JD Sports returns to LFL sales growth

21st Sep 2011 07:26

JD Sports, the sports fashion retailer, saw like-for-like sales decline 1.6% in the first six months of 2011 but it has been picking up the pace in the second half of the year, with a return to like-for-like sales growth.Total revenues were up 14.6% on the same period last year to £439.8m, helped by the recent acquisitions of Champion Sports in Ireland and Sprinter in Spain in the first half of this year.Operating profit fell 12.7% to £16.25m and underlying pre-tax profit, which excludes exceptional items, fell 17.3% to £16.04m from £19.39m in the first half of last year. With exceptional items included, pre-tax profit increased by 20.6% to £20.1m from £16.63m last year.Gross margins declined slightly to 48.0% from 48.2% in the first half of last year, although the company explained that this is due to the higher proportion of total sales generated by the lower margin distribution segment of the business rather than a decline in overall retail margins. "This has been an excellent performance given the current pressures on margin but, looking forward, we still have tough margin comparatives in the second half of the year," said executive chairman Peter Cowgill.JD Sports has £19.2m in cash in the bank, down significantly on 2010 (£34.5m), following an investment of just over £12m on a new warehouse in Rochdale.Cowgill said that "trading conditions remain tough" although he pointed out that like-for-like (LFL) sales had grown by 3.3% since the end of the reporting period, with LFL sales up 2.5% in the Sports stores and up 7.4% in the Fashion outlets. Excluding the impact of value added tax, the net revenues have increased in the seven weeks to 17 September by 1.6% (+1.0% Sports Fascias; +5.0% Fashion Fascias)."The result for the full year remains very dependent on the sales and margin performance in December and January," Cowgill added.The interim dividend has been increased by 7.9% to 4.1p (from 3.8p last year.BS