross margin achieved in the Fashion Fascias declined from 48.5%
to 47.4%. This decline was caused by clearance activity in the
Cecil Gee business which was required to clear excess Spring /
Summer product. These stores, along with the Originals stores which
were acquired in the year, are now managed by the Tessuti
management team.
The Bank fascia sells largely branded fashion to both males and
females, predominantly for the teenage to mid-twenties sector. In
the year the store portfolio grew from 80 stores to 85 stores,
still based predominantly in the North and the Midlands. Whilst the
business made an operating loss (before exceptional items) in the
year of GBP0.5 million (2012: profit of GBP3.1 million) we are
encouraged by a number of factors with footfall maintained, a good
performance in Menswear and a slight enhancement of margins. With
the right product, we believe that Bank is capable of making a
contribution to Group operating profits again.
Our turnaround plan for Bank involves increased focus on the
female offer which is reflected in our recent recruitment of an
experienced Head of Women's although we will not see the benefits
of her product decision making until later in the current financial
year. We will also look to utilise our stable of owned and licensed
brands and improve our footwear offering. There will also be some
rationalisation of the central overhead base.
The Scotts fascia stores continue to offer branded fashion
authority to more affluent young males, largely in the North and
Midlands. Three stores were closed in the period with no new
openings resulting in 32 stores at the year end (2012: 35 stores).
Operating profit (before exceptional items) reduced by GBP0.7
million to GBP0.1 million (2012: GBP0.8 million) principally from a
reduction in gross margin. The fascia continues to serve a useful
purpose to the Group as an introducer of brands and provides
revenue for a legacy store portfolio.
Our combined Premium Fashion offering made an operating loss of
GBP1.5 million (2012: loss of GBP0.6 million) principally from
losses in the Cecil Gee stores which we understood to be loss
making when we made our initial entry into the Premium Fashion
market in June 2011. However, following our acquisition of the
Tessuti business in the year we believe that we have a management
team that has sector specific experience and is capable of
delivering a successful Premium Fashion proposition with a
consistency of retail standards and a geographically appropriate
brand offering. Dealing with the legacy issues in the business,
particularly property, will mean that we are unlikely to deliver
any meaningful profit from this activity in the short term.
Outdoor
Outdoor had an exceptionally difficult year resulting in it
delivering an operating loss (before exceptional items) of GBP14.9
million (2012: loss of GBP2.2 million for the short period post
acquisition).
On our acquisition of the business from administration in
January 2012 we inherited a very limited and unbalanced stock
position, with a particularly severe lack of stocks in many core
high performing lines combined with an excessively large and
overrented store portfolio and a disproportionate central cost
base. Our first priorities in turning around the business were to
deal with these issues. Agreeing and receiving a resumption of
supply from key suppliers was a difficult and time consuming
process. Consequently, it was three months before we started to
receive any substantial deliveries of new stocks. During this
period, the business made very substantial losses.
At acquisition we backed the incumbent management team, who only
came together in Autumn 2011, and gave them the opportunity to turn
the business round. However, it became clear through the year that
they did not have sufficient experience or knowledge of the Outdoor
market to take the business forward. This was reflected in the
proposition which they bought into for the key Autumn and Winter
seasons which required significant margin sacrifice to clear
through. We now have a new management team which includes both
external recruits and long serving members of the Group's team. We
will not see its full impact until later in the year but we believe
that we now have the right team and strategy to take the business
forward.
The initial strategy on retail fascia and property locations was
that we should retain only the Blacks fascia long term with a
portfolio of approximately 130 stores. However, during the year we
have increasingly realised that there is a place for Millets as it
has considerable support and goodwill amongst its customers and it
is a good outlet for our own brands (Peter Storm and Eurohike).
This two fascia strategy, with differentiated management, will
enable us to segment the product more appropriately and so we now
believe that we will retain approximately 140 stores in the longer
term of which approximately 80 will be fascia'ed as Blacks and 60
will be fascia'ed as Millets. The Blacks stores will primarily
stock more technical products from the premium brands at higher
price points with Millets catering for a more casual outdoor
customer.
During the year we closed 122 stores and opened one store to
give a store portfolio of 174 stores (2012: 295 stores). A further
five stores have closed since the year end. The negotiations with
the landlords on either new leases or temporary licences have also
been protracted as we have needed to negotiate rents which were
sustainable in the longer term. This assessment has been made
difficult because of the need for a major proposition overhaul.
However, this task is now well progressed. We have also refurbished
seven stores to date. This has provided us with valuable additional
knowledge which we will apply in future refurbishments. We are
encouraged by the performance of these stores in the period since
they reopened.
Keeping the smaller scale Blacks and Millets business in their
pre-existing office and warehouse facility at Northampton was not
economically viable. We have now closed the warehouse and moved the
distribution function in to the Group's new facility at Kingsway.
An exceptional charge of GBP0.9 million has been recognised in the
year for this restructuring of the distribution operations. We have
also integrated several back office functions into existing Group
teams. The migration of the remaining activity from Northampton to
Bury is proposed to take place through Summer 2013 and so we would
anticipate a further charge for restructuring in the new financial
year.
We believe that the various issues which Blacks has faced in the
year were a legacy of the administration process and the result of
previous mismanagement and we would anticipate a significant
reduction in the operating loss in the current financial year. We
will, of course, now be looking for the support of suppliers in
return for our efforts in elevating the desirability of their
brands in premium retail locations. With this support, we believe
that the decisive action we have taken to date and the strategy
which we have adopted will give us the foundation of a business
which is capable of delivering sustained operating profits in the
medium term.
Distribution
Our Distribution businesses contributed a small operating profit
of GBP0.4 million (2012: GBP1.1 million). This includes a profit of
GBP1.9 million from Canterbury in the seven months prior to its
disposal (2012: GBP0.4 million profit for the full year) with the
second half of the year traditionally loss making. A number of our
remaining Distribution businesses have had a difficult year
reflecting the downstream effect of ongoing challenging
circumstances in the Retail sector generally. We continue to review
the benefit of holding each of these investments which must be
capable of either delivering a significant profit in its own right
or give us some other tangible strategic benefit.
The Getthelabel.com online and catalogue business within
Topgrade has now been trading for over three years. Overall we are
pleased with the development of this business with sales increasing
in the year by 43% and losses more than halved to GBP0.7 million
(2012: GBP1.5 million). We anticipate further growth this year with
a further reduction in the losses. Operating profits within the
wholesale operation of Topgrade decreased slightly by GBP0.2
million to GBP0.6 million (2012: GBP0.8 million). The performance
of this element of the business is naturally volatile as it is very
dependent on the timing and general availability of clearance
packages from the major brands.
Focus has had a difficult year with an operating loss of GBP1.0
million (2012: profit GBP1.4 million) which is primarily from
losses which have arisen after the acquisition of the trade and
assets of the Fly 53 brand including 14 concessions in House of
Fraser stores. As with other businesses which we have acquired in
similar distressed circumstances the business was in a fractured
state on acquisition with a poor mix of stocks and an inappropriate
cost structure. We believe we have now resolved the majority of
these acquisition issues and would anticipate at least a
substantial reduction in these operating losses in the new
financial year.
Although revenues in Kukri have grown by GBP4.4 million to
GBP20.5 million (2012: GBP16.1 million) the business made an
operating loss of GBP0.1 million (2012: profit GBP0.5 million). In
the period after acquisition, Kukri has needed to make substantial
investment in new IT systems and other infrastructure to have the
potential to grow and ultimately deliver a meaningful return on our
investment. We believe that Kukri's current underperformance is
short term and that the brand is strong and can be leveraged in the
future.
