REG - JD Sports Fashion - INTERIM RESULTS FOR THE 26 WEEKS TO 3 AUGUST 2024
02/10/2024 07:00
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RNS Number : 6213G JD Sports Fashion PLC 02 October 2024
2 October 2024
JD SPORTS FASHION PLC
INTERIM RESULTS
FOR THE 26 WEEKS TO 3 AUGUST 2024
Delivering on our global, multi-brand strategy
JD Sports Fashion Plc (the 'Group'), the leading global retailer of sports,
fashion and outdoor brands, today announces its interim results for the 26
weeks ended 3 August 2024 delivering continued strategic progress.
Commenting on the results, Régis Schultz, Chief Executive Officer of JD
Sports Fashion Plc, said:
"We have today reported record interim results with Group revenue of £5.0bn,
and Profit before tax and adjusting items of £405.6m, underscoring our
ability to outperform the sector in a volatile global marketplace. Our success
is a direct reflection of the strength and agility of our global, multi-brand
strategy, which allows us to adapt swiftly to fast-changing industry trends
across the world, and our operational excellence. This ensures we continue to
deliver an industry-leading customer proposition both in store and online.
"Organic sales growth in the first half was 6.4% and our underlying operating
margins were in line with last year, notwithstanding continued cost investment
in our long-term growth. We are reiterating our previous Profit before tax and
adjusting items guidance range of £955-1,035m.
"Our acquisition of Hibbett, Inc., which completed just before the period end,
is a key milestone in our international development and advances the global
nature of the Group through our strengthened position in the US. I remain
confident in the delivery of our exciting growth plans for North America and
that the Group is well positioned to continue growing share in the world's
largest sportswear market.
"I am very proud of our teams across the globe, whose dedication and hard work
have been instrumental in achieving these results. Our strong business model
and clear strategy position us to deliver long-term growth and value creation
for our shareholders."
Key H1 Achievements
· Proven strength and agility of our multi-brand model. In a global
sportswear market benefiting from long-term structural growth, we continued to
outperform the sector in H1. Organic sales growth* was 6.4% with like-for-like
(LFL) sales growth* of 0.7%. Group revenues were up 5.2% to £5.0bn and up
6.8% in constant currency*. Profit before tax and adjusting items* was
£405.6m with statutory reported Profit before tax of £126.3m. Good progress
was made across our three core segments: JD, Complementary Concepts and
Sporting Goods & Outdoor.
· Focus on operational excellence. We continue to invest in the
foundations for future growth including across people, distribution and
governance. In a volatile market, and excluding Hibbett, gross margin was down
10 basis points (bps), while our operating margin was in line with the prior
period at 8.8%. This reflects our operating discipline in a highly promotional
environment, together with strong cost control and good inventory management.
· Growing global presence. We continued to deliver on our strategy
to expand the JD fascia and roll out complementary concepts for a wider range
of customers globally. During the period, the Group completed the acquisition
of Hibbett, adding material scale and presence in North America, which is
already our largest region by revenue and post-acquisition would represent
around 40% of pro-forma annualised group revenue.
· Balance sheet strength. We generate significant cash from
operations in a financial year and our balance sheet strength allows us to
invest capital in our organic growth*, to pursue value enhancing acquisitions
and to finance the buyout of non-controlling interests (NCI).
Performance Summary
£m 26w to 3 August 2024 26w to 29 July 2023 Change Constant currency change
Revenue 5,032.2 4,783.9 5.2% 6.8%
Gross margin 48.2% 48.4% (20) bps
Operating profit before adjusting items* 451.1 422.7 6.7% 8.3%
Operating margin before adjusting items* 9.0% 8.8% 20 bps
Profit before tax and adjusting items* 405.6 397.8 2.0% 3.4%
Adjusted basic earnings per share* (p) 5.15 4.93 4.5%
Net (debt)/cash before lease liabilities* at period end 40.8 1,276.5 (96.8)%
Statutory measures
Revenue 5,032.2 4,783.9 5.2% 6.8%
Operating profit 292.2 374.8 (22.0)%
Net financial expense (45.5) (24.9) (82.7)%
Profit before tax 126.3 353.7 (64.3)%
Basic earnings per share (p) 0.42 4.23 (90.1)%
Dividend per share (p) 0.33 0.30 10%
(1)Explanations for restating numbers for the 26w to 29 July 2023 can be found
in note 14 to the Consolidated Financial Statements
Throughout this release,'*' indicates the use of Alternative Performance
Measures. Please refer to the Alternatives Performance Measures section for
the further information including reconciliations to statutory measures.
