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JD Sports Fashion (JD.)

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Wednesday 13 April, 2011

JD Sports Fashion

Final Results

RNS Number : 7959E
JD Sports Fashion Plc
13 April 2011
 



13 April 2011                                                                   

 

 

JD SPORTS FASHION PLC

PRELIMINARY RESULTS

FOR THE 52 WEEKS ENDED 29 JANUARY 2011

 

 

JD Sports Fashion Plc (the 'Group'), the leading retailer and distributor of sport and athletic inspired fashion apparel and footwear, today announces its Preliminary Results for the 52 weeks ended 29 January 2011.

 

 

 


2011

£000


2010

£000

 

% Change

 

Revenue

 

883,669


 

769,785

 

+15%

 

Gross profit %

 

49.5%


 

49.3%


 

Operating profit (before exceptional items)

 

79,927


 

67,294

 

+19%

 

Share of results of joint venture before exceptional items

(net of income tax)

 

1,475


 

539


 

Net financial income / (expenses)

 

163


 

(442)


 

Profit before tax and exceptional items

 

81,565


 

67,391

 

+21%

 

Exceptional items (see note 3)

 

(4,284)


 

(4,986)


 

Share of exceptional items of joint venture (net of income tax) (a)

 

1,348


 

(1,012)


 

Profit before tax

 

78,629


 

61,393

 

+28%

 

Basic earnings per ordinary share

 

114.84p


 

88.16p

 

+30%

 

Adjusted basic earnings per ordinary share (see note 5)

 

116.86p


 

93.64p

 

+25%

 

Total dividend payable per ordinary share

 

23.00p


 

18.00p

 

+28%

 

Net cash at end of period (b)

 

86,140


 

60,465

 

 

 

a)   The exceptional items in the current year relate to unrealised gains on foreign exchange contracts and the reversal of the impairment of the investment held by Focus Brands Limited in Focus Group Holdings Limited, following repayment of original purchase consideration by the vendors of Focus Group Holdings Limited.  The exceptional items in the prior year relate entirely to unrealised losses on foreign exchange contracts.

b)   Net cash consists of cash and cash equivalents together with interest-bearing loans and borrowings.

 

 

 

 


Highlights

 

·      Total revenue increased by 14.8% to £883.7 million (2010: £769.8 million) with like for like revenue increased by 3.1% (Sports Fascias 3.8%; Fashion Fascias -0.7%)

 

·      Gross margin improved to 49.5% (2010: 49.3%) with increased margin in all reporting segments although the increase is diluted by greater participation in Group performance from lower margin distribution businesses which now represent 9.5% of Group revenue (2010: 5.4%)

 

·      Group profit before tax and exceptional items up 21% to £81.6 million (2010: £67.4 million)

 

·      Profit before tax up 28% to £78.6 million (2010: £61.4 million)

 

·      Net cash position at the period end increased to £86.1 million (2010: £60.5 million)

 

·      Acquisition of Sonneti, Chilli Pepper and Nanny State brands

 

·      Capital expenditure increased by £10.1m to £33.0m (2010: £22.9m) which included the first three JD stores in France

 

·      The new leased warehouse building shell in Rochdale (866,250 sq ft including mezzanines) has now been handed over by the developers and the fit out process has started. Total anticipated fit out costs are approximately £20.0m of which £3.9m was incurred in the year. The move to full operational use will be phased through the early months of 2012

 

·      Final dividend payable increased by 31% to 19.2p (2010: 14.7p) bringing the total dividends payable for the year up to 23.0p (2010: 18.0p), an increase of 28% with a cumulative rise of 92% over the last two years

 

·      Acquisition of Champion completed post year end, enhancing presence in the Republic of Ireland

 

 

Peter Cowgill, Executive Chairman, said:

 

"The year ended 29 January 2011 has been the seventh successive year of good progress in revenue and profitability for the Group. Profit before tax and exceptional items improved by 21% to £81.6 million (2010: £67.4 million). Such sustained performance continues to reflect the strength and uniqueness of our brand and fascia offers as well as the strength of our management teams. Our very strong cash position has also allowed us to continue to invest in brands, our store portfolios and new businesses during the year and since the year end. 

 

"Confidence arising from the sustained period of results improvement and the strength of our balance sheet has enabled the Board to propose another significant increase in the level of dividends with a final proposed dividend increase of 31% to 19.2p (2010: 14.7p) bringing the total dividends payable for the year to 23.0p (2010: 18.0p), an increase of 28% following on from the rises of 50% and 41% in the last two years.

 

"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. 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.

 

"Management remain highly focused on all avenues of revenue growth, margin protection and cost control available to us to endeavour to deliver the optimum outturn, minimise the impact of the factors above, and with a strong balance sheet and dominant market position in our core business, we expect to be able to deliver operational and financial progress for the Group over the long term."

 

 

Enquiries:

JD Sports Fashion Plc                                                                                        Tel:  0161 767 1000

Peter Cowgill, Executive Chairman

Barry Bown, Chief Executive Officer

Brian Small, Finance Director

 

MHP Communications                                                                                        Tel:  020 3128 8100

Andrew Jaques

Barnaby Fry

Ian Payne



Executive Chairman's Statement

 

Introduction

 

The year ended 29 January 2011 has been the seventh successive year of good progress in revenue and profitability for the Group. Profit before tax and exceptional items improved by 21% to £81.6 million (2010: £67.4 million). Such sustained performance continues to reflect the strength and uniqueness of our brand and fascia offers as well as the strength of our management teams. Our very strong cash position has also allowed us to continue to invest in brands, our store portfolios and new businesses during the year and since the year end.  

 

Group profit before tax increased by 28% in the year to £78.6 million (2010: £61.4 million) and Group profit after tax has increased by 31% to £55.9 million (2010: £42.7million).

 

Group operating profit (before exceptional items) for the year was up 19% to £79.9 million (2010: £67.3 million) and comprises a Sports Fascias profit of £73.3 million (2010: £64.1 million), a Fashion Fascias profit of £6.4 million (2010: £3.3 million) and a Distribution segment profit of £0.2 million (2010: loss of £0.1 million).

 

The year end net cash position has risen to £86.1 million (2010: £60.5 million). The Group has recently negotiated terms on new committed rolling credit and working capital facilities totalling £75 million. These new facilities expire in October 2015 and when combined with our cash resources give the Group the funding capability to continue to develop operationally and by acquisition both in the United Kingdom and overseas. Confidence arising from the sustained period of results improvement and the strength of our balance sheet has enabled the Board to propose another significant increase in the level of dividends with a final proposed dividend increase of 31% to 19.2p (2010: 14.7p) bringing the total dividends payable for the year to 23.0p (2010: 18.0p), an increase of 28% following on from the rises of 50% and 41% in the last two years.

 

 

Acquisitions

 

The Sports and Fashion retail offers continue to provide consumers with a unique mix of sports and fashion brands in both apparel and footwear including a substantial range of exclusive products as well as exclusive licensed and own brands such as McKenzie and Carbrini. We have continued to invest in increasing the own brand offers through the acquisition of the Sonneti, Chilli Pepper, and Nanny State brands for a total consideration of £2.1 million. Since the year end we have continued this strategy by acquiring the Fenchurch brand for £1.1 million.