Elsewhere in the distribution division, Deakins has maintained
its profitability and we are very pleased with the initial
performance of Source Lab. However, the disappointing performance
in Kooga has continued with losses increased to GBP1.0 million
(2012: GBP0.8 million).
Financials Summary
Revenue
Total revenue increased by 18.8% (almost GBP200 million) in the
year to GBP1,258.9 million (2012: GBP1,059.5 million) of which
GBP121.0 million of sales were generated from the full year of the
Blacks business (2012: GBP5.9 million for the three week period). A
further GBP54.8 million of revenue was generated either in
businesses acquired in the year or the annualisation of the other
businesses acquired in the year to January 2012. GBP20.6 million of
revenue was lost from the disposal of Canterbury.
Gross margin
Total Gross Margin fell from 49.2% to 48.7% reflecting the
impact of the margin sacrifice in the second half of the year in
the Outdoor business. The achieved margin in the Fashion Fascias
also fell by 1.1% to 47.4% (2012: 48.5%) with ongoing clearance
activity in the Premium Fashion businesses. We are, however,
greatly encouraged by the fact the margins in the Sports fascias
were largely maintained at prior year levels.
Operating profits
Operating profit (before exceptional items) decreased by GBP15.2
million to GBP61.3 million (2012: GBP76.5 million) principally due
to the full year loss in the Blacks business of GBP14.9 million
(2012: loss of GBP2.2 million for the three week period). We expect
these losses to be substantially reduced in the new financial
year.
After exceptional items of GBP5.3 million (2012: GBP9.7
million), Group operating profit decreased from GBP66.8 million to
GBP56.0 million. These exceptional items comprised:
2013 2012
GBPm GBPm
Loss on disposal of fixed assets 0.2 1.2
Impairment of fixed assets in loss making
stores 0.9 1.5
Onerous store lease provision 1.3 (0.2)
Total property related exceptional costs 2.4 2.5
------ ------
Reorganisation of warehouse operations
(1) 0.2 3.0
Canterbury restructuring (2) 0.2 1.6
Blacks restructuring (3) 0.9 3.5
------ ------
Total reorganisation and restructuring
costs 1.3 8.1
------ ------
Impairment of intangible assets (4) 2.3 2.7
Profit on disposal of Canterbury (5) (0.7) -
Gain following acquisition of Focus Brands
(6) - (3.6)
Total other exceptional charges / (credits) 1.6 (0.9)
------ ------
Total exceptional charge 5.3 9.7
====== ======
(1) Reorganisation of the warehouse operations consisting of
provisions for onerous property leases and redundancy costs.
(2) Redundancies and other one off costs incurred in the closure
of Canterbury European Fashionwear Limited and Canterbury North
America LLC.
(3) Restructuring of the Blacks business following acquisition
for relocation of warehouse operations.
(4) Current year charge relates to a partial impairment of the
goodwill arising on the acquisition of Bank Fashion. The charge in
the prior year relates to the impairment of intangible assets on
Kooga goodwill and brand name (GBP1.9 million) and Cecil Gee fascia
name (GBP0.8 million).
(5) Profit on the disposal of the Canterbury group of businesses
to Pentland Group plc in September 2012 (see note 6).
(6) The gain on the disposal of the Focus joint venture arose in
the prior year from the remeasurement to fair value of the Group's
previously held investment in Focus Brands Limited.
Working capital and financing
A combination of funding for the Blacks business, ongoing
acquisition activity (including the acquisition of the Gio Goi
brand in the final week before the period end) and capital
expenditure incurred means that year end net cash decreased by
GBP14.7 million to GBP45.6 million (2012: GBP60.3 million). The
revolving credit facility has been used through most of the year
and, consequently, the net financing charge increased by GBP0.5
million to GBP0.9 million (2012: GBP0.4 million).
The Group has a GBP75 million committed syndicated bank facility
secured until 12 October 2015. This facility consists of a GBP60
million revolving credit facility with a current margin of 1.40%
over LIBOR together with a GBP15 million working capital facility.
It is likely that we will increase these facilities in the current
year to enable us to continue to make acquisitions when
opportunities occur.
Gross capital expenditure (excluding disposal costs) decreased
slightly by GBP2.2 million to GBP43.5 million (2012: GBP45.7
million). The majority of the expenditure on the Kingsway facility
was incurred in the prior year although a further GBP1.4 million
was spent in the year (2012: GBP19.4 million). However, this
reduction was offset by increased investment in our overseas
businesses with total investment in the year of GBP9.5 million in
France (2012: GBP4.7 million) and GBP6.8 million in Spain (2012:
GBP2.1 million). Elsewhere, we also spent GBP3.4 million on the
Blacks property portfolio and we have acquired a new combined
warehouse and head office building for Kukri at a cost of GBP0.7
million.
Increased confidence in the potential for JD internationally
combined with ongoing investment in refurbishing the Blacks
portfolio and investment in the new core Oracle ERP system means
that capital expenditure will remain high this year.
Working capital remains well controlled with suppliers
continuing to be paid to agreed terms and settlement discounts
taken whenever due.
Store Portfolio
During the period, store numbers (excluding trading websites)
have moved as follows:
Sports Fascias
JD JD France JD Size
(No. Stores) UK & (a) Spain UK & Chausport Champion Sprinter Total
Ireland Ireland
(b)
Start of
period 332 5 - 23 74 20 49 503
New stores 17 6 4 2 5 - 5 39
Transfers 4 - 1 - - (3) (1) 1
Closures (21) - - (2) (4) - - (27)
------------- ------------ -------- ------------- ------------ ----------- ----------- --------
End of period 332 11 5 23 75 17 53 516
------------- ------------ -------- ------------- ------------ ----------- ----------- --------
(000 Sq
Ft)
Start of
period 1,150 9 - 33 82 92 603 1,969
New stores 58 17 12 1 6 - 42 136
Transfers 19 - 2 - - (17) (2) 2
Closures (47) - - (5) (4) - - (56)
End of period 1,180 26 14 29 84 75 643 2,051
------------- ------------ -------- ------------- ------------ ----------- ----------- --------
(a) Includes the Size store in Les Halles, Paris
(b) Includes the Foot Patrol store in Berwick Street, London
Fashion Fascias
(No. Stores) Bank Scotts Originals Cecil Gee Tessuti Total
Start of
period 80 35 - 6 - 121
New stores 7 - - - 2 9
Acquisitions - - 7 - 4 11
Transfers (1) - - - - (1)
Closures (1) (3) (2) (2) - (8)
----- ------- ---------- ---------- -------- ------
End of period 85 32 5 4 6 132
----- ------- ---------- ---------- -------- ------
(000 Sq
Ft)
Start of
period 238 72 - 16 - 326
New stores 18 - - - 6 24
Acquisitions - - 13 - 11 24
Transfers (2) - - - - (2)
Closures (2) (6) (3) (2) - (13)
End of period 252 66 10 14 17 359
----- ------- ---------- ---------- -------- ------
Outdoor Fascias
No. 000
Stores Sq Ft
Start of
period 295 763
New stores 1 2
Closures (122) (281)
--------- --------
End of period 174 484
--------- --------
Dividends and Earnings per Share
The Board proposes paying a final dividend of 22.00p (2012:
21.20p) bringing the total dividend payable for the year to 26.30p
(2012: 25.30p) per ordinary share. The proposed final dividend will
be paid on 5 August 2013 to all shareholders on the register at 10
May 2013. The total dividends payable for the year have therefore
increased by a further 4% with a cumulative growth over the last
five years of 209%.
The adjusted earnings per ordinary share before exceptional
items were 88.51p (2012: 105.89p).
The basic earnings per ordinary share were 79.71p (2012:
96.27p).
