RNS No 5195c
JOHN DAVID SPORTS PLC
9 June 1999
JOHN DAVID SPORTS PLC
PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 1999
John David Sports Plc, a leading specialist retailer of fashionable branded
sports and leisure wear, today announces its 1999 Preliminary Results.
Highlights:-
* Turnover increased by 33.4% to #142.61 million (1998: #106.88 million).
* Operating profit increased by 10.9% to #10.67 million (1998: #9.62
million).
* Pre tax profit increased by 5.8% to #9.85 million (1998: 9.31 million).
* Earnings per ordinary share increased by 3.2% to 14.20p (1998: 13.76p).
* Maintained final dividend (3.6p) 5.6p in total.
* 28 stores opened including 10 edge/out of town formats.
* Focused marketing campaigns including successful launch of the JD Gold
Card loyalty scheme.
* Continued like for like sales growth.
John Wardle, Chairman said: "We are now achieving a more positive
differentiation in the market and this is leading to a stronger trading
performance. Management are confident that the JD brand is firmly established
and recognised as the UK's leading specialist retailer of fashionable branded
sports and leisurewear."
Enquiries:
John Wardle, Chairman/Peter Cowgill, Finance Director
John David Sports Plc
Tel:0171 796 4133 (Hudson Sandler) on 9 June 1999,
01706 628000 (thereafter)
James Cracknell
Hudson Sandler
Tel: 0171 796 4133
CHAIRMAN'S STATEMENT
I am pleased to report that the company increased its pre-tax profit from
#9.31m to #9.85m for the year ended 31 March 1999, despite the difficult
retail conditions generally.
In particular, the trading performance from mid December onwards has been most
encouraging which supports my comments in the Interim Statement that the
company has successfully refined its merchandising and retail strategy.
The action that the management team has taken over the past 18 months to
achieve a consistent and strong offer better aligned to our distinct market
position is now yielding the benefits I anticipated. In particular we are now
achieving a stronger differentiation in the market through our innovative
partnership with leading brands.
RESULTS
Following a strong Christmas trading performance which resulted in a like for
like increase of 6.5% for the 5 week period ended 2 January 1999, positive
like for like sales continued up to 31 March 1999. As a consequence the
declines encountered pre December were recovered to the extent that a flat
like for like performance was achieved for the year in total. After adjusting
for the timing of Easter, like for like sales growth in the 3 months ended 31
March 1999 was in excess of 7%.
Gross profit margins for the year have increased from 45.2% to 45.5% despite
the influence of competitive pressures and the general background of high
street discounting.
Operating costs increased, mainly as a result of the additional store units in
operation. Inflationary increases in rent and rates were also encountered and
a further charge was incurred as a result of our decision to accelerate
depreciation on certain stores which had been designated for premature
closure.
Operating profits for the year increased by 10.9% from #9.62 million to #10.67
million and profit before taxation increased from #9.31 million to #9.85
million. Following an increase in the effective tax rate from 31.26% to 32.96%
(arising largely from accelerated depreciation), earnings per share has
increased by 3.2% from 13.76p to 14.20p.
DIVIDEND
The Board is recommending a maintained final dividend of 3.6p per ordinary
share subject to the approval of shareholders at the Annual General Meeting.
This combines with the Interim dividend of 2.0p (1998: 2.0p) per share to
provide a total dividend of 5.6p. This will be paid on 4 October 1999 to
shareholders on the register at close of business on 27 August 1999.
OPERATING REVIEW
During the year the company achieved its object of re-establishing several
major points of product and format differentiation. This emphasis had
featured most strongly during the development years of the company in
establishing the distinctive "JD" brand. It was felt that the rapid expansion
and market entry of other sportswear retailers had eroded certain areas of
difference. We are confident that the identity and image of JD Sports has
been restored as a result of appealing product, improved store display and
imaginative marketing initiatives. A consistent message of in-store formats
and marketing support is now evident. The product offering has been expanded
to include the JD Casual, JD Junior and JD Woman ranges, which have proved
successful.
Marketing developments include the JD Gold Card which was launched in November
1998 and has achieved an extremely encouraging response rate. This has
created a substantial customer database which will be used for future
merchandising and marketing initiatives.
