JD Sports sees profits surge

Peter Cowgill said he was delighted with the results

The group saw pre-tax profits hit £100 million for the first time after a 22 per cent rise for the year to the end of January. Like-for-like sales for its main sports outlets were up 13 per cent with what it described as positive momentum in all of its territories.

The growth was driven by a buoyant market for branded athletic footwear across western Europe and what the company described at “excellent buying and merchandising performance”.

However, its outdoor chains, which include Blacks and Millets as well as Tiso, continued to struggle and were affected by mild and dry weather in the second half of the year – though operating losses in the division narrowed by £3.1m to £4.9m. But JD Sports said it remained confident about the longer-term prospects for Tiso.

Executive chairman Peter Cowgill said: “I am delighted to report our continuing operations have delivered a record result for the year with a headline profit before tax and exceptional items in excess of £100m for the first time. This result and its ingredients provide a robust platform for further profitable growth, at home and internationally.”

Cowgill said the figures had been driven by an “outstanding performance” in its sports fashion chains, where he said the company’s offer “continues to enthuse and excite both customers and suppliers”.

He said the group was “well positioned to exploit successfully the opportunities that exist for continued profitable growth”.

The final dividend was hiked by 4.2 per cent to 5.9p a share.

The group had 660 sports fashion stores at the end of the financial year, including 351 JD Sports outlets in the UK and Ireland. A new store will open in London’s Oxford Street later in the year. There are 184 outdoor stores.

Expansion in Europe continued with some 19 new stores for JD Sports and the Size chain, taking the number on the continent to 70.

An “encouraging improvement” in the first half at Blacks and Millets was followed by weaker sales of autumn and winter ranges in the second half “during a particularly mild and dry season”, followed by heavy discounting.

The year also saw JD dispose of its loss-making Bank fashion chain in November, which two months later went into administration. The disposal resulted in a pre-tax exceptional hit to the group of £6.3m. Bank’s results were treated as discontinued operations, with a loss of £15.8m.

Analyst Kate Calvert at Investec, which has a “buy” rating on the stock and raised its price target to 680p, described the figures for the sports business as “outstanding”.

“Demand for footwear was strong across the UK and momentum appears to be coming through from the European businesses as well,” she said.

Shares closed up 29.5p, or 5.8 per cent, at 539p.

The Tiso family sold a controlling interest in the Edinburgh-based chain of stores to JD Sports in November 2013. The company has remained based in Scotland, with the Tiso family retaining a shareholding in the company.

Tiso, which also includes the Alpine Bikes brand, was founded in 1962 by mountaineer Graham Tiso and his wife Maude, who launched it in the back room of a boat shop until they acquired their first shop in Edinburgh.