Employees
The Board are extremely grateful for the contribution that all
our employees make through skills, energy and dedication. In
difficult trading conditions and with radical turnaround plans in
place in certain of our businesses then we realise that we are very
reliant on this contribution. Equally, the Board recognises that
the ongoing success of the core JD business comes from the
execution excellence delivered by the whole team.
Current Trading and Outlook
We are pleased overall with the start that we have made to the
new year. A very considerable amount of reorganisation in both
Outdoor Retail and our warehousing and distribution operations is
now behind us and this should benefit trading in the balance of the
year. The like for like sales performance for the nine weeks to 6
April 2013 continues to be encouraging in the Sports Fascias. This
performance has been as follows:
Sport UK & Combined
Ireland (excl Fashion Core UK &
Champion) (excl Premium) Ireland
+1.9% -6.2% +0.5%
The Group is exceptionally well positioned with its retail
proposition, financial resources and extensive management
experience to take advantage of opportunities both in the UK and
internationally. 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.
A further update will be made in our Interim Management
Statement on 19 June 2013.
Peter Cowgill
Executive Chairman
17 April 2013
Consolidated Income Statement
For the 53 weeks ended 2 February 2013
53 weeks to 52 weeks to
Note 2 February 2013 28 January
GBP000 2012
GBP000
Revenue 1,258,892 1,059,523
Cost of sales (645,404) (538,676)
--------------------------------------- ------- ------------------ --------------
Gross profit 613,488 520,847
Selling and distribution expenses
- normal (494,619) (403,923)
Selling and distribution expenses
- exceptional (3,724) (10,532)
Administrative expenses - normal (59,973) (43,193)
Administrative expenses - exceptional (1,624) 847
Other operating income 2,427 2,730
Operating profit 55,975 66,776
Before exceptional items 61,323 76,461
Exceptional items 3 (5,348) (9,685)
--------------
Operating profit 55,975 66,776
Share of results of joint venture
before exceptional items (net
of income tax) - (102)
Share of exceptional items (net
of income tax) - 1,170
--------------------------------------- ------- ------------------ --------------
Share of results of joint venture - 1,068
Financial income 645 646
Financial expenses (1,503) (1,048)
--------------------------------------- ------- ------------------ --------------
Profit before tax 55,117 67,442
Income tax expense (13,875) (18,093)
--------------------------------------- ------- ------------------ --------------
Profit for the period 41,242 49,349
--------------------------------------- ------- ------------------ --------------
Attributable to equity holders
of the parent 38,786 46,847
Attributable to non-controlling
interest 2,456 2,502
Basic earnings per ordinary share 4 79.71p 96.27p
--------------------------------------- ------- ------------------ --------------
Diluted earnings per ordinary
share 4 79.71p 96.27p
--------------------------------------- ------- ------------------ --------------
Consolidated Statement of Comprehensive Income
For the 53 weeks ended 2 February 2013
53 weeks to 52 weeks to
2 February 28 January
2013 2012
GBP000 GBP000
Profit for the period 41,242 49,349
Other comprehensive income:
Exchange differences on translation
of foreign operations (2,921) (2,096)
Recycling of foreign currency translation (910) -
reserve on disposal of foreign operations
-------------------------------------------- ------------ ------------
Total other comprehensive income for
the period (3,831) (2,096)
-------------------------------------------- ------------ ------------
Total comprehensive income and expense
for the period
(net of income tax) 37,411 47,253
-------------------------------------------- ------------ ------------
Attributable to equity holders of the
parent 34,767 44,751
Attributable to non-controlling interest 2,644 2,502
-------------------------------------------- ------------ ------------
Consolidated Statement of Financial Position
As at 2 February 2013
As at
28 January
As at 2012
2 February (restated
2013 -
GBP000 see note 1)
GBP000
Assets
Intangible assets 96,024 97,290
Property, plant and equipment 129,101 118,909
Investment property - -
Other assets 20,568 16,975
Deferred tax assets - -
Total non-current assets 245,693 233,174
--------------------------------------------- ------------- --------------
Inventories 146,569 133,243
Trade and other receivables 56,761 54,147
Cash and cash equivalents 53,484 67,024
--------------------------------------------- ------------- --------------
Total current assets 256,814 254,414
--------------------------------------------- ------------- --------------
Total assets 502,507 487,588
--------------------------------------------- ------------- --------------
Liabilities
Interest-bearing loans and borrowings (7,157) (5,547)
Trade and other payables (194,061) (196,256)
Provisions (2,714) (3,375)
Income tax liabilities (8,817) (8,861)
--------------------------------------------- ------------- --------------
Total current liabilities (212,749) (214,039)
--------------------------------------------- ------------- --------------
Interest-bearing loans and borrowings (691) (1,182)
Other payables (30,085) (36,149)
Provisions (3,373) (6,407)
Deferred tax liabilities (3,852) (723)
--------------------------------------------- ------------- --------------
Total non-current liabilities (38,001) (44,461)
--------------------------------------------- ------------- --------------
Total liabilities (250,750) (258,500)
--------------------------------------------- ------------- --------------
Total assets less total liabilities 251,757 229,088
--------------------------------------------- ------------- --------------
Capital and reserves
Issued ordinary share capital 2,433 2,433
Share premium 11,659 11,659
Retained earnings 230,572 207,503
Other reserves (6,841) (6,339)
Total equity attributable to equity holders
of the parent 237,823 215,256
Non-controlling interest 13,934 13,832
--------------------------------------------- ------------- --------------
Total equity 251,757 229,088
--------------------------------------------- ------------- --------------
Consolidated Statement of Changes in Equity
For the 53 weeks ended 2 February 2013
Foreign Total Equity
Ordinary Currency Attributable
Share Share Retained Other Translation to
Capital Premium Earnings Equity Reserve Equity Holders
GBP000 GBP000 GBP000 GBP000 GBP000 of The Parent
GBP000
Balance at 29 January
2011 2,433 11,659 171,916 (1,769) (149) 184,090
Profit for the period - - 46,847 - - 46,847
Other comprehensive income:
Exchange differences
on translation of foreign
operations - - - - (2,096) (2,096)
----------------------------- ----------- ---------------- ----------- ---------- ------------- ----------------
Total other comprehensive
income - - - - (2,096) (2,096)
----------------------------- ----------- ---------------- ----------- ---------- ------------- ----------------
Total comprehensive income
for the period - - 46,847 - (2,096) 44,751
Dividends to equity holders - - (11,338) - - (11,338)
Put options held by
non-controlling
interests - - - (2,325) - (2,325)
Non-controlling interest
arising on acquisition - - - - - -
Disposal of non-controlling
interest - - 78 - - 78
----------------------------- ----------- ---------------- ----------- ---------- ------------- ----------------
Balance at 28 January
2012 2,433 11,659 207,503 (4,094) (2,245) 215,256
Profit for the period - - 38,786 - - 38,786
Other comprehensive income:
Exchange differences
on translation of foreign
operations - - - - (3,109) (3,109)
Recycling of foreign
currency translation
reserve on disposal of
foreign operations - - - - (910) (910)
----------------------------- ----------- ---------------- ----------- ---------- ------------- ----------------
Total other comprehensive
income - - - - (4,019) (4,019)
----------------------------- ----------- ---------------- ----------- ---------- ------------- ----------------
Total comprehensive income
for the period - - 38,786 - (4,019) 34,767
