14 September 2021
JD SPORTS FASHION PLC
UNAUDITED INTERIM RESULTS
FOR THE TWENTY SIX WEEKS TO 31 JULY 2021
JD Sports Fashion Plc (the 'Group'), the leading retailer of sports, fashion and outdoor brands, today announces its interim results for the 26 weeks ended 31 July 2021 (comparative figures are shown for the 26 week period ended 1 August 2020).
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|
IFRS 16 |
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Proforma IAS 17 |
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|
2021 |
|
2020 |
|
2021 |
|
2020 |
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|
£m |
|
£m |
|
£m |
|
£m |
|
|
|
|
|
|
|
|
|
|
Revenue |
3,885.8 |
|
2,544.9 |
|
3,885.8 |
|
2,544.9 |
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|
|
|
|
|
|
|
|
|
Gross profit % |
48.5% |
|
45.6% |
|
48.5% |
|
45.6% |
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|
|
|
|
|
|
|
|
|
EBITDA* |
746.4 |
|
337.0 |
|
554.3 |
|
148.9 |
|
Depreciation / amortisation |
(274.7) |
|
(241.6) |
|
(99.4) |
|
(73.2) |
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|
|
|
|
|
|
|
|
|
Operating profit (before exceptional items)* |
471.7 |
|
95.4 |
|
454.9 |
|
75.7 |
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Net interest expense |
(32.2) |
|
(33.5) |
|
(3.4) |
|
(2.9) |
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|
|
|
|
|
|
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Profit before tax and exceptional items* |
439.5 |
|
61.9 |
|
451.5 |
|
72.8 |
|
Exceptional items |
(74.9) |
|
(20.4) |
|
(74.9) |
|
(27.9) |
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|
|
|
|
|
|
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Profit before tax |
364.6 |
|
41.5 |
|
376.6 |
|
44.9 |
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|
|
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Basic earnings per ordinary share |
22.19p |
|
3.85p |
|
23.35p |
|
4.08p |
|
Adjusted earnings per ordinary share* |
29.16p |
|
6.09p |
|
30.33p |
|
6.32p |
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Interim dividend payable per ordinary share |
– |
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– |
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– |
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– |
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|
|
|
|
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Net cash at period end (b) |
995.1 |
|
764.9 |
|
995.1 |
|
764.9 |
a) Throughout this release '*' indicates the first instance of an alternative performance measure which is explained at the end of these interim results.
b) Net cash consists of cash and cash equivalents together with interest-bearing loans and borrowings.
Group Highlights
· Record result for the first half with profit before tax and exceptional items of £439.5 million (2020: £61.9 million; 2019: £158.6 million) including significant contributions from:
o United States where the aggregate profit before tax and exceptional items increased to £245.0 million (2020: £73.4 million; 2019: £35.7 million) which includes a total contribution of £72.9 million from the recently acquired Shoe Palace and DTLR businesses. All of the Group's businesses have successfully capitalised on the favourable trading conditions provided by a second round of fiscal stimulus from the Federal Government
o JD business in the core UK and Republic of Ireland market where the profit before tax and exceptional items increased to £170.8 million (2020: £52.0 million; 2019: £114.9 million) with a strong retention of sales through digital channels in the first quarter whilst the stores were temporarily closed, combined with strong pent-up demand after reopening
· Significant acquisitions in the period include:
o DTLR which enhances the Group's exposure to key consumer demographics in the highly important East Coast market in the United States
o Marketing Investment Group in Poland to give the Group a presence in Eastern Europe for the first time
· International development of JD in other markets continues to progress positively, although the pace of new stores has been impacted by the ongoing restrictions on construction and fit out works in certain markets:
o 21 new JD stores opened across Western Europe
o Six new JD stores in the Asia Pacific region with four new stores in Australia and two stores in Thailand
o 66 stores now trading as JD in the United States
· Outdoor returned to profitability delivering a profit before tax and exceptional items of £10.8 million (2020: loss of £16.8 million)
· Commenced a major programme to enhance the logistics network across the UK and Western Europe with long term leases being progressed on two new major facilities:
o Derby (UK): 515,000 sqft facility which will be dedicated to the fulfilment of online orders for JD in the UK with initial go live anticipated by Autumn 2022 and full operational use in early 2023
o Heerlen (the Netherlands): 620,000 sqft facility which will process substantially all of the volume required for stores and online orders in Western Europe with initial go live anticipated by Autumn 2023 and full operational use by mid-2024
· No interim dividend declared, with a potentially larger full year dividend subject to the performance of the Group over the full year, taking into account the consequences of any potential further restrictions on trading
· Forecast outturn headline profit before tax for the full year of at least £750 million
· Key financial information of the two business segments is tabulated below:
Period to 31 July 2021
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Sports Fashion |
|
Outdoor |
|
Unall2 |
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Total |
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|
IFRS 16 |
IAS 17 |
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IFRS 16 |
IAS 17 |
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|
IFRS 16 |
IAS 17 |
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|
£m |
£m |
|
£m |
£m |
|
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
|
|
|
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Revenue |
3,650.6 |
3,650.6 |
|
235.2 |
235.2 |
|
– |
|
3,885.8 |
3,885.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit % |
48.8% |
48.8% |
|
44.3% |
44.3% |
|
– |
|
48.5% |
48.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
722.2 |
538.1 |
|
24.2 |
16.2 |
|
– |
|
746.4 |
554.3 |
|
Depreciation |
(245.2) |
(77.3) |
|
(10.6) |
(3.2) |
|
– |
|
(255.8) |
(80.5) |
|
Amortisation1 |
(17.2) |
(17.2) |
|
(1.7) |
(1.7) |
|
– |
|
(18.9) |
(18.9) |
|
|
|
|
|
|
|
|
|
|
|
|
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Operating profit |
459.8 |
443.6 |
|
11.9 |
11.3 |
|
– |
|
471.7 |
454.9 |
|
Net interest expense |
(27.7) |
– |
|
(1.1) |
– |
|
(3.4) |
|
(32.2) |
(3.4) |
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|
|
|
|
|
|
|
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|
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|
Profit / (loss) before tax and exceptional items |
432.1 |
443.6 |
|
10.8 |
11.3 |
|
(3.4) |
|
439.5 |
451.5 |
|
Exceptional items |
(74.9) |
(74.9) |
|
– |
– |
|
– |
|
(74.9) |
(74.9) |
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|
|
|
|
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|
|
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|
|
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Profit / (loss) before tax |
357.2 |
368.7 |
|
10.8 |
11.3 |
|
(3.4) |
|
364.6 |
376.6 |
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1 This is a non-trading charge relating to the amortisation of various fascia names and brand names which arise consequent to the accounting of acquisitions made over a number of years.
