JD Sports 'extremely cautious' despite higher profits

13th Apr 2011 07:07

Teen outfitter JD Sports Fashion hiked its dividend by about 30% after reporting a sharp rise in profits but said it is "extremely cautious" on the outlook after a tough start to the current year.The sports-themed fashion retailer posted a pre-tax profit of £78.6m in the year to 29 January, up from £61.4m the previous year, on revenues that rose to £883.7m from £769.8m. The full-year dividend is upped to 23p from 18p.The pre-tax profit figure was in line with expectations.The company's main chain JD Sports saw total revenues rise by 8% £667.2m from £615.5m, with like-for-like sales (which strips out the impact of new openings) up by 3.8%. Gross margins rose to 51% to 50.6% due to "continued improvement in the terminal stock position."Total revenues at JD's Bank and Scotts fashion outlets rose to £102.4m from £82.8m as the portfolio grew to 74 shops from 65.However, things have become tougher in the current year. Net sales were down 1.2% year-on-year in the eight weeks to 26 March. "Following successive years of record results for the group, the retail environment has recently been significantly impacted by adverse fiscal changes in addition to the multiple current economic pressures. Our core business already possesses very strong sales densities and margins, being the result of continual growth in both measures for several years," said chairman Peter Cowgill. "Against that background, therefore, it is inevitable that the board is extremely cautious in its outlook, particularly when the profits achieved for the year to 29 January 2011 are effectively rebased purely as a result of the impact of increased VAT."RG