 

The strength of the JD offering gives potential for further replication internationally, albeit in Europe initially. We see this as a key opportunity wherever brands recognise our strength in developing brands and maintaining their prestige. We started to exploit this opportunity when we acquired the French retailer Chausport in May 2009. The first full year since the acquisition contributed £36.4 million of revenue and £0.5 million of operating profit. Like for like sales grew by 12.5% in the year and gross margin improved by 2.7% but overheads increased to support the opening of three JD stores in France which opened late in the year. These latter stores are performing to expectations so far.

 

We are looking at potential acquisitions and joint ventures in other territories on a regular basis and we have no doubt that the Chausport acquisition has enhanced our visibility and credibility as an overseas investor. Since the year end we have acquired a further Sports Fascia chain in the Republic of Ireland, Champion Sports (Holdings) ('Champion'), for a nominal amount and have also advanced €17.1 million to allow it to settle all of its indebtedness save for €2.5 million of leasing finance. This has added 22 stores to the 8 already operated in the Republic of Ireland and gives us a significant market position throughout the whole of Ireland. It also gives us more local knowledge and a strong management team on the ground.

 

After the year end we also acquired 80% of Kukri Sports Limited which provides a bespoke teamwear offering across a wide range of sports in a number of countries.

 

Sports Fascias

 

The Sports Fascias' total revenue increased by 8% during the period to £667.2 million (2010: £615.5 million) with like for like sales for the year up by a further 3.8% (2010: 2.3%).

 

Gross margin achieved in the Sports Fascias increased from 50.6% to 51.0% which we attribute to the continued improvement in the terminal stock position in JD plus the impact from the extension of enhanced Group supplier terms into the Chausport business.

 

As a result of this improved margin and continuing enhancement of the store portfolio and its efficiencies, the operating profit (before exceptional items) of the Sports Fascias rose to £73.3 million (2010: £64.1 million) in the year, including a contribution of £0.5 million from Chausport (2010: £0.7 million). The contribution from Chausport is lower than the previous year due to the seasonal losses incurred in the early part of the year which were pre-acquisition in the prior year.

 

The programme of store development has continued with 28 store openings and 24 refurbishments or conversions. These include the opening of our first 3 JD stores in France (of which 1 was a conversion of a former Chausport store in Lille), 5 new Chausport stores, 2 new Size? stores and 3 new JD stores in airport locations. We have also opened a JD store at one of the UK's busiest train stations (Liverpool Street) which is our first store in this type of location and, if successful, could be replicated in other major stations. 21 Sports Fascias stores were closed in the period including 6 smaller Chausport stores.

 

Fashion Fascias

 

The Fashion Fascias are Bank and Scotts.

 

The Bank Fascia stores sell largely branded fashion to both males and females, predominantly for the teenage to mid twenties sector. In the year the store portfolio grew from 65 stores to 74 stores, still based predominantly in the North and the Midlands. Total revenue in the year was £102.4 million (2010: £82.8 million). This represents an organic decrease of 0.9% (2010: +4.7%) although this decrease came from trading in the first half of the year when the organic performance was measured against heavy clearance from the prior year. This reduction in clearance activity is reflected in the fact that gross margin achieved improved by a further 0.5% to 48.9% (2010: 48.4%) after an increase of 2.3% in the prior year. Operatingprofit (before exceptional items) was £5.2 million (2010: £3.0 million). The Board remains confident that there is a significant opportunity to grow operating margin in this Fascia through better stock management, own brand development and disciplined store rollout although this will be challenging in 2011 as a result of VAT, cotton and other fibre price increases and changes in brand distribution policy.

 

The Scotts Fascia stores sell branded fashion to older more affluent males and there were 37 stores at the year end, largely in the North and the Midlands. Total revenue in the year was £31.7 million (2010: £31.8 million) which was flat organically. However, the balance of trading towards full price full margin improved significantly driving an increase in the gross margin achieved to 49.5% (2010: 47.4%). This has led to an improved operating result with operating profit (before exceptional items) of £1.2 million (2010: £0.3 million).

 

 

Distribution

 

The Distribution businesses delivered a small operating profit of £0.2 million (2010: loss of £0.1 million) with a profit from Canterbury offset by ongoing investment to build Getthelabel.com within Topgrade, and by losses incurred in Kooga's quietest trading period of the year, much of which fell prior to its acquisition last year.

 

Canterbury delivered an operating profit of £1.1 million (2010: £0.1 million) on total revenues of £48.3 million (2010: £15.4 million) with a strong performance in both Australia and New Zealand where the brand was more sheltered from the events that led to the administration of the former UK based Canterbury business in 2009. The brand is still rebuilding its global network and it is hoped that longer term gains will come from the new licences in South Africa and Argentina, and the launch of a UK based business (in which we are the 75% majority shareholder) focusing on developing a more fashion based product offer to leverage the brand's image and credibility. Canterbury will be providing the kit for 4 teams at the forthcoming Rugby World Cup and the Board are confident that this global exposure will enhance the reputation and penetration of the Brand.

 

The Getthelabel.com online and catalogue business within Topgrade has now been trading for over a year. Its sales progress is encouraging and on schedule but the marketing and other investment required to achieve this means that we believe it could take a further two years before it has sufficient critical mass to deliver profits to the Group. This is not unusual in such businesses and we remain optimistic about the long term profitability of this venture. As a consequence of this, sales rose to £26.6 million (2010: £19.7 million) but losses rose to £0.8 million (2010: £0.4 million) in the year. This was in line with our expectations and we subsequently increased our stake in Topgrade from 51% to 80% during the year at a cost of £1.2 million.

 

Kooga Rugby went through a difficult period under its previous ownership and a lot of effort has been focused on improving control over the commerciality of the sponsorship properties and the profitability of product ranges and accounts. An operating loss of £0.3 million was recorded for the year (2010: profit of £0.2 million for the post-acquisition period) on sales of £6.5 million (2010: £5.0 million). We have strengthened the management team which we believe will lead to improvements in operating performance in due course.

 

Nicholas Deakins recorded a profit of £0.2 million (2010: £0.0 million) on turnover of £3.4 million (2010: £2.5 million) in the year.

 

 

Joint Venture

 

Focus Brands Limited, is involved in the design, sourcing and distribution of footwear and apparel both for own brand and under license brands for both group and external customers. Our share of operating results for the year was an operating profit before exceptional items and after tax of £1.5 million (2010: £0.5 million).

 

The exceptional items in the current year relate to unrealised gains on foreign exchange contracts and the reversal of the impairment of the investment held by Focus Brands Limited in Focus Group Holdings Limited, following repayment of original purchase consideration by the vendors of Focus Group Holdings Limited.  The exceptional items in the prior year relate entirely to unrealised losses on foreign exchange contracts.

