RNS Number:0484C
John David Sports PLC
7 December 1999
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 1999
John David Sports Plc, a leading specialist retailer of fashionable branded
sports and leisure wear, today announces its 1999 Interim Results.
Highlights:-
* Turnover increased by 20.8% to #83.27 million (1998: #68.94 million)
* Like for like sales growth of 5.2% since 30 September 1999
* 3 stores opened during the period with one closure
* Continued focus on store format and product differentiation
* Gross profit margin improved from 45.5% to 46.0%
* Operating profit increased by 18.8% to #7.26 million (1998: #6.11
million)
* Profit before tax up by 13.2% to #6.66 million (1998: #5.88 million)
* Earnings per ordinary share up 13.5% to 9.76p (1998: 8.60p)
* Dividend maintained at 2p
John Wardle, Chairman, said: "Against a difficult retail trading background
I am pleased with the positive progress which the company has made. The
financial results to date fully support the merchandising and retail
strategies which have been successfully implemented and which we are
continuing to develop."
Enquiries: John Wardle (Chairman)/ Peter Cowgill (Finance Director)
John David Sports Plc
Telephone: 0171 796 4133 (Hudson Sandler) on 7 December 1999
Andrew Hayes/James Cracknell
Hudson Sandler Limited
01706 628000 (thereafter)
CHAIRMAN'S STATEMENT
Introduction
In light of the well reported difficult market conditions in clothing
retailing, I am pleased to report that the company has continued its sales
and profit growth. For the six month period ended 30 September 1999 the
company has increased its sales by 20.8% from #68.94m to #83.27m and its pre
tax profit by 13.2% from #5.88m to #6.66m.
The results support my comments in recent announcements that the company has
successfully refined its merchandising and retail strategy and developed its
market position as a brand leader in sports and leisurewear retailing.
Results
Operating profit for the six month period ended 30 September 1999 increased by
18.8% from #6.11m to #7.26m and profit before taxation increased by 13.2% from
#5.88m to #6.66m. Earnings per ordinary share have increased by 13.5% from
8.60p to 9.76p.
The improved net profit has been generated by an increase in turnover of 20.8%
from #68.94m to #83.27m, combined with improved gross profit margin from 45.5%
to 46.0%.
Dividend
The Board proposes to pay an interim dividend of 2p per ordinary share (1998:
2p) which will be paid on 3 March 2000 to shareholders on the register at the
close of business on 14 January 2000.
Trading Review
The six month period under review was one of continued consolidation in the
sportswear retail market. Certain weaker competitors have either been
absorbed or diminished their representation on the high street but market
conditions have remained competitive. In comparative terms the timing of
Easter and the absence of the World Cup or a similar major sporting event
created demanding comparatives and, therefore, the improvement in like for
like sales during the period of 3.4% was encouraging.
The ongoing emphasis upon differentiation in product offerings has benefited
the sales performance of the company. This, together with improved
merchandising controls, has increased the gross profit margin.
As previously announced, the store opening programme has been highly selective
during the current financial year. Three stores were opened during the period
and, following the closure of one clearance outlet, the total number of stores
in operation at the period end was 128 occupying a total of 393,000 retail sq
ft. This total includes 17 out of town/edge of town stores which occupy
113,000 retail sq ft.
Since 30 September 1999 four additional stores have been opened and one
closed, increasing the retail square footage to 404,000 sq ft.
Balance sheet and financial resources
As previously referred, capital expenditure was curtailed during the period to
#2.54m.
Stock levels at 30 September 1999 increased by 1% from #27.44m to #27.73m.
Whilst comparatives have been favoured by the timing of certain deliveries,
the modest uplift in stock compared to the increased levels of turnover is a
consequence of the improved stock and merchandising controls which have been
implemented. The result has been to benefit cash resources and consequently
the period end gearing position.
Net borrowings at the period end amounted to #6.13m (1998: #8.04m) giving
gearing of 18% (1998: 27%). Shareholders' funds as at 30 September 1999
increased to #34.46m.
Year 2000
The majority of systems currently operated by the company have been developed
and reviewed by an external software house who have confirmed that they are
millennium compliant. A steering committee has reviewed all other systems and
hardware operated by the company to ensure millennium compliance will be fully
met. Any costs associated with the exercise are charged to the profit and
loss account as incurred, and are not significant.
Current trading and outlook
Recent announcements by retail clothing companies and continued evidence of
high street discounting confirm that difficult market conditions prevail. We
are therefore encouraged by the continued achievement of positive like for
like sales growth. The cumulative increase in like for like sales for the
financial year to date is 3.8%.
Since 30 September 1999 the growth in like for like sales is 5.2%. We have,
however, achieved this growth partially through higher levels of promotional
expenditure which will continue throughout the second half of the year. The
results for the financial year will also, as ever, be heavily influenced by
sales performance during the Christmas period and in the early months of the
New Year. Sales comparatives are stronger from mid December onwards.
Against a difficult retail trading background I am pleased with the positive
progress which the company has made. The financial results to date fully
support the merchandising and retail strategies which have been successfully
implemented and which we are continuing to develop.
