- Part 2: For the preceding part double click ID:nRSN1377Va
the ordinary course of business on
arm's length terms.
The Board consider that certain items are cross divisional in nature and
cannot be allocated between the segments on a meaningful basis. Net funding
costs and taxation are treated as unallocated reflecting the nature of the
Group's syndicated borrowing facilities and its tax group. Drawdowns from the
Group's syndicated borrowing facility of £nil (2015: £31,000,000), a deferred
tax asset of £482,000 (2015: liability of £1,804,000) and an income tax
liability of £15,757,000 (2015: £12,931,000) 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 Sports Fashion) 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 30 January 2016 is shown below:
Income statement
Sports Fashion£000 Outdoor£000 Continuing Operations£000
Gross revenue 1,666,477 155,313 1,821,790
Intersegment revenue (138) - (138)
Revenue 1,666,339 155,313 1,821,652
Operating profit / (loss) before exceptional items 162,864 (3,962) 158,902
Exceptional items (21,634) (3,862) (25,496)
Operating profit / (loss) 141,230 (7,824) 133,406
Financial income 388
Financial expenses (2,163)
Profit / (loss) before tax 131,631
Income tax (expense) / credit (31,001)
Profit / (loss) for the period 100,630
Total assets and liabilities
Sports Fashion£000 Outdoor£000 Unallocated£000 Eliminations£000 Total£000
Total assets 792,411 82,016 482 (83,613) 791,296
Total liabilities (336,736) (121,591) (15,757) 83,613 (390,471)
Total segment net assets / (liabilities) 455,675 (39,575) (15,275) - 400,825
Other segment information
Sports Fashion£000 Outdoor£000 Total£000
Capital expenditure:
Software development 4,401 - 4,401
Property, plant and equipment 69,025 3,740 72,765
Non-current other assets 6,343 - 6,343
Depreciation, amortisation and impairments:
Depreciation and amortisation of non-current assets 45,326 3,452 48,778
Impairment of intangible assets 6,739 3,861 10,600
Termination of IT project 14,896 - 14,896
Impairment of non-current assets 843 584 1,427
The comparative segmental results (re-presented) for the 52 weeks to 31
January 2015 are as follows:
Income statement (re-presented)
Sports Fashion£000 Outdoor£000 Continuing Operations£000 Discontinued Operations£000 Total£000
Gross revenue 1,382,408 139,924 1,522,332 83,441 1,605,773
Intersegment revenue (79) - (79) - (79)
Revenue 1,382,329 139,924 1,522,253 83,441 1,605,694
Operating profit / (loss) before exceptional items 109,315 (7,142) 102,173 (7,832) 94,341
Exceptional items (4,876) (4,651) (9,527) (8,088) (17,615)
Operating profit / (loss) 104,439 (11,793) 92,646 (15,920) 76,726
Financial income 657 - 657
Financial expenses (2,807) (74) (2,881)
Profit / (loss) before tax 90,496 (15,994) 74,502
Income tax (expense) / credit (20,741) 210 (20,531)
Profit / (loss) for the period 69,755 (15,784) 53,971
Total assets and liabilities (re-presented)
Sports Fashion£000 Outdoor£000 Unallocated£000 Eliminations£000 Total£000
Total assets 670,491 94,873 - (83,694) 681,670
Total liabilities (274,031) (135,607) (45,735) 83,694 (371,679)
Total segment net assets / (liabilities) 396,460 (40,734) (45,735) - 309,991
Other segment information (re-presented)
Sports Fashion£000 Outdoor£000 Total£000
Capital expenditure:
Software development 7,123 - 7,123
Other intangible assets 29 - 29
Property, plant and equipment 49,770 3,154 52,924
Non-current other assets 10,124 - 10,124
Depreciation, amortisation and impairments:
Depreciation and amortisation of non-current assets 42,047 3,194 45,241
Impairment of intangible assets 2,560 2,500 5,060
Impairment of non-current assets 233 750 983
Geographical Information
The Group's operations are located in the UK, Republic of Ireland, France,
Spain, Germany, the Netherlands, Italy, Sweden, Denmark, Belgium, Malaysia,
Australia, New Zealand, Canada, Dubai, Singapore 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 30 January 2016 52 weeks to 31 January 2015
Continuing Discontinued Total Continuing Discontinued Total
£000 £000 £000 £000 £000 £000
UK 1,407,866 - 1,407,866 1,184,966 82,940 1,267,906
Europe 391,954 - 391,954 317,472 189 317,661
Rest of world 21,832 - 21,832 19,815 312 20,127
1,821,652 - 1,821,652 1,522,253 83,441 1,605,694
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 by the geographical area in which the assets are located:
2016 £000 2015 £000
UK 183,623 206,692
Europe 96,437 74,523
Rest of world 541 196
280,601 281,411
2. Exceptional items
52 weeks to 30 January2016£000 52 weeks to 31 January2015 £000
Property related exceptional costs - 4,467
Selling and distribution expenses - exceptional - 4,467
Impairment of goodwill, brand names and fascia names (1) 10,600 5,060
Termination of project to replace core IT systems (2) 14,896 -
Administrative expenses - exceptional 25,496 5,060
Exceptionals - continuing operations 25,496 9,527
Exceptionals - discontinued operations (see note 6) - 8,088
25,496 17,615
1. Relates to the impairment in the period to 30 January 2016 of the
goodwill arising in prior years on the acquisition of ActivInstinct Limited, a
partial impairment of the Blacks fascia name and the impairment of several
other goodwill and fascia name balances which were not significant. The charge
in the prior period related to the goodwill arising in prior years on the
acquisition of Blacks Outdoor Retail Limited, the goodwill arising in prior
years on the acquisition of Kukri Sports Limited, the Kukri brand name and the
Ark fascia name.