 

After the year end we increased our holding in this business to 80% at an initial cost of £1.0 million with potential further deferred consideration of £250,000 depending on performance. The performance of this business will be included in the Distribution segment in future.

 

 

Group Performance

 

Revenue

 

Total revenue increased by 14.8% in the year to £883.7 million (2010: £769.8 million) principally as a result of three factors: the Group's positive like for like sales performance of 3.1%, a net increase of 15 stores and £41.5 million of sales from the pre acquisition period of the Chausport, Canterbury and Kooga businesses.

 

Gross margin

 

Gross margin achieved increased in all segments. However, an increase in the participation of the lower margin distribution businesses within the Group's overall performance from 5.4% to 9.5% means that the growth in overall Group gross margin was limited to 0.2%.

 

 

Operating profits

 

Operating profit (before exceptional items) increased by £12.6 million to £79.9 million (2010: £67.3 million), a 19% increase on last year which follows a 24% rise in the previous year. Group operating margin (before exceptional items) has therefore increased by a further 0.3% to 9.0% (2010: 8.7%).

 

Following a decrease in the exceptional items to £4.3 million (2010: £5.0 million), Group operating profit rose from £62.3 million to £75.6 million.

 

The exceptional items (excluding share of exceptional items in joint venture) comprise:                                         



 

 


 £m



Impairment of investment property

1.0

Loss on disposal of fixed assets

1.5

Onerous lease provision

1.8



Total exceptional charge

4.3



 

The impairment of investment property relates to a writedown in the valuation of the St Albans warehouse occupied by Focus.

 

The loss on disposal includes both closed stores and assets written off in refurbished stores.

 

The charge for onerous lease provisions includes £1.1 million for non-trading stores and £0.7 million for trading stores.

 

Working capital and financing

 

As a consequence of having net cash throughout the year, the Group has net financing income of £0.2 million compared to net financing costs in the prior year of £0.4 million.

 

Year end net cash of £86.1 million represented a £25.6 million improvement on the position at January 2010 (£60.5 million).

 

Net capital expenditure including disposal costs and premia received increased in the year to £32.4 million (2010: £23.0 million) with capital expenditure excluding disposal costs increasing by £10.1 million to £33.0 million (2010: £22.9 million). This increase was focused on the core Sports Fascias where the spend increased by £10.7 million to £25.6 million which included an additional £3.9 million in the French business combined with £3.9 million of spend connected with the new 866,250 sq ft warehouse (616,250 sq ft footprint) at Kingsway, Rochdale. The Board anticipate that approximately £15 million will be incurred in the year to 28 January 2012 on fitting out of the warehouse. The demonstrable success of investing in the store portfolio means that we anticipate maintaining spend on the stores at the current level.

 

Spend in the Fashion fascias decreased slightly by £0.7 million to £6.7 million. This decrease does not mean that the Group is reducing its investment in the Fashion fascias and is more a function of availability of appropriate property and the timing of the projects.

 

Working capital remains well controlled with suppliers continuing to be paid to agreed terms and settlement discounts taken whenever due.

 

 

Store Portfolio

 

We have made a further significant investment in the store portfolio during the year with expenditure on both new stores and refurbishments of existing space. We have also continued to rationalise our store portfolio wherever possible but, with the current economic climate impacting heavily on retail property occupancy levels, it remains very difficult to dispose of underperforming and/or duplicate stores.

 

There was a net increase of 6 stores in the UK & Ireland JD & Size? portfolios with 21 new stores offset by 15 closures. Our overall presence has increased in France by 1 store with 7 new stores (including 2 JD stores in Paris and Lyon) offset by the closure of 6 smaller Chausport stores. In addition, one Chausport store has been converted to the JD 'King of Trainers' format in Lille and the success of that trial means that we will convert a further 2 Chausport stores (in Angers and Amiens) to this format in the current period.

 

There was a net addition of 9 stores in the Bank fascia with 13 store openings offset by the closure of 4 stores. A loss making duplicate Scotts store in Chester was also closed in the period.

 

We have refurbished a total of 29 stores in the year (including 3 stores where space has been transferred between fascias). This means that over the last four years we have opened a total of 108 stores and refurbished a further 123 stores.

 

During the year, store numbers (excluding trading websites) moved as follows:

 

Sports Fascias                                                                               


JD & Size? (UK & Eire)


JD (France)


Chausport


Total


Units

000 sq ft


Units

000 sq ft


Units

000 sq ft


Units

000 sq ft

 













 

Start of year

345

1,100


-

-


75

78


420

1,178

 

New stores

21

65


2

4


5

10


28

79

 

Transfers (1)

-

(1)


1

1


(1)

(1)


-

(1)

 

Closures

(15)

(35)


-

-


(6)

(6)


(21)

(41)

 

Remeasures

-

2


-

-


-

(2)


-

-

 













 

Close of year

351

1,131


3

5


73

79


427

1,215

 

 

(1)  One JD store (Cardiff) was transferred to Bank in the period offset by the transfer of one store from Bank to JD (Sutton Coldfield). One former Chausport store (Lille) was converted into a JD store.

 

Fashion Fascias


Bank


Scotts


Total


Units

000 sq ft


Units

000 sq ft


Units

000 sq ft










Start of year

65

176


38

85


103

261

New stores

13

42


-

-


13

42

Transfers

-

1


-

-


-

1

Closures

(4)

(9)


(1)

(6)


(5)

(15)

Remeasures

-

-


-

(3)


-

(3)










Close of year

74

210


37

76


111

286

 

                                                                          

Dividends and Earnings per Share

 

The Board proposes paying a final dividend of 19.20p (2010: 14.70p) bringing the total dividend payable for the year to 23.00p (2010: 18.00p) per ordinary share. The proposed final dividend will be paid on 1 August 2011 to all shareholders on the register at 6 May 2011. The final dividend has been increased by 31% with total dividends payable for the year increased by 28%. This follows a 50% increase in the full year dividend in the prior year.

 

The adjusted earnings per ordinary share before exceptional items were 116.86p (2010: 93.64p).

 

The basic earnings per ordinary share were 114.84p (2010: 88.16p).

 

 

Employees

 

As ever, after another record year, it is right to give credit and thanks to all our employees around the world for delivering such exceptional results. We remain committed to continuing to develop their skills and prospects through our success, training and quality of operation.

 

 

Current Trading and Outlook

 

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. Specifically, the increase in VAT for the year to 28 January 2012 means that the same level of gross takings will produce a contribution of approximately £16 million less than the previous year. Simultaneously, but quite separately, we anticipate a reduction of real expenditure levels by consumers at a time when product costs, particularly imported goods, are increasing at a material rate. 

 

Trading for the early part of the current financial year has been difficult to gauge when Easter falls three weeks later than last year.  For the 8 weeks to 26 March 2011 gross like for like sales (including e-commerce) were +0.4% whilst net sales have declined 1.2% (Sports Fascias -1.4%, Fashion Fascias +0.0%).  The decline in net sales and the resulting reduced margin are directly as a result of the fiscal changes referred to above.

 

Our core business already possesses very strong sales densities and margins, being the result of continual growth in both measures for several years. 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.