Dividends to equity holders - - (12,408) - - (12,408)
Put options held by
non-controlling
interests - - - (1,744) - (1,744)
Revaluation of the
Canterbury
put options prior to
disposal 2,570 2,570
On disposal of Canterbury (2,691) 2,691 - -
Non-controlling interest
arising on acquisition - - (618) - - (618)
Balance at 2 February
2013 2,433 11,659 230,572 (577) (6,264) 237,823
----------------------------- ----------- ---------------- ----------- ---------- ------------- ----------------
Consolidated Statement of Changes in Equity (continued)
For the 53 weeks ended 2 February 2013
Total Equity
Attributable Non-
to Controlling Total
Equity Holders Interest Equity
of The Parent GBP000 GBP000
GBP000
Balance at 29 January
2011 184,090 1,085 185,175
Profit for the period 46,847 2,502 49,349
Other comprehensive income:
Exchange differences
on translation of foreign
operations (2,096) - (2,096)
----------------------------------------- ------------- -------------- ----------
Total other comprehensive
income (2,096) - (2,096)
----------------------------------------- ------------- -------------- ----------
Total comprehensive income
for the period 44,751 2,502 47,253
Dividends to equity holders (11,338) (140) (11,478)
Put options held by non-controlling
interests (2,325) - (2,325)
Non-controlling interest
arising on acquisition - 10,462 10,462
Disposal of non-controlling
interest 78 (77) 1
----------------------------------------- ------------- -------------- ----------
Balance at 28 January
2012 215,256 13,832 229,088
Profit for the period 38,786 2,456 41,242
Other comprehensive income:
Exchange differences
on translation of foreign
operations (3,109) 188 (2,921)
Recycling of foreign
currency translation
reserve on disposal of
foreign operations (910) - (910)
----------------------------------------- ------------- -------------- ----------
Total other comprehensive
income (4,019) 188 (3,831)
----------------------------------------- ------------- -------------- ----------
Total comprehensive income
for the period 34,767 2,644 37,411
Dividends to equity holders (12,408) (338) (12,746)
Put options held by non-controlling
interests (1,744) - (1,744)
Revaluation of the Canterbury
put options prior to
disposal 2,570 - 2,570
On disposal of Canterbury - (2,570) (2,570)
Non-controlling interest
arising on acquisition (618) 366 (252)
Balance at 2 February
2013 237,823 13,934 251,757
----------------------------------------- ------------- -------------- ----------
Put options at 2 February 2013 are held by the 40%
non-controlling interest in Tessuti Group Limited and 15%
non-controlling interest in Source Lab Limited. At 28 January 2012
the put options were held by the 49% non-controlling interest in
Canterbury of New Zealand Limited and 25% non-controlling interest
in Canterbury International (Australia) Pty Limited.
Consolidated Statement of Cash Flows
For the 53 weeks ended 2 February 2013
53 weeks to 52 weeks to
2 February 28 January
2013 2012
GBP000 GBP000
Cash flows from operating activities
Profit for the period 41,242 49,349
Share of results of joint venture - (1,068)
Income tax expense 13,875 18,093
Financial expenses 1,503 1,048
Financial income (645) (646)
Depreciation and amortisation of non-current
assets 30,328 24,353
Exchange differences on translation (10) (764)
Profit on disposal of Canterbury (691) -
Loss on disposal of non-current assets 212 1,148
Other exceptional items 3 4,495 8,751
Increase in inventories (23,551) (14,397)
Increase in trade and other receivables (12,393) (2,780)
(Decrease) / increase in trade and other
payables (5,902) 11,952
Interest paid (1,503) (1,048)
Income taxes paid (12,232) (25,084)
---------------------------------------------- ------------ ------------
Net cash from operating activities 34,728 68,907
---------------------------------------------- ------------ ------------
Cash flows from investing activities
Interest received 645 646
Proceeds from sale of non-current assets 977 171
Disposal costs of non-current assets (143) (312)
Acquisition of intangible assets (5,540) (1,711)
Acquisition of property, plant and equipment (38,178) (43,846)
Acquisition of non-current other assets (5,350) (1,903)
Cash consideration of acquisitions (5,875) (26,106)
Cash acquired with acquisitions 1,208 4,019
Overdrafts acquired with acquisitions (175) (3,326)
Receipt of Canterbury intercompany debt 22,699 -
Cash in Canterbury on disposal (5,888) -
Dividend received from joint venture - 7,217
Net cash used in investing activities (35,620) (65,151)
---------------------------------------------- ------------ ------------
Cash flows from financing activities
Repayment of interest-bearing loans and
borrowings (245) (16,755)
Repayment of finance lease liabilities (593) (1,459)
Acquisition of non-controlling interest (40) -
Sale of subsidiary shares to non-controlling
interest - 2
Equity dividends paid (12,408) (11,338)
Dividends paid to non-controlling interest
in subsidiaries (338) (140)
---------------------------------------------- ------------ ------------
Net cash used in financing activities (13,624) (29,690)
---------------------------------------------- ------------ ------------
Net decrease in cash and cash equivalents (14,516) (25,934)
Cash and cash equivalents at the beginning
of the period 61,611 87,545
Foreign exchange gains in cash and cash (867) -
equivalents
---------------------------------------------- ------------ ------------
Cash and cash equivalents at the end
of the period 46,228 61,611
---------------------------------------------- ------------ ------------
Analysis of Net Cash
As at 2 February 2013
At 28 On Non- At 2
January On acquisition disposal Cash cash February
2012 of subsidiaries of flow movements 2013
GBP000 GBP000 subsidiaries GBP000 GBP000 GBP000
GBP000
Cash at bank and
in hand 67,024 1,208 (5,888) (7,827) (1,033) 53,484
Overdrafts (5,413) (175) - (1,834) 166 (7,256)
----------------------------- ---------- ------------------ --------------- --------- ------------ -----------
Cash and cash equivalents 61,611 1,033 (5,888) (9,661) (867) 46,228
Interest-bearing
loans and borrowings:
Bank loans (289) - - 205 16 (68)
Finance lease liabilities (660) - - 593 11 (56)
Other loans (367) (508) 367 40 - (468)
----------------------------- ---------- ------------------ --------------- --------- ------------ -----------
60,295 525 (5,521) (8,823) (840) 45,636
----------------------------- ---------- ------------------ --------------- --------- ------------ -----------
1. Prior period restatement
The comparative Consolidated Statement of Financial Position and
Consolidated Statement of Changes in Equity as at 28 January 2012
has been restated to reflect the completion in the period to 2
February 2012 of the initial accounting in respect of the
acquisition of JD Sprinter Holdings 2010 acquired in the period to
28 July 2012 and to reflect the completion of the initial
accounting in respect of Blacks Outdoor Retail Limited acquired in
the period to 28 January 2012. Adjustments made to the provisional
calculation of the fair value of assets and liabilities acquired,
as reported at 28 January 2012, in the period to 2 February 2013
have resulted in the following changes:
For the acquisition of JD Sprinter Holdings 2010 SL the
measurement adjustments made to the fair values of the net assets
reduced total assets by GBP449,000, reduced total liabilities by
GBP289,000 and the resulting change on total equity was GBP160,000.
This adjustment has also decreased non-controlling interest by
GBP160,000.
For the acquisition of Blacks Outdoor Retail Limited the
measurement adjustments made to the fair values of the net assets
increased total assets by GBP204,000, increased total liabilities
by GBP204,000 and the resulting change on total equity was
GBPnil.
The impact of these adjustments on the net assets is shown in
note 5.
2. Segmental analysis
IFRS 8 'Operating Segments' requires the Group's segments to be
identified on the basis of internal reports about components of the
Group that are regularly reviewed by the Chief Operating Decision
Maker to allocate resources to the segments and to assess their
performance. The Chief Operating Decision Maker is considered to be
the Executive Chairman of JD Sports Fashion Plc.