2. One off exceptional charge writing off costs to date including certain
other related costs
These selling and distribution expenses and administrative expenses are
exceptional items as they are,
individually, and in aggregate, material in size and/or unusual or infrequent
in nature.
3. Earnings per ordinary share
Basic and diluted earnings per ordinary share
The calculation of basic and diluted earnings per ordinary share at 30 January
2016 is based on the profit from continuing operations for the period
attributable to equity holders of the parent of £97,634,000 (2015:
£68,461,000) and a weighted average number of ordinary shares outstanding
during the 52 week period ended 30 January 2016 of 194,646,632 (2015:
194,646,632).
An Ordinary Resolution was passed at the Annual General Meeting, effective 30
June 2014, resulting in a share split whereby four Ordinary shares were issued
for each Ordinary share. In accordance with IAS 33, the number of shares
outstanding before the event has been adjusted for the proportionate change as
if the event had occurred at the beginning of the earliest period presented.
52 weeks to 30 January2016 52 weeks to 31 January 2015
Issued ordinary shares at beginning and end of period 194,646,632 194,646,632
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 from continuing operations 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 to30 January2016£000 52 weeks to 31 January2015 £000
Profit for the period from continuing operations attributable to equity holders of the parent 97,634 68,461
Exceptional items excluding loss on disposal of non-current assets 2 25,496 8,541
Tax relating to exceptional items (3,737) (1,309)
Profit for the period from continuing operations attributable to equity holders of the parent excluding exceptional items 119,393 75,693
Adjusted basic and diluted earnings per ordinary share from continuing operations 61.34p 38.89p
4. Acquisitions
Current period acquisitions
During the period, the Group has increased its shareholding in three
non-wholly owned subsidiaries. These transactions were not material.
Prior period acquisitions
Mainline Menswear Limited
On 21 March 2014, the Group acquired 80% of the issued share capital of
Mainline Menswear Holdings Limited for cash consideration of £10,924,000 with
additional consideration of up to £500,000 payable after 30 November 2014 if
certain performance criteria were achieved. At acquisition, management
believed that Mainline Menswear was on course to meet the performance criteria
for the maximum contingent consideration to be payable and therefore the fair
value of this contingent consideration at this time was £500,000. The deferred
consideration was subsequently paid in full in February 2015. Mainline
Menswear is primarily an online niche retailer of premium branded Men's
apparel and footwear.
The measurement period concluded in the 52 week period ended 30 January 2016,
with no measurement adjustments being made to the fair values in the period.
The final goodwill calculation is summarised below: Book value£000 Measurementadjustments£000 Fair value at 30 January 2016£000
Acquiree's net assets at acquisition date:
Intangible assets - 843 843
Property, plant & equipment 52 - 52
Inventories 1,519 - 1,519
Cash 3,535 - 3,535
Trade and other receivables 60 - 60
Trade and other payables (692) - (692)
Income tax liabilities (62) - (62)
Deferred tax liabilities (10) (169) (179)
Net identifiable assets 4,402 674 5,076
Non-controlling interest (20%) (880) (135) (1,015)
Goodwill on acquisition 7,363
Consideration paid - satisfied in cash 11,424
The intangible asset acquired represents the fair value of the 'Mainline'
fascia name. The Board believes that the excess of consideration paid over the
fair value of the net identifiable assets of £7,363,000 is best considered as
goodwill on acquisition representing employee expertise and anticipated future
operating synergies.