 

On the positive side the business delivers strong operating ratios and high levels of free cash generation. It has a robust balance sheet with £86.1 million net cash balances at the year end which leaves the Group well positioned to extend the retail opportunities which may arise and to continue to pursue a progressive dividend policy.

 

Management remain highly focused on all avenues of revenue growth, margin protection and cost control available to us to endeavour to deliver the optimum outturn, minimise the impact of the factors above and, with a strong balance sheet and dominant market position in our core business, we expect to be able to deliver operational and financial progress for the Group over the long term. Opportunities for profit growth overseas and development of our differentiated and own brand proposition, combined with prospects for growth in our Distribution business, all help to reduce the current threats to long term Group profitability and give us the opportunity to maintain positive long term momentum in our business.

 

A further update will be made in our Interim Management Statement no later than 17 June 2011.

 

 

 

 

 

Peter Cowgill

Executive Chairman

13 April 2011

 



 

Consolidated Income Statement

For the 52 weeks ended 29 January 2011

 



 

 

 

 

 

Note


 

52 weeks to

29 January 2011

Continuing

Operations

£000


 

52 weeks to

30 January 2010

Continuing

Operations

£000

 

Revenue




 

883,669


 

769,785

Cost of sales




(446,657)


(390,248)








Gross profit




437,012


379,537

Selling and distribution expenses - normal




(326,296)


(288,462)

Selling and distribution expenses - exceptional




(3,277)


(6,458)

Administrative expenses - normal




(32,966)


(26,051)

Administrative expenses - exceptional




(1,007)


1,472

Other operating income




2,177


2,270







Operating profit




75,643


62,308








Before exceptional items




79,927


67,294

Exceptional items


3


(4,284)


(4,986)







Operating profit




75,643


62,308








Share of results of joint venture before exceptional items (net of income tax)


 

4


 

1,475


 

539

Share of exceptional items (net of income tax)


4


1,348


(1,012)








Share of results of joint venture


4


2,823


(473)








Financial income




618


385

Financial expenses




(455)


(827)








Profit before tax




78,629


61,393

Income tax expense




(22,762)


(18,647)








Profit for the period




55,867


42,746








Attributable to equity holders of the parent




55,884


42,900

Attributable to non-controlling interest




(17)


(154)








Basic earnings per ordinary share


5


114.84p


88.16p

Diluted earnings per ordinary share


5


114.84p


88.16p

 



 

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 29 January 2011

 



52 weeks to

29 January 2011

£000


52 weeks to

30 January 2010

£000

 

Profit for the period


 

55,867


 

42,746

 

Other comprehensive income:

Exchange differences on translation of foreign operations


 

 

95


 

 

(248)






Total other comprehensive income for the period


95


(248)






Total comprehensive income and expense for the period

(net of income tax)


 

55,962


 

42,498






Attributable to equity holders of the parent


55,979


42,652

Attributable to non-controlling interest


(17)


(154)

 

 



 

Consolidated Statement of Financial Position

As at 29 January 2011



 

 

 


 

 

As at

29 January 2011

£000


As at 

30 January 2010

(restated -

see note 1)

£000

Assets







Intangible assets




58,315


50,215

Property, plant and equipment




78,120


67,434

Investment property




3,000


4,053

Other assets




13,047


13,232

Equity accounted investment in joint venture




3,458


635

Deferred tax assets




125


-

Total non-current assets




156,065


135,569








Inventories




84,490


74,475

Trade and other receivables




37,105


31,657

Cash and cash equivalents




90,131


64,524

Total current assets




211,726


170,656








Total assets




367,791


306,225








Liabilities







Interest-bearing loans and borrowings




(2,874)


(2,712)

Trade and other payables




(128,445)


(115,742)

Provisions




(2,591)


(2,920)

Income tax liabilities




(12,370)


(10,789)

Total current liabilities




(146,280)


(132,163)








Interest-bearing loans and borrowings




(1,117)


(1,347)

Other payables




(28,782)


(24,050)

Provisions




(6,437)


(7,395)

Deferred tax liabilities




-


(748)

Total non-current liabilities




(36,336)


(33,540)








Total liabilities




(182,616)


(165,703)








Total assets less total liabilities




185,175


140,522








Capital and reserves







Issued ordinary share capital




2,433


2,433

Share premium




11,659


11,659

Retained earnings




171,916


125,341

Other reserves




(1,918)


(244)








Total equity attributable to equity holders of the parent

184,090


139,189

Non-controlling interest




1,085


1,333








Total equity




185,175


140,522



 

Consolidated Statement of Changes in Equity 

For the 52 weeks ended 29 January 2011

 

           


 

Ordinary

Share Capital

£000

 

 

Share

Premium

£000

 

 

Retained

Earnings

£000

 

 

Other

 Equity

£000

Foreign Currency Translation Reserve

£000

Total Equity Attributable To Equity Holders

 Of The Parent

£000








Balance at 31 January 2009

2,433

11,659

88,378

-

4

102,474








Profit for the period

-

-

42,900

-

-

42,900








Other comprehensive income:







Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

(248)

 

(248)








Total other comprehensive income

 

-

 

-

 

-

 

-

 

(248)

 

(248)








Total comprehensive income for the period

-

-

42,900

-

(248)

42,652

Dividends to equity holders

-

-

(5,937)

-

-

(5,937)

Acquisition of non-controlling interest

 

-

 

-

 

-

 

-

 

-

 

-








Balance at 30 January 2010

2,433

11,659

125,341

-

(244)

139,189








Profit for the period

-

-

55,884

-

-

55,884








Other comprehensive income:







Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

95

 

95








Total other comprehensive income

 

-

 

-

 

-

 

-

 

95

 

95








Total comprehensive income for the period

 

-

 

-

 

55,884

 

-

 

95

 

55,979

Dividends to equity holders

-

-

(9,002)

-

-

(9,002)

Put options held by non-controlling interests

 

-

 

-

 

-

 

(1,769)

 

-

 

(1,769)

Acquisition of non-controlling interest

 

-

 

-

 

(627)

 

-

 

-

 

(627)

Disposal of non-controlling interest

 

-

 

-

 

320

 

-

 

-

 

320








Balance at 29 January 2011

2,433

11,659

171,916

(1,769)

(149)

184,090








Put options are held by the 49% non-controlling interest in Canterbury of New Zealand Limited and 25% non-controlling interest in Canterbury International (Australia) Pty Limited.