John Wardle
Chairman
7 December 1999
PROFIT AND LOSS ACCOUNT
for the half year ended 30 September 1999
Unaudited Unaudited Audited
first half first half year ended
1999 1998 31 March 1999
Note #'000 #'000 #'000
-----------------------------------------------------------------------------
Turnover 83,271 68,939 142,607
Cost of sales (44,957) (37,538) (77,674)
-----------------------------------------------------------------------------
Gross profit 38,314 31,401 64,933
Operating expenses (net) (31,052) (25,290) (54,263)
-----------------------------------------------------------------------------
Operating profit 7,262 6,111 10,670
Loss on sale of tangible
fixed assets (236) - (212)
-----------------------------------------------------------------------------
Profit on ordinary activities
before interest 7,026 6,111 10,458
Interest receivable and
similar income 22 115 164
Interest payable and similar
charges (389) (345) (771)
-----------------------------------------------------------------------------
Profit on ordinary activities
before taxation 6,659 5,881 9,851
Taxation on profit on ordinary
activities 2 (2,120) (1,880) (3,247)
-----------------------------------------------------------------------------
Profit on ordinary activities
after taxation 4,539 4,001 6,604
Dividends paid and proposed 3 (930) (930) (2,605)
-----------------------------------------------------------------------------
Retained profit 3,609 3,071 3,999
-----------------------------------------------------------------------------
Earnings per ordinary share 4 9.76p 8.60p 14.20p
Diluted earnings per ordinary
share 9.76p 8.60p 14.20p
-----------------------------------------------------------------------------
All amounts shown relate to continuing operations
BALANCE SHEET
as at 30 September 1999
Unaudited Unaudited Audited
as at as at as at
30 September 30 September 31 March
1999 1998 1999
#'000 #'000 #'000
-----------------------------------------------------------------------------
Fixed assets
Tangible assets 29,160 26,858 28,796
-----------------------------------------------------------------------------
Current assets
Stocks 27,727 27,439 26,312
Debtors and prepayments 5,042 4,649 4,609
Cash at bank and in hand 2,081 1,556 337
-----------------------------------------------------------------------------
34,850 33,644 31,258
Creditors: amounts falling due
within one year (23,470) (21,548) (21,668)
-----------------------------------------------------------------------------
Net current assets 11,380 12,096 9,590
-----------------------------------------------------------------------------
Total assets less current
liabilities 40,540 38,954 38,386
Creditors:amounts falling due
after more than one year (4,164) (7,574) (5,712)
Provisions for liabilities and
charges (1,917) (1,458) (1,824)
-----------------------------------------------------------------------------
Net assets 34,459 29,922 30,850
-----------------------------------------------------------------------------
Capital and reserves
Called up share capital 2,325 2,325 2,325
Share premium account 8,634 8,634 8,634
Profit and loss account 23,500 18,963 19,891
-----------------------------------------------------------------------------
Equity shareholders' funds 34,459 29,922 30,850
-----------------------------------------------------------------------------
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
as at 30 September 1999
Unaudited Unaudited Audited
as at as at as at
30 September 30 September 31 March
1999 1998 1999
#'000 #'000 #'000
-----------------------------------------------------------------------------
Retained profit 3,609 3,071 3,999
Opening equity shareholders'
funds 30,850 26,851 26,851
-----------------------------------------------------------------------------
Closing equity shareholders'
funds 34,459 29,922 30,850
-----------------------------------------------------------------------------
CASH FLOW STATEMENT
for the half year ended 30 September 1999
Unaudited Unaudited Audited
first half first half year ended
1999 1998 31 March 1999
#'000 #'000 #'000
-----------------------------------------------------------------------------
Net cash inflow from operating
activities 6,628 3,087 9,652
Returns on investments and
servicing of finance (367) (230) (607)
Taxation paid (233) (231) (2,088)
Capital expenditure (2,538) (5,476) (9,799)
Equity dividends paid - - (1,592)
-----------------------------------------------------------------------------
Net cash inflow/(outflow) before
financing 3,490 (2,850) (4,434)
Financing (1,746) 1,524 1,889
-----------------------------------------------------------------------------
Increase/(decrease) in cash 1,744 (1,326) (2,545)
-----------------------------------------------------------------------------
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. The unaudited results have been prepared using the same accounting
policies as those used for the financial statements for the year ended 31
March 1999.
2. Taxation has been estimated at the rate expected to be incurred in the
full year.
3. The directors have declared an interim dividend of 2.0p per ordinary
share of 5p, to be paid on 3 March 2000 to shareholders registered on 14
January 2000.
4. Earnings per ordinary share represents the profit for the period of
#4,539,000 (1998: #4,001,000) divided by the weighted average number of
ordinary shares in issue of 46,508,772 (1998: 46,508,772).
5. The financial information set out above does not constitute full
statutory accounts within the meaning of Section 240 of the Companies Act
1985. The amounts shown in respect of the year ended 31 March 1999 have
been extracted from the full statutory accounts, on which the auditors
have made an unqualified report. The statutory accounts have been filed
with the Registrar of Companies.
6. Copies of the interim financial statements will be posted to shareholders
and are available to members of the general public from the company's
registered office: P14 Parklands, Heywood Distribution Park, Pilsworth
Road, Heywood, Lancashire, OL10 2TT.
END
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