Information reported to the Chief Operating Decision Maker is
focused on the nature of the businesses within the Group. A new
reportable segment was created in the prior year on acquisition of
the Blacks business which signalled an entry into the outdoor
retail segment for the Group. The Group's reportable segments under
IFRS 8 are therefore as follows:
-- Sport retail - includes the results of the sport retail
trading companies JD Sports Fashion Plc, John David Sports Fashion
(Ireland) Limited, Spodis SA, Champion Sports Ireland, JD Sprinter
Holdings 2010 SL and Duffer of St George Limited
-- Fashion retail - includes the results of the fashion retail
trading companies Bank Fashion Limited, R.D. Scott Limited, Premium
Fashion Limited and Tessuti Group Limited (including subsidiary
companies)
-- Outdoor retail - includes the results of Blacks Outdoor Retail Limited
-- Distribution businesses - includes the results of the
distribution companies Topgrade Sportswear Limited, Nicholas
Deakins Limited, Kooga Rugby Limited, Nanny State Limited, Focus
Brands Limited, Kukri Sports Limited (including global subsidiary
companies) and Source Lab Limited. Canterbury Limited (including
global subsidiary companies) was also included until the point of
disposal
The Chief Operating Decision Maker receives and reviews
segmental operating profit. Certain central administrative costs
including Group Directors' salaries are included within the Group's
core 'Sport retail' result. This is consistent with the results as
reported to the Chief Operating Decision Maker.
IFRS 8 requires disclosure of information regarding revenue from
major products and customers. The majority of the Group's revenue
is derived from the retail of a wide range of apparel, footwear and
accessories to the general public. As such, the disclosure of
revenues from major products and customers is not appropriate.
Disclosure of revenue from major product groups is not provided at
this time due to the cost involved to develop a reliable product
split on a same category basis across all companies in the
Group.
Intersegment transactions are undertaken in the ordinary course
of business on arms length terms.
2. Segmental analysis (continued)
The Board consider that certain items are cross divisional in
nature and cannot be allocated between the segments on a meaningful
basis. The share of results of joint venture was presented as
unallocated in the following tables, as this entity had trading
relationships with companies in all of the Group's segments. In the
prior year, the exceptional credits pertaining to the dividend
received from joint venture (GBP2,691,000) and gain on disposal of
joint venture (GBP871,000) was included within the unallocated
segment. Net funding costs and taxation are treated as unallocated
reflecting the nature of the Group's syndicated borrowing
facilities and its tax
group. A deferred tax liability of GBP3,852,000 (2012: restated
liability of GBP723,000) and an income tax liability of
GBP8,817,000 (2012: GBP8,861,000) are included within the
unallocated segment.
Each segment is shown net of intercompany transactions and
balances within that segment. The eliminations remove intercompany
transactions and balances between different segments which
primarily relate to the net down of long term loans and short term
working capital funding provided by JD Sports Fashion Plc (within
Sport retail) to other companies in the Group, and intercompany
trading between companies in different segments.
Business Segments
Information regarding the Group's reportable operating segments
for the 53 weeks to 2 February 2013 is shown below:
Income statement
Sport Fashion Outdoor
Retail Retail Retail Distribution Unallocated Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gross revenue 854,282 160,442 121,006 130,342 - 1,266,072
Intersegment revenue (287) - - (6,893) - (7,180)
-------------------------- --------- -------------- ------------- --------------- ---------------- ----------
Revenue 853,995 160,442 121,006 123,449 - 1,258,892
-------------------------- --------- -------------- ------------- --------------- ---------------- ----------
Operating profit /
(loss)
before exceptional
items 77,791 (2,004) (14,906) 442 - 61,323
Exceptional items (1,662) (3,314) (608) 236 - (5,348)
-------------------------- --------- -------------- ------------- --------------- ---------------- ----------
Operating profit / (loss) 76,129 (5,318) (15,514) 678 - 55,975
Financial income 645
Financial expenses (1,503)
-------------------------- --------- -------------- ------------- --------------- ---------------- ----------
Profit before tax 55,117
Income tax expense (13,875)
-------------------------- --------- -------------- ------------- --------------- ---------------- ----------
Profit for the period 41,242
-------------------------- --------- -------------- ------------- --------------- ---------------- ----------
Total assets and liabilities
Sport Fashion Outdoor
Retail Retail Retail Distribution Unallocated Eliminations Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Total assets 432,190 70,725 50,112 48,947 - (99,467) 502,507
-------------- ------------ ----------- ----------- ---------------- --------------- ----------------- ------------
Total
liabilities (161,092) (67,769) (64,157) (44,530) (12,669) 99,467 (250,750)
-------------- ------------ ----------- ----------- ---------------- --------------- ----------------- ------------
2. Segmental analysis (continued)
Other segment information
Sport Fashion Outdoor
Retail Retail Retail Distribution Total
GBP000 GBP000 GBP000 GBP000 GBP000
Capital expenditure:
Brand names purchased 5,540 - - - 5,540
Property, plant and equipment 30,692 3,015 3,440 1,031 38,178
Non-current other assets 5,350 - - - 5,350
Depreciation, amortisation
and impairments:
Depreciation and amortisation
of non-current assets 23,850 4,018 1,183 1,277 30,328
Impairment of intangible
assets - 2,315 - - 2,315
Impairment of non-current
assets 803 62 - 40 905
--------------------------------------- --------- --------- -------- ----------------- -----------
The comparative segmental results for the 52 weeks to 28 January
2012 are as follows:
Income statement
Sport Fashion Outdoor
Retail Retail Retail Distribution Unallocated Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gross revenue 774,991 151,642 5,876 135,117 - 1,067,626
Intersegment revenue (380) - - (7,723) - (8,103)
----------------------------- --------- ------------ ---------- --------------- ---------------- ----------
Revenue 774,611 151,642 5,876 127,394 - 1,059,523
----------------------------- --------- ------------ ---------- --------------- ---------------- ----------
Operating profit / (loss)
before exceptional items 74,301 3,303 (2,199) 1,056 - 76,461
Exceptional items (4,654) (1,538) (3,500) (3,555) 3,562 (9,685)
----------------------------- --------- ------------ ---------- --------------- ---------------- ----------
Operating profit / (loss) 69,647 1,765 (5,699) (2,499) 3,562 66,776
Share of results of
joint venture 1,068
Financial income 646
Financial expenses (1,048)
----------------------------- --------- ------------ ---------- --------------- ---------------- ----------
Profit before tax 67,442
Income tax expense (18,093)
----------------------------- --------- ------------ ---------- --------------- ---------------- ----------
Profit for the period 49,349
----------------------------- --------- ------------ ---------- --------------- ---------------- ----------
Total assets and liabilities (restated
- see note 1)
Sport Fashion Outdoor
Retail Retail Retail Distribution Unallocated Eliminations Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Total assets 407,807 60,587 38,713 68,485 - (88,004) 487,588
-------------- ------------ ----------- ----------- ---------------- --------------- ----------------- ------------
Total
liabilities (169,320) (53,852) (42,526) (71,222) (9,584) 88,004 (258,500)
-------------- ------------ ----------- ----------- ---------------- --------------- ----------------- ------------
2. Segmental analysis (continued)
Other segment information
Sport Fashion Outdoor
Retail Retail Retail Distribution Total
GBP000 GBP000 GBP000 GBP000 GBP000
Capital expenditure:
Brand names purchased 1,500 - - 211 1,711
Property, plant and equipment 37,656 4,090 - 2,100 43,846
Non-current other assets 1,903 - - - 1,903
Depreciation, amortisation
and impairments:
Depreciation and amortisation
of non-current assets 18,990 3,618 - 1,745 24,353
Impairment of intangible
assets - 838 - 1,877 2,715
Impairment of non-current
assets 202 1,282 - 102 1,586
--------------------------------------- --------- --------- -------- ----------------- -----------
Geographical Information
The Group's operations are located in the UK, Republic of
Ireland, France, Spain, Australia, New Zealand, Canada, Dubai,
Singapore and Hong Kong.