Consolidated Statement of Changes in Equity (continued) 

For the 52 weeks ended 29 January 2011

 


Total Equity Attributable To Equity Holders

 Of The Parent

£000

 

Non-Controlling Interest

£000

 

 

Total

Equity

£000





Balance at 31 January 2009

102,474

1,295

103,769





Profit for the period

42,900

(154)

42,746





Other comprehensive income:




Exchange differences on translation of foreign operations

 

(248)

 

-

 

(248)





Total other comprehensive income

 

(248)

 

-

 

(248)





Total comprehensive income for the period

42,652

(154)

42,498

Dividends to equity holders

(5,937)

-

(5,937)

Acquisition of non-controlling interest

 

-

 

192

 

192





Balance at 30 January 2010

139,189

1,333

140,522





Profit for the period

55,884

(17)

55,867





Other comprehensive income:




Exchange differences on translation of foreign operations

 

95

 

-

 

95





Total other comprehensive income

 

95

 

-

 

95





Total comprehensive income for the period

 

55,979

 

(17)

 

55,962

Dividends to equity holders

(9,002)

-

(9,002)

Put options held by non-controlling interests

 

(1,769)

 

-

 

(1,769)

Acquisition of non-controlling interest

 

(627)

 

(573)

 

(1,200)

Disposal of non-controlling interest

 

320

 

342

 

662





Balance at 29 January 2011

184,090

1,085

185,175

 

                                                                         

 

                                               



 

Consolidated Statement of Cash Flows

For the 52 weeks ended 29 January 2011



52 weeks to 

29 January 2011

£000


52 weeks to 

30 January 2010

£000

Cash flows from operating activities





Profit for the period


55,867


42,746

Share of results of joint venture


(2,823)


473

Income tax expense


22,762


18,647

Financial expenses


455


827

Financial income


(618)


(385)

Depreciation and amortisation of non-current assets


20,375


17,863

Exchange differences on translation


(158)


(49)

Impairment of intangible assets


-


2,617

Impairment of non-current assets


-


408

Impairment of investment property


1,007


-

Profit on disposal of available for sale investments


-


(4,089)

Loss on disposal of non-current assets


1,440


2,148

Increase in inventories


(9,622)


(6,062)

Increase in trade and other receivables


(5,209)


(8,179)

Increase in trade and other payables


14,676


25,326

Interest paid


(455)


(827)

Income taxes paid


(22,002)


(15,848)

Net cash from operating activities


75,695


75,616






Cash flows from investing activities





Interest received


618


385

Proceeds from sale of non-current assets


1,082


532

Disposal costs of non-current assets


(491)


(644)

Acquisition of intangible assets


(9,560)


(6,672)

Acquisition of property, plant and equipment


(30,855)


(21,472)

Acquisition of non-current other assets


(2,114)


(1,429)

Cash consideration of acquisitions


-


(9,100)

Cash acquired with acquisitions


-


2,273

Overdrafts acquired with acquisitions


-


(1,129)

Acquisition of available for sale investment


-


(9,990)

Proceeds from disposal of available for sale investment


-


16,132

Third party loan repayments


-


80

Loan repayments received from joint venture


923


1,750

Net cash used in investing activities


(40,397)


(29,284)






Cash flows from financing activities





Repayment of interest-bearing loans and borrowings


(310)


(1,836)

Acquisition of non-controlling interest


(1,200)


-

Sale of subsidiary shares to non-controlling interest


662


-

Dividends paid


(9,002)


(5,937)

Net cash used in financing activities


(9,850)


(7,773)

 

Net increase in cash and cash equivalents


 

25,448


 

38,559






Cash and cash equivalents at the beginning of the period


62,097


23,538

 

Cash and cash equivalents at the end of the period


 

87,545


 

62,097



 

Analysis of Net Cash

As at 29 January 2011

 



At 30

January

2010

£000


 

 

Cash flow

£000


At 29

 January

2011

£000








Cash at bank and in hand


64,524


25,607


90,131

Overdrafts


(2,427)


(159)


(2,586)







Cash and cash equivalents


62,097


25,448


    87,545








Interest-bearing loans and borrowings:







Bank loans


(885)


310


(575)

Other loans


(747)


(83)


(830)









60,465


25,675


86,140

 



 

1.   Prior period restatement

 

The comparative Group Consolidated Statement of Financial Position as at 30 January 2010 has been restated to reflect the completion in the period to 29 January 2011 of initial accounting in respect of the acquisition of Kooga Rugby Limited made in the period to 30 January 2010.  Adjustments made to the provisional calculation of the fair value of assets and liabilities acquired, as reported at 30 January 2010, in the period to 29 January 2011, resulted in an increase to goodwill of £94,000.  The impact of this adjustment on the net liabilities is shown in note 6.  As the acquisition of Kooga Rugby Limited occurred in the year to 30 January 2010 this adjustment has no impact on the Consolidated Statement of Financial Position as at 31 January 2009 and so it has not been presented. 

 

 

2.   Segmental analysis

 

IFRS 8 'Operating Segments' requires the Group's segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker to allocate resources to the segments and to assess their performance. The Chief Operating Decision Maker is considered to be the Executive Chairman of JD Sports Fashion Plc.

 

Information reported to the Chief Operating Decision Maker is focused on the nature of the businesses within the Group. The Group's reportable segments under IFRS 8 are therefore as follows:

 

·      Sport retail - includes the results of the sport retail trading companies JD Sports Fashion Plc, John David Sports Fashion (Ireland) Limited, Chausport SA and Duffer of St George Limited

·      Fashion retail - includes the results of the fashion retail trading companies Bank Fashion Limited and RD Scott Limited

·      Distribution businesses - includes the results of the distribution companies Topgrade Sportswear Limited, Nicholas Deakins Limited, Canterbury Limited (including global subsidiary companies), Kooga Rugby Limited and Nanny State Limited

 

The Chief Operating Decision Maker receives and reviews segmental operating profit. Certain central administrative costs including Group Directors' salaries are included within the Group's core 'Sport retail' result. This is consistent with the results as reported to the Chief Operating Decision Maker.

 

IFRS 8 requires disclosure of information regarding revenue from major products and customers. The majority of the Group's revenue is derived from the retail of a wide range of apparel, footwear and accessories to the general public. As such, the disclosure of revenues from major products and customers is not appropriate.

 

Intersegment transactions are undertaken in the ordinary course of business on arms length terms.

 

The Board consider that certain items are cross divisional in nature and cannot be allocated between the segments on a meaningful basis. The share of results of joint venture is presented as unallocated in the following tables, as this entity has trading relationships with companies in all of the three segments. An asset of £3,458,000 (2010: £635,000) for the equity accounted investment in joint venture is included within the unallocated segment. Net funding costs and taxation are treated as unallocated reflecting the nature of the Group's syndicated borrowing facilities and its tax group. A deferred tax asset of £125,000 (2010: liability of £748,000) and an income tax liability of £12,370,000 (2010: £10,789,000) are included within the unallocated segment.

  

Each segment is shown net of intercompany transactions and balances within that segment. The eliminations remove intercompany transactions and balances between different segments which primarily relate to the net down of long term loans and short term working capital funding provided by JD Sports Fashion Plc (within Sport retail) to other companies in the Group, and intercompany trading between companies in different segments.

