JD Sports' half-time score beats forecasts, boosted by World Cup

• JD Sports Fashion reported a 36.5 per cent increase in first-half profits

The group, which trades as JD Sports, Chausport, Size, Bank and Scotts from more than 530 stores, posted an underlying pre-tax profit of 19.4 million for the six months to 31 July, up from 14.2m a year earlier.

Yesterday's interims also revealed an 18.5 per cent surge in group sales to 383.9m. JD, which ended the period with net cash of 34.5m, is paying an interim dividend of 3.8p a share, up 15.2 per cent.

The group has been one of the strongest performers during the recession, cashing in on strong demand from its core audience of label-conscious teenagers and twenty-somethings. Store takings during the period under review were further boosted by sales of World Cup merchandise, with fans snapping up replica shirts and accessories.

Freddie George, a retail analyst at stockbroker Seymour Pierce, which has a "buy" rating on JD, described the results as "excellent" and said the group had beaten market forecasts.

"The stock remains significantly undervalued, in our view," he said. "Earnings will continue to benefit from the development of the company's own-label ranges, growth in the internet offer and the development of the wholesaling activities."

Graham Spooner, investment adviser at The Share Centre, said JD continued to be a good buy for investors. "In this climate, these are impressive results and it is good to note the increased dividend," he said.

JD - recently promoted to the FTSE 250 index - said current trading in the UK and Ireland "continued to be satisfactory".

Like-for-like sales in the first four weeks of its second half rose 2.7 per cent, with sports stores ahead 2.1 per cent and fashion, which trades as Bank and Scotts, up by 7.1 per cent.

The firm said it was optimistic that its 73-strong French Chausport chain - acquired last year - and potential overseas moves will further improve the sports side of the business.

It added that refurbishments before the period meant the sports stores had a more "consistent quality, look and feel". Eleven stores were opened in the UK, compared with five last year.

The group said a change in management at Scotts, which sells branded fashion to younger men, should lead to improvements in the chain, which has 37 stores across the country.

JD embarked on an overseas buying spree last year, following up the Chausport acquisition by snapping up rugby brands Canterbury and Canterbury of New Zealand as well as related distribution assets. The group said the Canterbury brand, which sells clothing, footwear and accessories, generated a small profit. It also bought Kooga Rugby and Duffer, which it now uses as an own brand label in its JD stores.

Stripping out exceptional items, JD's pre-tax profits were 64.3 per cent higher at 16.6m.

Chairman Peter Cowgill said: "We are up against tough comparatives over the balance of the year and the economic outlook remains uncertain but the good foundation of these first-half results and our strong cash position mean both that we have proposed another significant dividend increase, and we are well positioned for further internal and external investment in our growth."