Ultimate Outdoors
On 3 February 2014, the Group acquired, via its 100% owned subsidiary Blacks
Outdoor Retail Limited, 100% of the entire issued share capital of Ultimate
Outdoors Limited for cash consideration of £835,000 which was equal to the
fair value of the net identifiable assets acquired.
The measurement period concluded in the 52 week period ended 30 January 2016,
with no measurement adjustments being made to the fair values in this period.
Oswald Bailey
On 28 March 2014, the Group acquired, via its 100% owned subsidiary Blacks
Outdoor Retail Limited, the trade and assets of 14 stores (and 2 websites)
trading as Oswald Bailey for cash consideration of £851,000 which was equal to
the fair value of the net identifiable assets acquired. Oswald Bailey is a
retailer of outdoor footwear, apparel and equipment.
The measurement period concluded in the 52 week period ended 30 January 2016,
with no measurement adjustments being made to the fair values in this period.
5. Disposals
Prior period disposal
Disposal of 100% of the Issued Ordinary Share Capital of Bank Fashion Limited
On 25 November 2014, the Group disposed of its 100% shareholding in Bank
Fashion Limited to Huk 57 Limited (a subsidiary of Hilco Capital Limited) for
a total consideration of £18.15m. The total cash payment comprised £1 for the
entire share capital of Bank Fashion Limited and £18.15m which repaid a
substantial part of the intercompany receivable balance of £28.25m. JD Sports
Fashion Plc has recorded a provision of £10.1m against the remaining balance.
The assets and liabilities related to Bank Fashion Limited form a disposal
group. Bank Fashion Limited has been treated as a discontinued operation as at
31 January 2015 as its fashionwear business offering represented a significant
line of business (see note 6).
Financial information related to the disposal is set out below:
£000
Consideration received 18,150
Less: carrying value of net assets disposed of (20,506)
Less: fascia name disposed of (5,481)
Plus: deferred tax on fascia name 1,519
Loss on disposal (6,318)
Net cashflow on disposal:
Consideration received 18,150
Less: cash and cash equivalents disposed of -
Net cash inflow from disposal 18,150
6. Discontinued operation
Results of Discontinued Operation
52 weeks to 30 January2016£000 52 weeks to 31 January 2015£000
Revenue - 83,441
Expenses - normal - (91,273)
Expenses - exceptional - (1,770)
Net interest expense - (74)
Results from operating activities - (9,676)
Income tax - 210
Results from operating activities, net of tax - (9,466)
Loss on sale of discontinued operation - exceptional - (6,318)
Loss for the period - (15,784)
Basic loss per ordinary share - (8.11)p
Diluted loss per ordinary share - (8.11)p
Effect of Disposal on the Financial Position of the Group
52 weeks to 31 January2015£000
Property, plant and equipment (9,266)
Inventories (18,371)
Trade and other receivables (4,198)
Income tax assets (21)
Deferred tax assets (873)
Trade and other payables 10,624
Provisions 1,599
Net assets (20,506)
Fascia name (5,481)
Deferred tax on fascia name 1,519
Net fascia name disposed of on divestment of subsidiary (3,962)
Consideration received, satisfied in cash 18,150
Cash and cash equivalents disposed of -
Net cash inflow 18,150
7. Subsequent events
Sports Unlimited Retail BV
On 20 March 2016, the Group acquired, via its newly incorporated subsidiary
Sports Unlimited Retail BV, the trading assets and trade of the Aktiesport and
Perry Sport fascias from the Trustee of Unlimited Sports Group BV which was
declared bankrupt by the court of Amsterdam on 23 February 2016. On
acquisition there were 187 trading stores and two trading websites.
The Board believe that the cash consideration of E26.5 million represents the
current best estimates of the fair value of the net assets acquired.
Provisional fair value at 20 March 2016
£000
Acquiree's net assets at the acquisition date:
Property, plant & equipment 3,929
Inventories 23,330
Cash and cash equivalents 58
Trade and other payables (8,364)
Net identifiable assets 18,953
Goodwill on acquisition -
Consideration paid - satisfied in cash 18,953
8. Accounts
The financial information set out above does not constitute the Group's
statutory accounts for the 52 weeks ended 30 January 2016 or 52 weeks ended 31
January 2015 but is derived from those accounts. Statutory accounts for the 52
weeks ended 31 January 2015 have been delivered to the Registrar of Companies,
and those for the 52 weeks to 30 January 2016 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