 

Business Segments

 



 

Information regarding the Group's reportable operating segments for the 52 weeks to 29 January 2011 is shown below:

Income statement










Sport

Retail

£000


Fashion

Retail

£000


 

Distribution

£000

 

Total

£000









Gross revenue


667,224


134,110


85,498

886,832

Intersegment revenue


(1,290)


(162)


(1,711)

(3,163)

Revenue


665,934


133,948


83,787

883,669

 

Operating profit before exceptional items


 

73,340


 

6,399


 

188

 

79,927

Exceptional items


(2,687)


(1,573)


(24)

(4,284)









Operating profit


70,653


4,826


164

75,643

Share of results of joint venture







2,823

Financial income







618

Financial expenses







(455)









Profit before tax







78,629

Income tax expense







(22,762)









Profit for the period







55,867

 

Total assets and liabilities

 


Sport

Retail

£000

Fashion

Retail

£000

 

Distribution

£000


 

Unallocated

£000


 

Eliminations

£000


 

Total

£000

 











 

Total assets

310,244

56,182

50,822


3,583


(53,040)


367,791

 

Total liabilities

 

(120,727)

 

(51,546)

 

(51,013)


 

(12,370)


 

53,040


 

(182,616)

 

Other segment information










Sport

Retail

£000


Fashion

Retail

£000


 

Distribution

£000

 

Total

£000

Capital expenditure:








Brand licence purchased


7,500


-


-

7,500

Brand names purchased


1,710


-


350

2,060

Property, plant and equipment


23,553


6,656


646

30,855

Non-current other assets


2,092


22


-

2,114









Depreciation, amortisation and impairments:







Depreciation and amortisation of non-current assets


 

15,679


 

3,454


 

1,242

 

20,375

Impairment of investment property


1,007


-


-

1,007

 



 

The comparative segmental results for the 52 weeks to 30 January 2010 are as follows:

 

Income statement










Sport

Retail

£000


Fashion

Retail

£000


 

Distribution

£000

 

Total

£000









Gross revenue


615,507


114,640


42,551

772,698

Intersegment revenue


(1,225)


(394)


(1,294)

(2,913)

Revenue


614,282


114,246


41,257

769,785









Operating profit/(loss) before  exceptional items


 

64,125


 

3,333


 

(164)

 

67,294

Exceptional items


(642)


(4,355)


11

(4,986)









Operating profit/(loss)


63,483


(1,022)


(153)

62,308

Share of results of joint venture







(473)

Financial income







385

Financial expenses







(827)









Profit before tax







61,393

Income tax expense







(18,647)









Profit for the period







42,746

 

Total assets and liabilities

 


Sport

Retail

£000

Fashion

Retail

£000

 

Distribution

£000


 

Unallocated

£000


 

Eliminations

£000


 

Total

£000

 











 

Total assets

264,394

51,180

40,572


635


(50,556)


306,225

 

Total liabilities

 

(112,618)

 

(51,561)

 

(40,543)


 

(11,537)


 

50,556


 

(165,703)

 

Other segment information








Sport

Retail

£000


Fashion

Retail

£000


 

Distribution

£000

 

Total

£000

 

Capital expenditure:







 

Goodwill on acquisition

(restated - see note 1)

 

-


 

-


 

1,537

 

1,537

 

Brand names on acquisition

2,042


-


453

2,495

 

Brand names purchased

-


-


6,672

6,672

 

Property, plant and equipment

13,517


7,383


572

21,472

 

Non-current other assets

1,424


5


-

1,429

 

Available for sale investment

9,990


-


-

9,990

 








 

Depreciation, amortisation and impairments:







 

Depreciation and amortisation of non-current assets

 

14,067


 

3,279


 

517

 

17,863

 

Impairment of intangible assets

-


2,617


-

2,617

 

Impairment of non-current assets

105


303


-

408

 



Geographical Information

 

The Group's operations are located in the UK, Republic of Ireland, France, Australia, New Zealand, United States of America and Hong Kong.

 

The following table provides analysis of the Group's revenue by geographical market, irrespective of the origin of the goods/services:

 



52 weeks to

29 January 2011

£000


52 weeks to

30 January 2010

£000






UK


801,728


722,221

Europe


55,027


45,094

Rest of world


26,914


2,470








883,669


769,785

 

The revenue from any individual country, with the exception of the UK, is not more than 10% of the Group's total revenue.

 

The following is an analysis of the carrying amount of segmental non-current assets, excluding the investment in joint venture of £3,458,000 (2010: £635,000), deferred tax assets of £125,000 (2010: £nil) and other financial assets of £nil (2010: £922,000), by the geographical area in which the assets are located:

 



2011

£000


2010

(restated -

see note 1)

£000






UK


135,852


120,416

Europe


16,362


13,311

Rest of world


268


285








152,482


134,012



 

3.   Exceptional items

 


 

 

 

52 weeks to

29 January

2011

£000


52 weeks to 

30 January

2010                      £000






Loss on disposal of non-current assets (1)


1,440


2,148

Impairment of non-current assets (2)


-


408

Onerous lease provision (3)


1,837


3,902

Selling and distribution expenses - exceptional


3,277


6,458






Impairment of intangible assets (4)


-


2,617

Impairment of investment property (5)


1,007


-

Profit on disposal of available for sale investments (6)


-


(4,089)

Administrative expenses - exceptional


1,007


(1,472)








4,284


4,986

 

 

(1)  Relates to the excess of net book value of property, plant and equipment and non-current other assets disposed over proceeds received

(2)  Relates to property, plant and equipment and non-current other assets in cash-generating units which are loss making, where it is considered that this position cannot be recovered

(3)  Relates to the net movement in the provision for onerous property leases on trading and non-trading stores

(4)  Relates to the impairment in the period to 30 January 2010 of the residual goodwill on the acquisition of the entire issued share capital of RD Scott Limited

(5)  Relates to the impairment in the period to 29 January 2011 of investment property

(6)  The Group held a non-strategic investment in JJB Sports Plc until 9 December 2009 when it disposed of 65,018,098 ordinary shares for 25p per share, giving a realised loss on disposal of £1,988,000. After recognising an impairment of £6,077,000 in the year ended 31 January 2009 this resulted in an exceptional gain in the period to 30 January 2010 of £4,089,000

 

 

4.   Interest in joint venture

 

The Group's share of the revenue generated by the joint venture in the period was £15,418,000(2010: £11,774,000). The amount included in the Consolidated Income Statement in relation to the joint venture is as follows:

 



Before exceptionals

£000


 

Exceptionals

£000


After

exceptionals

£000








Share of result before tax


2,102


1,549


3,651

Tax


(627)


(201)


(828)

 

Share of result after tax


 

1,475


 

1,348


 

2,823

 

 



 

The comparative amount included in the Consolidated Income Statement for the period ended 30 January 2010 in relation to the joint venture is as follows:

 



Before exceptionals

£000


 

Exceptionals

£000


After

exceptionals

£000








Share of result before tax


740


(1,406)


(666)

Tax


(201)


394


193

 

Share of result after tax


 

539


 

(1,012)


 

(473)

 

 

The exceptional items in the current year relate to unrealised gains on foreign exchange contracts and the reversal of the impairment of the investment held by Focus Brands Limited in Focus Group Holdings Limited, following repayment of original purchase consideration by the vendors of Focus Group Holdings Limited.  The exceptional items in the prior year relate entirely to unrealised losses on foreign exchange contracts.