We have established strategic partnerships with major brands and have
consequently enhanced our "JD Exclusives" range of footwear and apparel. We
have also stimulated the growth of certain desirable leisurewear brands.
These factors were the main reasons for the improvement in our trading
performance in the last four months.
During the year 28 new stores were opened and 5 stores were closed. Of the 5
store closures 2 represented relocations and a further 2 were stores which had
remained open in towns where 2 JD stores were operating. The increase of 23
stores represented additional retail space of 121,000 sq ft resulting in a
total of 386,000 sq ft. Included therein are 17 edge/out of town stores
occupying 113,000 sq ft.
BALANCE SHEET AND FINANCIAL RESOURCES
Shareholders' funds at the balance sheet date have increased from #26.85
million to #30.85 million, as a result of the retained profit of #4.00
million. Total expenditure on fixed assets in the year amounted to #10.45
million, of which #9.05 million related to stores. Net borrowings at 31
March 1999 were #9.62 million (1998: #5.19m). Gearing amounted to 31.2%
(1998: 19.3%).
CURRENT TRADING
For the 10 week period since the year end total sales have increased by 25%
ahead of the similar period in the previous year and this includes an
underlying increase in like for like sales of 2%. This growth is against a
comparative background of good weather and World Cup influences which
prevailed during the same period last year.
A flagship store was opened in the Bluewater Park development on 16 March 1999
and this represented a significant investment by the company. We are pleased
to report that trading from this store has been most successful. No further
stores have been opened since the year end.
PROSPECTS
We have seen encouraging evidence that our refined merchandising and retail
strategy has successfully differentiated JD Sports from its competitors in
what remains a competitive market place.
As previously announced, store openings during the current year will be
significantly lower than in recent years and critical selection criteria will
continue to apply. Focus will be placed on enhancing the consistent in store
format of King of Trainers, JD Woman, JD Junior, JD Casuals and JD Exclusives
which will continue to be exploited as specific offers of distinction. Brand
partnerships will be further developed with progressive emphasis on the
exclusive ranges. Initial customer reaction has been extremely positive and
all offerings will be supported by strong, consistent and targeted marketing
campaigns. The market knowledge available from the JD Gold Card scheme will be
relevant and exploited via the quarterly JD Catalogue.
We are now achieving a more positive differentiation in the market which is
strengthening the JD brand and leading to an improved trading performance.
The Directors are confident that JD is now firmly established and recognised
as the UK's leading specialist retailer of fashionable branded sports and
leisurewear.
John Wardle
Chairman
9 June 1999
Profit and loss account
for the year ended 31 March 1999
1999 1998
#000 #000
-----------------------------------------------------------------
Turnover 142,607 106,878
Cost of sales (77,674) (58,544)
-----------------------------------------------------------------
Gross profit 64,933 48,334
Distribution costs (48,846) (34,224)
Administrative expenses (5,440) (4,521)
Other operating income 23 27
-----------------------------------------------------------------
Operating profit 10,670 9,616
Loss on sale of tangible fixed assets (212) (165)
-----------------------------------------------------------------
Profit on ordinary activities before
interest 10,458 9,451
Interest receivable 164 417
Interest payable and similar charges (771) (555)
-----------------------------------------------------------------
Profit on ordinary activities before
taxation 9,851 9,313
Tax on profit on ordinary activities (3,247) (2,912)
-----------------------------------------------------------------
Profit for the financial year 6,604 6,401
Dividends paid and proposed (2,605) (1,591)
-----------------------------------------------------------------
Retained profit for the financial year 3,999 4,810
-----------------------------------------------------------------
Earnings per ordinary share 14.20p 13.76p
Diluted earnings per ordinary share 14.20p 13.76p
-----------------------------------------------------------------
All amounts shown for both years relate to continuing operations.
The company has no recognised gains or losses during the current and previous
years other than the results reported above. The results above also represent
the historical cost profit.