Strategic Highlights
Continued strong progress across our four key strategic pillars: -
· JD Brand First: rolling out our no.1 fascia
o Double-digit organic growth* across Europe, North America and Asia Pacific
o Opened 83 new JD stores, including the largest ever JD store in Stratford,
London in April, and on track to open around 200 new JD stores in the full
year
o Transferred an additional 19 stores to JD from Finish Line in the US, MIG
in Eastern Europe and ISRG in Iberia
· Complementary Concepts: delivering scale and customer reach
o Completed acquisition of Hibbett, Inc. adding material scale and presence
in North America, through its 1,179 stores in southeastern USA
o Completion of the Courir acquisition remains subject to clearance from the
European Commission
o 3.4% LFL sales growth* from our existing US community fascias and 4.5% LFL
sales growth* from our Sporting Goods fascias
· Beyond Physical Retail: enhanced platform for long-term growth
o Good progress on Omnichannel: 'ship from store' rolling out across Europe
and successful 'click and collect' trial in France
o Strong uptake in the JD STATUS loyalty programme in the UK following its
full launch in December 2023 with 1.4m active members so far; STATUS also
launched in France and Poland
o Supply chain evolution continued: Heerlen operating manually with
automation now anticipated in 2025 and rationalising UK operations around
Kingsway, leading to the announced Derby closure
· People, Partners & Communities: being the best we can be
o First global partner of the Nike Connected programme following US launch:
demonstrates strength of our long-term brand relationship
o Expanded community outreach through the JD Foundation, hosting our first
"JD UP" careers event in Manchester reaching 2,500 young people with plans to
roll out further
o 26% reduction in Scope 3 emissions on purchased goods
Financial Highlights
· 4,506 stores, up 1,189 from the start of the year, reflecting
store openings, ongoing disposal of non-core stores and the Hibbett
acquisition
· Organic sales growth* of 6.4% and LFL growth* of 0.7%
· Revenue growth of 5.2% to £5,032.2m, including £61m from 10
days of Hibbett trading
· Gross margin of 48.2%, or 48.3% excluding Hibbett, which was down
10bps on the prior period, driven by lower Q2 margin from elevated promotional
activity across apparel and online
· Operating margin before adjusting items* of 9.0%, or 8.8%
excluding Hibbett, which was in line with the prior period; good cost control
offsetting future growth investment
· Profit before tax and adjusting items* of £405.6m was up 2.0%,
up 3.4% on a constant currency basis and flat excluding Hibbett
· Profit before tax of £126.3m reflecting mainly non-cash
adjusting items including updated Genesis put and call option valuation
following the acquisition of Hibbett and the closure of the Derby distribution
centre (DC)
· Adjusted basic earnings per share* up 4.5%
· Continued balance sheet strength; net cash before lease
liabilities* of £40.8m, after stores investment and the acquisitions of the
ISRG/MIG NCIs and Hibbett
· Proposed interim dividend of 0.33p, up 10% on the prior period
Outlook and Guidance
Our trading performance in the first half was in line with our expectations
and our overall guidance range of £955-1,035m remains unchanged. As
highlighted at our Q225 trading update, we are experiencing currency headwinds
this year as the pound strengthens against the US Dollar and the Euro. Our
guidance range of £955-1,035m was based on certain exchange rates(1). Foreign
exchange impacts reduced Profit before tax and adjusting items* by £6m in H1
and, at current rates(2), we expect the H2 impact to be £20m. We expect
Hibbett to contribute c.£25m Profit before tax and adjusting items* in the
full year, reflecting the business contribution from completion, acquisition
accounting adjustments and a £25m interest cost from the new acquisition
facility.