The following table provides analysis of the Group's revenue by
geographical market, irrespective of the origin of the
goods/services:
52 weeks to
53 weeks to 28 January
2 January 2013 2012
GBP000 GBP000
UK 1,029,801 863,771
Europe 197,596 157,668
Rest of world 31,495 38,084
--------------- ---------------- ------------
1,258,892 1,059,523
--------------- ---------------- ------------
The revenue from any individual country, with the exception of
the UK, is not more than 10% of the Group's total revenue.
The following is an analysis of the carrying amount of segmental
non-current assets, excluding the deferred tax assets of GBPnil
(2012: GBPnil), by the geographical area in which the assets are
located:
2012 (restated
-
2013 see note 1)
GBP000 GBP000
UK 190,590 173,973
Europe 54,961 58,641
Rest of world 142 560
--------------- -------- ---------------
245,693 233,174
--------------- -------- ---------------
3. Exceptional items
53 weeks to 52 weeks to
2 February 28 January
2013 2012
GBP000 GBP000
Loss on disposal of non-current assets
(1) 212 1,148
Impairment of non-current assets (2) 905 1,586
Onerous lease provision (3) 1,332 (214)
Reorganisation of warehouse operations
(4) 133 3,000
Canterbury restructuring (5) 219 1,512
Blacks restructuring (6) 923 3,500
Selling and distribution expenses - exceptional 3,724 10,532
------------------------------------------------- ------------ ------------
Profit on disposal of Canterbury (7) (691) -
Gain on acquisition (8) - (871)
Dividend received from joint venture (9) - (2,691)
Impairment of goodwill, brand names and
fascia names (10) 2,315 2,715
Administrative expenses - exceptional 1,624 (847)
------------------------------------------------- ------------ ------------
5,348 9,685
------------------------------------------------- ------------ ------------
(1) Relates to the excess of net book value of property, plant
and equipment and non-current other assets disposed over proceeds
received
(2) Relates to property, plant and equipment and non-current
other assets in cash-generating units which are loss making, where
it is considered that this position cannot be recovered
(3) Relates to the net movement in the provision for onerous
property leases on trading and non-trading stores
(4) Relates to the reorganisation of the warehouse operations
consisting of the provision of onerous property leases, redundancy
costs and dilapidations at the vacated premises
(5) Relates to the restructuring and closure of the Canterbury
North America LLC and Canterbury European Fashionwear operations
following the decision to wind down the separate business
(6) Relates to the restructuring of the Blacks business
following acquisition for relocation of warehouse operations
(7) Profit on the disposal of Canterbury Limited and its subsidiaries (see note 6)
(8) Relates to the remeasurement in fair value of the Group's
previously held investment in Focus Brands Limited
(9) The dividend of GBP7,217,000 was received from Focus Brands
Limited on 15 February 2011 prior to the Group's acquisition of a
further 31% of the issued share capital of Focus Brands Limited.
The dividend received was eliminated against the carrying value of
the Group's equity accounted investment with the excess of
GBP2,691,000 recognised in the Consolidated Income Statement as an
exceptional credit
(10) Relates to the impairment in the period to 2 February 2013
of the goodwill arising on the acquisition of Pink Soda Limited
(formerly Bank Stores Holding Limited) and the impairment in the
period to 28 January 2012 of the goodwill and brand name arising on
the acquisition of Kooga Rugby Limited and the fascia name arising
on the acquisition of Premium Fashion Limited.
These selling and distribution expenses and administrative
expenses are exceptional items as they are, in aggregate, material
in size and/or unusual or infrequent in nature.
4. Earnings per ordinary share
Basic and diluted earnings per ordinary share
The calculation of basic and diluted earnings per ordinary share
at 2 February 2013 is based on the profit for the period
attributable to equity holders of the parent of GBP38,786,000
(2012: GBP46,847,000) and a weighted average number of ordinary
shares outstanding during the 53 weeks to 2 February 2013 of
48,661,658 (52 weeks to 28 January 2012: 48,661,658).
53 weeks to 52 weeks
2 February to
2013 28 January
2012
Issued ordinary shares at beginning and
end of period 48,661,658 48,661,658
----------------------------------------- ------------ ------------
Adjusted basic and diluted earnings per ordinary share
Adjusted basic and diluted earnings per ordinary share have been
based on the profit for the period attributable to equity holders
of the parent for each financial period but excluding the post-tax
effect of certain exceptional items. The Directors consider that
this gives a more meaningful measure of the underlying performance
of the Group.
53 weeks 52 weeks
to to
2 February 28 January
Note 2013 2012
GBP000 GBP000
Profit for the period attributable to
equity holders
of the parent 38,786 46,847
Exceptional items excluding loss on disposal
of non-current assets 3 5,136 8,537
Tax relating to exceptional items (850) (2,689)
Share of exceptional items of joint venture
(net of income tax) - (1,170)
---------------------------------------------- ------- ------------ ------------
Profit for the period attributable to
equity holders of the parent excluding
exceptional items 43,072 51,525
---------------------------------------------- ------- ------------ ------------
Adjusted basic and diluted earnings per
ordinary share 88.51p 105.89p
---------------------------------------------- ------- ------------ ------------
5. Acquisitions
Current period acquisitions
Originals
On 14 March 2012, the Group acquired, via its subsidiary R.D.
Scott Limited, the trade and assets of seven stores trading as
Originals and the head office along with the Originals name and
inventory from the Administrators of Retailchic Limited for a total
cash consideration of GBP100,000. Subsequent to the period end, the
trade and assets of the Originals stores have been transferred to
Tessuti Limited, another subsidiary of the Group.
Included in the 53 week period to 2 February 2013 is revenue of
GBP1,793,000 and a loss before tax of GBP302,000 in respect of
Originals.
Acquisition of Source Lab Limited
On 9 May 2012, the Group acquired 85% of the issued share
capital of Source Lab Limited for a cash consideration of
GBP2,550,000. Source Lab Limited, which was established in 2005,
design, source and distribute football related apparel under
license from some of the biggest clubs in Europe including
Manchester United, Chelsea, Arsenal and Barcelona.
The provisional goodwill calculation is summarised below:
Provisional
fair value
Measurement at
Book value adjustments 2 February
GBP000 GBP000 2013
GBP000
Acquiree's net assets at the
acquisition date:
Property, plant & equipment 9 - 9
Inventories 23 229 252
Trade and other receivables 1,370 (68) 1,302
Cash and cash equivalents 162 - 162
Trade and other payables (839) (222) (1,061)
Interest-bearing loans and borrowings (170) - (170)
Deferred tax liabilities - (1) (1)
Net identifiable assets 555 (62) 493
--------------------------------------- ------------- -------------- --------------
Non-controlling interest (15%) (83) 9 (74)
Goodwill on acquisition 2,131
--------------------------------------- ------------- -------------- --------------
Consideration paid - satisfied
in cash 2,550
--------------------------------------- ------------- -------------- --------------
The fair value of trade and other receivables is GBP1,302,000
and includes trade receivables with a fair value of GBP1,274,000.
The gross contractual amount for trade receivables is GBP1,274,000,
of which GBPnil is expected to be uncollectable.
The Board believes that the excess of consideration paid over
net identifiable assets is best considered as goodwill on
acquisition representing employee expertise and anticipated future
operating synergies.
The goodwill calculation is provisional at 2 February 2013 to
allow further measurement adjustments to be made if necessary,
during the remaining measurement period to reflect any new
information obtained about facts and circumstances that existed at
the acquisition date that would have affected the measurement of
the amounts recognised as of that date. The goodwill arises on
consolidation and is therefore not tax deductible.