 

 

5.   Earnings per ordinary share

 

Basic and diluted earnings per ordinary share

 

The calculation of basic and diluted earnings per ordinary share at 29 January 2011 is based on the profit for the period attributable to equity holders of the parent of £55,884,000 (2010: £42,900,000) and a weighted average number of ordinary shares outstanding during the 52 weeks ended 29 January 2011 of 48,661,658 (2010: 48,661,658).

 


52 weeks to

29 January

2011


     52 weeks to 

30 January 2010





Issued ordinary shares at beginning and end of period

48,661,658


48,661,658

 

 

Adjusted basic and diluted earnings per ordinary share

 

Adjusted basic and diluted earnings per ordinary share have been based on the profit for the period attributable to equity holders of the parent for each financial period but excluding the post-tax effect of certain exceptional items. The Directors consider that this gives a more meaningful measure of the underlying performance of the Group.

 



 

 

 

 

 

Note

52 weeks to

29 January

2011

£000


     52 weeks to 

30 January

2010

                 £000






Profit for the period attributable to equity holders

of the parent


 

55,884


 

42,900

Exceptional items excluding loss on disposal of non-current assets

 

3

 

2,844


 

2,838

Tax relating to exceptional items


(514)


(1,184)

Share of exceptional items of joint venture (net of income tax)

4

(1,348)


1,012

Profit for the period attributable to equity holders of the parent excluding exceptional items


 

56,866


 

45,566






Adjusted basic and diluted earnings per ordinary share


            116.86p


93.64p

 

6.   Acquisitions

 

Current period acquisitions

 

Acquisition of non-controlling interest in Topgrade Sportswear Limited

On 21 June 2010, the Group acquired a further 29% of the issued share capital of Hallco 1521 Limited (the intermediate holding company of Topgrade Sportswear Limited) for a cash consideration of £1,200,000. This takes the Group's holding to 80%. The Group's original share of 51% was acquired on 7 November 2007. Topgrade Sportswear Limited is a distributor and multichannel retailer of sports and fashion clothing and footwear. As the Group already had control of Hallco 1521 Limited, the increase in Group ownership has been accounted for as an equity transaction.

 

Nanny State Limited

On 4 August 2010, the Group (via its new subsidiary Nanny State Limited) acquired the global rights to the fashion footwear and apparel brand, 'Nanny State', from D.R.I.P Brands Limited (in administration) and D.R. Shoes Limited (in administration) for a cash consideration of £350,000. Inventory with a value of £141,000 and other debtors with a value of £86,000 were also acquired. The book value of the assets acquired is considered to be the fair value.  

 

Included in the result for the 52 week period to 29 January 2011 is revenue of £771,000 and a loss before tax of £15,000 in respect of Nanny State Limited.

 

 

Prior period acquisitions

 

Acquisition of Kooga Rugby Limited

On 3 July 2009, the Group acquired 100% of the issued share capital of Kooga Rugby Limited for a consideration of £1 together with associated fees of £30,000. Kooga Rugby Limited is involved in the design, sourcing and wholesale of rugby apparel, footwear and accessories and is sole kit supplier to a number of professional rugby union and rugby league clubs.

 

During the 12 month period following acquisition, certain measurement adjustments have been made to the provisional fair values of the net liabilities of Kooga Rugby Limited as at the acquisition date in accordance with IFRS 3 'Business Combinations'. The adjustments from 1 August 2009 to 30 January 2010 are shown in the Annual Report and Accounts 2010. The adjustments from 31 January 2010 to determine the final fair value of liabilities acquired are shown below:



 

 

Provisional fair value at 30 January 2010

£000

 

 

Fair value

adjustments

£000

 

Fair value at 29 January 2011

£000

Acquiree's net liabilities at the acquisition date:




Intangible assets

453

-

453

Property, plant and equipment

102

-

102

Inventories

1,082

(94)

988

Trade and other receivables

1,018

-

1,018

Interest-bearing loans and borrowings

(1,449)

-

(1,449)

Trade and other payables

(2,035)

-

(2,035)

Provisions

(584)

-

(584)





Net identifiable liabilities

(1,413)

(94)

(1,507)





Goodwill on acquisition

1,443

94

1,537





Consideration paid - satisfied in cash

30

-

30

 

 



 

Acquisition of Chausport SA

On 19 May 2009, the Group (via its new subsidiary JD Sports Fashion (France) SAS) acquired 100% of the issued share capital of Chausport SA for a cash consideration of £7,211,000 (€8,000,000) together with associated fees of £696,000. Chausport SA is a French retailer, which at the time of acquisition had 78 stores in premium locations in town centres and shopping centres across France. 

 

During the 12 month period following acquisition, no measurement adjustments were made to the provisional fair values of the net assets of Chausport SA as at the acquisition date.

 


Provisional fair value at 30 January 2010

£000

 

 

Fair value

adjustments

£000

 

Fair value at 29 January 2011

£000

Acquiree's net assets at the acquisition date:




Property, plant and equipment

1,558

-

1,558

Non-current other assets

9,278

-

9,278

Inventories

5,770

-

5,770

Trade and other receivables

1,350

-

1,350

Cash and cash equivalents

639

-

639

Interest-bearing loans and borrowings

(2,318)

-

(2,318)

Trade and other payables

(8,370)

-

(8,370)





Net identifiable assets

7,907

-

7,907





Goodwill on acquisition

-

-

-





Consideration paid - satisfied in cash

7,907

-

7,907

 

 

Canterbury Limited

On 4 August 2009, the Group (via its new subsidiary Canterbury Limited) acquired the global rights to the rugby brands 'Canterbury' and 'Canterbury of New Zealand' from Canterbury Europe Limited (in administration) for a cash consideration of £6,672,000. Inventory with a fair value of £4,289,000 was also acquired. The book value of the assets acquired was considered to be the fair value and no goodwill arose on the acquisition.

 

The final fair value of the net assets acquired was £10,961,000. During the 12 month period following acquisition, no measurement adjustments have been made to the provisional fair values of the net assets of Canterbury Limited as at the acquisition date.

 

Canterbury International (Far East) Limited

On 4 August 2009, Canterbury Limited acquired 100% of the issued share capital of Canterbury International (Far East) Limited for a cash consideration of £1. The provisional fair value of the assets and liabilities acquired was £1. No goodwill arose on this acquisition.

 

The final fair value of the net assets acquired was £1. During the 12 month period following acquisition, no measurement adjustments have been made to the provisional fair values of the net assets of Canterbury International (Far East) Limited as at the acquisition date.

 

Canterbury (North America) LLC

On 24 November 2009, Canterbury Limited (via its new subsidiary Canterbury (North America) LLC) acquired the key trading assets from Sail City Apparel Limited (in liquidation). The total cash consideration paid was £442,000 which included inventory with a value of £392,000 with associated fees of £50,000. The book value of the assets acquired was considered to be the fair value and no goodwill arose on the acquisition.