2 The Group considers that net funding costs are cross divisional in nature and cannot be allocated between the segments on a meaningful basis.
Period to 1 August 2020
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|
Sports Fashion |
|
Outdoor |
|
Unall2 |
|
Total |
|||
|
|
IFRS 16 |
IAS 17 |
|
IFRS 16 |
IAS 17 |
|
|
|
IFRS 16 |
IAS 17 |
|
|
£m |
£m |
|
£m |
£m |
|
£m |
|
£m |
£m |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
2,402.4 |
2,402.4 |
|
142.5 |
142.5 |
|
– |
|
2,544.9 |
2,544.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit % |
45.9% |
45.9% |
|
40.5% |
40.5% |
|
– |
|
45.6% |
45.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
333.1 |
157.8 |
|
3.9 |
(8.9) |
|
– |
|
337.0 |
148.9 |
|
Depreciation |
(220.8) |
(65.3) |
|
(16.9) |
(4.0) |
|
– |
|
(237.7) |
(69.3) |
|
Amortisation1 |
(2.9) |
(2.9) |
|
(1.0) |
(1.0) |
|
– |
|
(3.9) |
(3.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit / (loss) |
109.4 |
89.6 |
|
(14.0) |
(13.9) |
|
– |
|
95.4 |
75.7 |
|
Net interest expense |
(27.8) |
– |
|
(2.8) |
– |
|
(2.9) |
|
(33.5) |
(2.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) before tax and exceptional items |
81.6 |
89.6 |
|
(16.8) |
(13.9) |
|
(2.9) |
|
61.9 |
72.8 |
|
Exceptional items |
– |
– |
|
(20.4) |
(27.9) |
|
– |
|
(20.4) |
(27.9) |
|
|
|
|
|
|
|
|
|
|
|
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|
Profit / (loss) before tax |
81.6 |
89.6 |
|
(37.2) |
(41.8) |
|
(2.9) |
|
41.5 |
44.9 |
Peter Cowgill, Executive Chairman, said:
“The Group continues to demonstrate outstanding resilience in the face of numerous challenges arising from the continued prevalence of the COVID-19 pandemic in many countries, widespread strain on international logistics and other supply chain challenges, materially lower levels of footfall into stores in many countries after reopening and the ongoing administrative and cost consequences resulting from the loss of tariff free, frictionless trade with the European Union. Given these challenges, the record result that the Group has delivered in the first half with a profit before tax and exceptional items of £439.5 million (2020: £61.9 million; 2019: £158.6 million) is extremely encouraging.
“It is most reassuring that the core JD business in the UK and Republic of Ireland performed strongly in the first half delivering a profit before tax and exceptional items of £170.8 million (2020: £52.0 million; 2019: £114.9 million).This result also includes a particularly strong performance from the Group's banners in the United States which have delivered a combined profit before tax and exceptional items of £245.0 million (2020: £73.4 million; 2019: £35.7 million).
“Ultimately, the Group is at the pinnacle of the global sports fashion industry with consumers instinctively knowing that our retail propositions focus on their fashion desires and aspirations in both footwear and apparel, with an agile multichannel ecosystem delivering the highest standards of retail execution and consumer experience. This is respected by the international brands who regularly call JD out as a premier global strategic partner.
“We remain absolutely confident that our inherent strengths in retail dynamics and operations provide us with a robust platform to make further progress.
“At this time, we are generally encouraged by our performance in the first few weeks of the second half although retail footfall remains comparatively weak in many countries. Assuming a prudent but realistic set of assumptions for the peak trading period ahead which take into account the absence of stimulus in the United States for the second half of the year, in addition to current industry-wide supply chain challenges, we presently anticipate delivering a headline profit before tax for the full year of at least £750 million.
“The JD brand is increasingly recognised on a global basis and this result bears testimony to the underlying strength of our business. I would like to express my sincere thanks and gratitude to everyone in all of our Group businesses for their remarkable contribution in delivering these excellent results during such a challenging period.”