Included in the 53 week period to 2 February 2013 is revenue of
GBP5,161,000 and a profit before tax of GBP480,000 in respect of
Source Lab Limited. Included within revenue is GBP229,000 of
revenue to other Group companies which has therefore been
eliminated on consolidation.
5. Acquisitions (continued)
Acquisition of Tessuti Group Limited
On 18 May 2012, the Group, via its new 60% owned subsidiary
Tessuti Group Limited, acquired the trading businesses that make up
the Tessuti group for a total consideration of GBP4,819,000. On
acquisition, Tessuti group operated four premium fashion retail
stores in the North West of England, along with two trading
websites.
The provisional goodwill calculation is summarised below:
Provisional
fair value
Measurement at
Book value adjustments 2 February
GBP000 GBP000 2013
GBP000
Acquiree's net assets at the
acquisition date:
Intangible assets - 852 852
Property, plant & equipment 1,898 - 1,898
Inventories 660 - 660
Trade and other receivables 303 - 303
Cash and cash equivalents 1,044 - 1,044
Trade and other payables (736) - (736)
Interest-bearing loans and borrowings (508) - (508)
Deferred tax liabilities (100) (213) (313)
Net identifiable assets 2,561 639 3,200
--------------------------------------- ------------- -------------- ------------
Non-controlling interest 783 (256) 527
Goodwill on acquisition 1,092
Consideration paid - satisfied
in cash 3,225
Deferred consideration - loan
notes issued 1,570
Shares issued to non-controlling
interest 24
--------------------------------------- ------------- -------------- ------------
Total consideration 4,819
--------------------------------------- ------------- -------------- ------------
The Group's non-controlling interest arising on acquisition of
GBP527,000 includes indirect ownership within the Tessuti Group of
companies.
The fair value of trade and other receivables is GBP303,000 and
includes trade receivables with a fair value of GBP26,000. The
gross contractual amount for trade receivables is GBP26,000, of
which GBPnil is expected to be uncollectable.
The intangible asset acquired represents the fair value of the
'Tessuti' fascia name. It is the intention of the Group to trade
under the Tessuti fascia for the foreseeable future. The Board
believes that the excess of consideration paid over net
identifiable assets is best considered as goodwill on acquisition,
representing employee expertise and anticipated future operating
synergies.
The goodwill calculation is provisional at 2 February 2013 to
allow further measurement adjustments to be made if necessary,
during the remaining measurement period to reflect any new
information obtained about facts and circumstances that existed at
the acquisition date that would have affected the measurement of
the amounts recognised as of that date. The goodwill arises on
consolidation and is therefore not tax deductible.
Included in the 53 week period to 2 February 2013 is revenue of
GBP4,821,000 and a profit before tax of GBP163,000 in respect of
Tessuti Group Limited.
Full year impact of acquisitions
Had the acquisitions of Originals, Source Lab Limited and
Tessuti Group Limited been effected at 29 January 2012, the revenue
and profit before tax of the Group for the 53 week period to 2
February 2013 would have been GBP1,262,598,000 and GBP55,093,000
respectively.
5. Acquisitions (continued)
Acquisition costs
Acquisition-related costs amounting to GBP155,000 (Originals:
GBP13,000; Source Lab Limited: GBP66,000; and Tessuti Group
Limited: GBP76,000) have been excluded from the consideration
transferred and have been recognised as an expense in the year,
within administrative expenses in the Consolidated Income
Statement.
Prior period acquisitions
Acquisition of Kukri Sports Limited
On 7 February 2011, the Group acquired 80% of the issued share
capital of Kukri Sports Limited for a cash consideration of GBP1.
Kukri Sports Limited has a number of subsidiaries around the world,
which source and provide bespoke sports teamwear to schools,
universities and sports clubs. In addition, Kukri Sports Limited is
sole kit supplier to a number of professional sports teams and
international associations.
No measurement adjustments have been made to the fair values in
the 53 week period to 2 February 2013.
Acquisition of additional shares in Focus Brands Limited
On 16 February 2011, the Group acquired a further 31% of the
issued share capital of Focus Brands Limited for a cash
consideration of GBP1,000,000, with potential further deferred
consideration of GBP250,000 depending on performance. The Group's
original share of 49% was acquired on 3 December 2007. Focus Brands
Limited was originally incorporated in order to acquire Focus Group
Holdings Limited and its subsidiary companies and was an entity
jointly controlled by the Group and the former shareholders of
Focus Group Holdings Limited. The additional shares purchased take
the Group's holding in Focus Brands Limited to 80%, thereby giving
the Group control. Focus Brands Limited is now a subsidiary of the
Group rather than a jointly-controlled entity. The increase in
Group ownership has resulted in a gain of GBP871,000 being
recognised as an exceptional credit in the Consolidated Income
Statement upon remeasurement of the Group's previously held equity
interest to fair value.
No measurement adjustments have been made to the fair values in
the 53 week period to 2 February 2013.
Acquisition of Champion Sports (Holdings)
On 4 April 2011, the Group (via its subsidiaries The John David
Group Limited and JD Sports Limited) acquired 100% of the issued
share capital of Champion Sports (Holdings) for a cash
consideration of GBP6 (EUR7) and have also advanced GBP15,066,000
(EUR17,100,000) to allow it to settle all of its indebtedness save
for a potential maximum GBP2,203,000 (EUR2,500,000) of leasing
finance.
Champion was founded in 1992 and is one of the leading retailers
of sports apparel and footwear in the Republic of Ireland. On
acquisition, Champion had 22 stores in premium locations in the
Republic of Ireland and one store in Northern Ireland. In the
period since acquisition two stores in the Republic of Ireland and
the store in Northern Ireland have been closed with a further 3
stores in the Republic of Ireland transferred to John David Sports
Fashion (Ireland) Limited.
No measurement adjustments have been made to the fair values in
the 53 week period to 2 February 2013.
Acquisition of JD Sprinter Holdings 2010 SL
On 17 June 2011, the Group, via its new 50.1% owned subsidiary
JD Sprinter Holdings 2010 SL ('JD Sprinter'), acquired 100% of the
trading businesses that make up the Sprinter group of companies in
Spain. The remaining 49.9% of the shares in JD Sprinter are owned
equally between the Segarra family, who founded Sprinter, and the
Bernad family, who have been investors in Sprinter for 15 years. JD
have made an investment of GBP17,536,000 (EUR20,000,000) into JD
Sprinter by way of subscription for its new shares and the Segarra
and Bernad families have put the Sprinter companies into JD
Sprinter as consideration for their new shares.
Sprinter was founded in 1981 and is one of the leading sports
retailers in Spain selling footwear, apparel, accessories and
equipment for a wide range of sports as well as some lifestyle
casual wear including childrenswear. This offer includes both
international sports brands and successful own brands. Sprinter is
based in Elche in South East Spain and on acquisition had 47 stores
primarily based in Andalucia and Levante.
During the 12 month period since acquisition, certain
measurement adjustments have been made to the fair values of the
net assets of JD Sprinter Holdings 2010 SL as at the acquisition
date in accordance with IFRS 3 'Business Combinations'.