 

The final fair value of the net assets acquired was £442,000. During the 12 month period following acquisition, no measurement adjustments have been made to the provisional fair values of the net assets of Canterbury (North America) LLC as at the acquisition date.

 



 

Acquisition of Canterbury International (Australia) Pty Limited

On 23 December 2009, Canterbury Limited acquired 100% of the issued share capital of Canterbury International (Australia) Pty Limited for a cash consideration of £2 together with associated fees of £100,000. Canterbury International (Australia) Pty Limited operates the Canterbury brand in Australia.

 

During the 12 month period following acquisition, no measurement adjustments have been made to the provisional fair values of the net assets of Canterbury International (Australia) Pty Limited as at the acquisition date.

 


Provisional fair value at 30 January 2010

£000

 

 

Fair value

adjustments

£000

 

Fair value at 29 January 2011

£000

Acquiree's net assets at the acquisition date:




Property, plant and equipment

144

-

144

Inventories

1,866

-

1,866

Trade and other receivables

1,175

-

1,175

Cash and cash equivalents

918

-

918

Trade and other payables

(3,386)

-

(3,386)

Intercompany loan

(617)

-

(617)





Net identifiable assets

100

-

100





Goodwill on acquisition

-

-

-





Consideration paid - satisfied in cash

100

-

100

 

 

Acquisition of Canterbury of New Zealand Limited

On 23 December 2009, Canterbury Limited acquired 51% of the issued share capital of Canterbury of New Zealand Limited for a cash consideration of £1 together with associated fees of £200,000. Canterbury of New Zealand Limited operates the Canterbury brand in New Zealand.

 

During the 12 month period following acquisition, no measurement adjustments have been made to the provisional fair values of the net assets of Canterbury of New Zealand Limited as at the acquisition date.

 


Provisional fair value at 30 January 2010

£000

 

 

Fair value

adjustments

£000

 

Fair value at 29 January 2011

£000

Acquiree's net assets at the acquisition date:




Property, plant and equipment

123

-

123

Inventories

1,501

-

1,501

Trade and other receivables

1,256

-

1,256

Cash and cash equivalents

504

-

504

Trade and other payables

(1,450)

-

(1,450)

Income tax liabilities

(8)

-

(8)

Intercompany loan

(771)

-

(771)

Shareholder loan

(763)

-

(763)





Net identifiable assets

392

-

392





Non-controlling interest (49%)

(192)

-

(192)

Goodwill on acquisition

-

-

-





Consideration paid - satisfied in cash

200

-

200

 

 

Acquisition of Duffer of St George Limited

On 24 November 2009, the Group acquired 100% of the issued share capital of Duffer of St George Limited for a cash consideration of £863,000. Duffer of St George Limited owns the global rights to the brand name 'The Duffer of St George'.

 

During the 12 month period following acquisition, no measurement adjustments have been made to the provisional fair values of the net assets of Duffer of St George Limited as at the acquisition date.

 


Provisional fair value at 30 January 2010

£000

 

 

Fair value

adjustments

£000

 

Fair value at 29 January 2011

£000

Acquiree's net assets at the acquisition date:




Intangible assets

2,042

-

2,042

Trade and other receivables

220

-

220

Cash and cash equivalents

212

-

212

Interest-bearing loans and borrowings

(1,616)

-

(1,616)

Deferred tax asset

5

-

5





Net identifiable assets

863

-

863





Goodwill on acquisition

-

-

-





Consideration paid - satisfied in cash

863

-

863

 

 

7.   Disposals

 

Disposal of 25% of issued ordinary share capital of Canterbury International (Australia) Pty Limited

On 28 January 2011, Canterbury Limited disposed of 25% of the issued ordinary share capital of Canterbury International (Australia) Pty Limited to the local management team by issuing new shares in exchange for a cash consideration of AUD $1,100,000. This takes the Group's shareholding to 75%. As the Group has maintained control of Canterbury International (Australia) Pty Limited, the decrease in Group ownership has been accounted for as an equity transaction.

 

 

8.   Subsequent events

 

Acquisition of Kukri Sports Limited

On 7 February 2011, the Group acquired 80% of the issued share capital of Kukri Sports Limited for a cash consideration of £1. Kukri Sports Limited has a number of subsidiaries around the world, which source and provide bespoke sports teamwear to schools, universities and sports clubs. In addition, Kukri Sports Limited is sole kit supplier to a number of professional sports teams. For the year ended 30 April 2010, Kukri Sports Limited had a turnover of £12.9 million, an operating loss of £0.3 million, a loss before tax of £0.2 million and gross assets of £2.5 million. The fair value of the assets and liabilities acquired is currently being determined.

 

Acquisition of additional shares in Focus Brands Limited

On 16 February 2011, the Group acquired a further 31% of the issued share capital of Focus Brands Limited for a cash consideration of £1,000,000, with potential further deferred consideration of £250,000 depending on performance. The Group's original share of 49% was acquired on 3 December 2007. Focus Brands Limited was originally incorporated in order to acquire Focus Group Holdings Limited and its subsidiary companies and was an entity jointly controlled by the Group and the former shareholders of Focus Group Holdings Limited. The additional shares purchased since the reporting date take the Group's holding in Focus Brands Limited to 80%, thereby giving the Group control. Focus Brands Limited is now a subsidiary of the Group rather than a jointly-controlled entity. 

 



 

Acquisition of Champion Sports (Holdings)

On 4 April 2011, the Group acquired 100% of the issued share capital of Champion Sports (Holdings) for a cash consideration of €7 and have also advanced €17.1 million to allow it to settle all of its indebtedness save for €2.5 million of leasing finance. Champion was founded in 1992 and is one of the leading retailers of sports apparel and footwear in the Republic of Ireland with 22 stores in premium locations in town centres and shopping centres. In addition, Champion has one store in Northern Ireland. For the year ended 31 December 2009, Champion had a turnover of €54.0 million, an operating loss of €1.8 million, a loss before tax of €4.9 million and gross assets of €36.2 million. The fair value of the assets and liabilities acquired is currently being determined.

 

New committed bank facility

On 12 April 2011, the Group agreed a new syndicated committed £75,000,000 bank facility for 54 months to 11 October 2015. The principal terms of this facility are:

 

·              Current margin 1.25%

·              Arrangement fee 0.60%

·              Commitment fee 45% of applicable margin

           

The new facility encompasses cross guarantees between the Company, Bank Fashion Limited, RD Scott Limited, Topgrade Sportswear Limited, Nicholas Deakins Limited, Canterbury Limited, Canterbury of New Zealand Limited and Focus International Limited.

 

 

9.   Accounts

The financial information set out above does not constitute the Group's statutory accounts for the 52 weeks ended 29 January 2011 or 30 January 2010 but is derived from those accounts. Statutory accounts for the 52 weeks ended 30 January 2010 have been delivered to the Registrar of Companies, and those for the 52 weeks to 29 January 2011 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Copies of full accounts will be sent to shareholders in due course. Additional copies will be available from JD Sports Fashion Plc, Hollinsbrook Way, Pilsworth, Bury, Lancashire, BL9 8RR or online at www.jdplc.com.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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