Balance sheet
as at 31 March 1999
1999 1998
#000 #000 #000 #000
---------------------------------------------------------
Fixed assets
Tangible assets 28,796 23,734
---------------------------------------------------------
Current assets
Stocks 26,312 21,555
Debtors 4,609 4,407
Cash at bank and in hand 337 2,882
---------------------------------------------------------
31,258 28,844
Creditors: amounts falling
due within one year (21,668) (19,458)
---------------------------------------------------------
Net current assets 9,590 9,386
---------------------------------------------------------
Total assets less current
liabilities 38,386 33,120
Creditors: amounts falling
due after more than one year (5,712) (4,844)
Provisions for liabilities
and charges (1,824) (1,425)
---------------------------------------------------------
Net assets 30,850 26,851
---------------------------------------------------------
Capital and reserves
Called up share capital 2,325 2,325
Share premium account 8,634 8,634
Profit and loss account 19,891 15,892
---------------------------------------------------------
Equity shareholders' funds 30,850 26,851
---------------------------------------------------------
Cash flow statement
for the year ended 31 March 1999
1999 1998
#000 #000
----------------------------------------------------------------------
Net cash inflow from operating activities 9,652 10,211
Returns on investments and servicing
of finance (607) (138)
Taxation (2,088) (3,051)
Capital expenditure (9,799) (10,735)
Equity dividends paid (1,592) (2,605)
----------------------------------------------------------------------
Net cash outflow before financing (4,434) (6,318)
----------------------------------------------------------------------
Financing 1,889 1,557
----------------------------------------------------------------------
Decrease in cash in the year ( 2,545) (4,761)
----------------------------------------------------------------------
Reconciliation of net cash flow to movement in net debt
for the year ended 31 March 1999
1999 1998
#000 #000
----------------------------------------------------------------------
Decrease in cash in the year (2,545) (4,761)
Cash inflow from movement in debt and
lease financing (1,889) (1,557)
New finance leases and similar hire
purchase contracts - (127)
----------------------------------------------------------------------
Movement in net debt in the year (4,434) (6,445)
Net (debt)/funds at start of year (5,186) 1,259
----------------------------------------------------------------------
Net debt at end of year (9,620) (5,186)
----------------------------------------------------------------------
Earnings per ordinary share
Earnings per ordinary share represents the post-tax profit for the financial
year #6,604,000 (1998: #6,401,000) divided by the weighted average number of
ordinary shares in issue of 46,508,772 (1998: 46,508,772).
There is no difference between the basic earnings per ordinary share and the
diluted earnings per ordinary share for either year.
Reconciliation of movements in shareholders' funds
1999 1998
#000 #000
---------------------------------------------------------------------
Profit for the financial year 6,604 6,401
Dividends (2,605) (1,591)
---------------------------------------------------------------------
Net movement in shareholders' funds 3,999 4,810
Shareholders' funds at beginning of year 26,851 22,041
---------------------------------------------------------------------
Shareholders' funds at end of year 30,850 26,851
Reconciliation of operating profit to net cash inflow from operating
activities
1999 1998
#000 #000
---------------------------------------------------------------------
Operating profit 10,670 9,616
Depreciation charge 4,525 2,612
Increase in stocks (4,757) (5,025)
Increase in debtors (366) (1,453)
(Decrease)/increase in creditors (420) 4,461
---------------------------------------------------------------------
Net cash inflow from operating activities 9,652 10,211
---------------------------------------------------------------------
Notes
1.These figures are abridged versions of JD's full accounts for the years
ended 31 March 1998 and 1999 and do not constitute the Company's statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
Company's auditors have audited the statutory accounts for the Company and
have issued an unqualified audit report thereon within the meaning of
Section 235 of the Companies Act 1985 and have not made any statement under
Section 237 (2) or (3) of the Companies Act 1985 for the year concerned.
Statutory accounts for the year ended 31 March 1998 have been delivered to
the Registrar of Companies. Statutory accounts for the year ended 31 March
1999 will be delivered to the Registrar of Companies following the Annual
General Meeting.
2.Final dividends for the year ended 31 March 1998 were waived in respect of
28,152,980 ordinary shares (amounting to #1,015,000).
3.Included within profit on ordinary activities before taxation is income of
#762,000 gained from the disposal of a lease which has offset an accelerated
depreciation of #735,000 following the revision of the useful economic lives
of certain stores.
4.Copies of the full accounts will be sent to shareholders in due course.
Additional copies will be available from John David Sports Plc, Unit P14
Parklands, Heywood Distribution Park, Pilsworth Road, Heywood, Lancs, OL10
2TT.
END
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