5. Acquisitions (continued)
The goodwill calculation is summarised below:
Provisional fair Fair value
value at 28 Measurement at
January 2012 adjustments 2 February
GBP000 GBP000 2013
GBP000
Acquiree's net assets at the
acquisition date:
Intangible assets 5,058 - 5,058
Property, plant & equipment 9,053 (609) 8,444
Non-current other assets 1,035 - 1,035
Inventories 15,426 - 15,426
Trade and other receivables 383 - 383
Cash and cash equivalents 1,832 - 1,832
Interest-bearing loans and borrowings (3,326) - (3,326)
Trade and other payables (19,957) - (19,957)
Provisions (355) - (355)
Deferred tax asset / (liabilities) (1,329) 289 (1,040)
Net identifiable assets 7,820 (320) 7,500
--------------------------------------- ------------------- -------------- -------------
Non-controlling interest (49.9%) (3,902) 160 (3,742)
Goodwill on acquisition 6,590 160 6,750
--------------------------------------- ------------------- -------------- -------------
Consideration paid - satisfied
in cash 3,508 - 3,508
Consideration paid - share of
cash invested in JD Sprinter 7,000 - 7,000
--------------------------------------- ------------------- -------------- -------------
Total consideration 10,508 - 10,508
--------------------------------------- ------------------- -------------- -------------
The non-controlling interest
arising on the acquisition of
JD Sprinter comprises:
Non-controlling interest in
net identifiable assets of Sprinter
trading companies 3,902 (160) 3,742
Non-controlling interest in
net identifiable assets of JD
Sprinter company 7,000 - 7,000
--------------------------------------- ------------------- -------------- -------------
Total non-controlling interest 10,902 (160) 10,742
--------------------------------------- ------------------- -------------- -------------
5. Acquisitions (continued)
Blacks Outdoor Retail Limited
On 9 January 2012, the Group acquired, via its subsidiary Blacks
Outdoor Retail Limited, the trade and assets of Blacks Leisure
Group Plc and certain of its subsidiaries from its Administrators
for a total cash consideration of GBP20,000,000.
Blacks is a long established retailer of specialist outdoor
footwear, apparel and equipment with two fascias (Blacks and
Millets) and was trading from 296 stores at the point of its
administration. Since acquisition, 123 loss making stores have been
closed. In addition to selling third party brands such as The North
Face and Berghaus, Blacks has two strong own brands in Eurohike and
Peter Storm.
During the 12 month period since acquisition, certain
measurement adjustments have been made to the fair values of the
net assets of Blacks Outdoor Retail Limited as at the acquisition
date in accordance with IFRS 3 'Business Combinations'.
The goodwill calculation is summarised below:
Provisional fair Fair value
value at 28 Measurement at
January 2012 adjustments 2 February
GBP000 GBP000 2013
GBP000
Acquiree's net assets at the
acquisition date:
Intangible assets 11,500 - 11,500
Non-current other assets 1,650 - 1,650
Property, plant & equipment 3,000 - 3,000
Inventories 6,692 2,888 9,580
Cash and cash equivalents 60 - 60
Trade and other receivables 5,349 - 5,349
Trade and other payables (13,022) (204) (13,226)
Deferred tax liabilities (413) - (413)
Net identifiable assets 14,816 2,684 17,500
-------------------------------- ------------------- -------------- -------------
Goodwill on acquisition 5,184 (2,684) 2,500
-------------------------------- ------------------- -------------- -------------
Consideration paid - satisfied
in cash 20,000 - 20,000
-------------------------------- ------------------- -------------- -------------
6. Disposals
Current year disposals
Disposal of Canterbury Limited
On 13 September 2012 the Group disposed of its 100% shareholding
in Canterbury Limited to Pentland Group Plc for a total cash
payment of GBP22,698,521 and acquired the ONETrueSaxon Brand. The
total cash payment received comprised GBP1 for the entire share
capital of Canterbury Limited and GBP22,698,520 which repaid the
total intercompany receivable balance owing to the Company from the
Canterbury Group at the date of disposal.
The assets and liabilities related to Canterbury Limited (and
its subsidiary undertakings) form a disposal group. However,
Canterbury has not been treated as a discontinued operation at 2
February 2013, as its teamwear and leisurewear offering did not
represent a major line of business.
Financial information related to the disposal is set out
below:
GBP000
Consideration received 22,699
Less carrying value of net assets
disposed of (19,748)
Plus share of translation reserve
recycled 910
Less non-controlling interest
disposed of (2,570)
Less transaction costs (600)
----------------------------------- ---------
Profit on disposal 691
----------------------------------- ---------
Net cashflow on disposal:
Consideration received 22,699
Less cash and cash equivalents
disposed of (5,888)
----------------------------------- ---------
Net cash inflow from disposal 16,811
----------------------------------- ---------
Put and call options
The Group (via its subsidiary Canterbury Limited) was party to a
put and call option agreement between Canterbury Limited and the
vendors of Canterbury of New Zealand, whereby Canterbury Limited
may acquire or be required to acquire the non-controlling interest
of 49% of the issued share capital of Canterbury of New Zealand
Limited.
In addition, the Group (via its subsidiary Canterbury Limited)
was party to a put and call option between Canterbury Limited and
the non-controlling interest in Canterbury International
(Australia) Pty Limited, whereby Canterbury Limited may acquire or
be required to acquire 25% of the issued ordinary share capital of
Canterbury International (Australia) Pty Limited.
At the date of disposal of Canterbury Limited, a gross liability
of GBP5,261,000 recognised for the put options on Canterbury of New
Zealand and Canterbury International (Australia) Pty Limited
measured in accordance with IAS 32 has been replaced with the fair
value under IAS 39 of that derivative liability. This liability is
included in the net assets disposed of.
Subsequent to the disposal an amount of GBP2,691,000 which
represents the cumulative amounts previously recognised on the
re-measurement under IAS 32 of the put options was transferred from
other equity to retained earnings.
6. Disposals (continued)
Prior year disposals
Disposal of 15% of issued ordinary share capital of Premium
Fashion Limited
On 18 June 2011, the Group acquired, via its subsidiary Premium
Fashion Limited, the trade and assets of 8 stores trading as Cecil
Gee along with the Cecil Gee name and inventory from Moss Bros
Group Plc for a cash consideration of GBP1,598,000.
On 2 December 2011, 15% of the issued share capital was disposed
of to Benba Investments Limited, Chape Investments Limited and
Ginda Investments Limited by issuing 1,500 new shares (500 to each
new shareholder) in exchange for a cash consideration of
GBP1,500.
On 25 July 2012 the Group reacquired the 15% share capital for
cash consideration of GBP40,000. As the Group already had control
of Premium Fashion Limited, the increase in Group ownership has
been accounted for as an equity transaction.
7. Subsequent events
Acquisition of Cloggs Online Limited
On 13 February 2013 the Group acquired, via its new 88% owned
subsidiary Cloggs Online Limited, the trade and assets of Cloggs
(UK) Limited from its Administrators for a total cash consideration
of GBP600,000.
The provisional goodwill calculation is summarised below:
Provisional
fair value
Measurement at
Book value adjustments 2 February
GBP000 GBP000 2013
GBP000
Acquiree's net assets at the
acquisition date:
Intangible assets 105 495 600
Property, plant & equipment 60 20 80
Inventories 347 253 600
Trade and other receivables 88 (48) 40
Trade and other payables - (720) (720)
Net identifiable assets 600 - 600
-------------------------------- ------------- -------------- ------------
Non-controlling interest (12%) (72)
Goodwill on acquisition 72
-------------------------------- ------------- -------------- ------------
Consideration paid - satisfied
in cash 600
-------------------------------- ------------- -------------- ------------
8. Accounts
The financial information set out above does not constitute the
Group's statutory accounts for the 53 weeks ended 2 February 2013
or 52 weeks ended 28 January 2012 but is derived from those
accounts. Statutory accounts for the 52 weeks ended 28 January 2012
have been delivered to the Registrar of Companies, and those for
the 53 weeks to 2 February 2013 will be delivered in due course.
The auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
Copies of full accounts will be sent to shareholders in due
course. Additional copies will be available from JD Sports Fashion
Plc, Hollinsbrook Way, Pilsworth, Bury, Lancashire, BL9 8RR or
online at www.jdplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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