(1)The £955-£1,035m guidance range was based on 1.25 for the US Dollar and
1.15 for the Euro
(2)Current rates used are 1.34 for the US Dollar and 1.20 for the Euro. In
terms of impacts on H2 profit, every one US cent is worth £1.7m of Profit
before tax and adjusting items* and every one Euro cent is worth £1.0m of
Profit before tax and adjusting items*.
Enquiries:
JD Sports Fashion
Plc
Tel: 0161 767 1000
Régis Schultz, Chief Executive Officer
Dominic Platt, Chief Financial Officer
Mark Blythman, Director of Investor Relations
Advisors
Bank of America - Antonia Rowan
Tel: 0207 628
1000
Peel Hunt LLP - Dan Webster
Tel: 0207
418 8869
FGS Global - Rollo Head, Jenny Davey, James
Thompson Tel:
0207 251 3801
Results Meeting and Webcast
Our results presentation will be held in person at Peel Hunt, 100 Liverpool
Street London EC2M 2AT and webcast live at 9:00 (BST) today. To register for
the webcast, please visit the following link:
https://app.webinar.net/VyQZb2rb25w (https://app.webinar.net/VyQZb2rb25w) .
Downloadable materials will also be available on the Investor Relations
section of the Company website: Results Centre | JD SportsFashion (jdplc.com)
(https://www.jdplc.com/investor-relations/reports-presentations) A replay will
be made available shortly after the event concludes on the same link, followed
by a transcript of the event.
Financial Calendar
21 November 2024: Q325 trading update
Early 2025: Q425 trading update
Q1 2025: Capital Markets Day ("Spotlight on the US")
May 2025: FY25 results
About JD Sports Fashion Plc
Founded in 1981, the JD Group ('JD') is a leading global omnichannel retailer
of Sports Fashion brands. JD provides customers with the latest sports fashion
through working with established and new brands to deliver products that our
customers most want, across both footwear and apparel. The vision of JD is to
inspire the emerging generation of consumers through a connection to the
universal culture of sport, music and fashion. JD focuses on four strategic
pillars: JD Brand First, first priority, first in the world; leveraging
Complementary Concepts to support JD Group global expansion; moving Beyond
Physical Retail by building the right infrastructure and creating a lifestyle
ecosystem of relevant products and services; and doing the best for its
People, Partners and Communities. JD is a constituent of the FTSE 100 index
and had 4,506 stores worldwide at 3 August 2024.
Chief Executive Officer's Statement
As I reflect on the first half of this year, I am proud to report that we have
continued to make good progress on our ambitious five-year plan. The context
to this progress has been a promotional and competitive marketplace, and
continued economic uncertainty. Our ability to navigate these complexities
speaks to the strength and agility of our business model and our people.
I am confident that the global sportswear market, and in particular the
athleisure space within it, has years of structural growth ahead of it with
favourable trends like casualisation and active lifestyles continuing.
Euromonitor(1) is forecasting that the sportswear market will achieve value
growth of 6.6% per year from 2023 to 2028, on average. This would take the
total value of the market from $396bn in 2023 to $544bn in 2028 and within
this timeframe, we have targetted reaching double-digit market shares in our
key markets.
We believe our business model can deliver the continued outperformance needed
to meet these targets. We operate an agile, multi-brand model that is
supported by strong brand relationships, market-leading global scale and
operational excellence across all channels. We also have an attractive
financial model that delivers good operating margins and generates significant
cash, supported by a strong balance sheet.
In this six-month period, we again outperformed a challenging and volatile
market with organic sales growth* of 6.4% and in particular I would highlight
the JD segment delivering 8.5% organic sales growth*.
Also fundamental to the long-term success of our growth strategy is the
strengthening of the foundations to support a business of this scale in terms
of people, systems, processes and controls. We have continued to strengthen
the leadership team recruiting a new Chief Supply Chain Officer who is
focussed on delivering a more efficient supply chain, reflecting our changing
global business mix, both by geography and by sales channel. We have also
continued investing in our omnichannel proposition, governance and cyber
security. By focusing on these foundational elements, we not only improve
operational efficiency but also enhance our capacity to deliver consistent
value for our customers and other stakeholders.
And of course, we have acquired Hibbett, the leading community sports fashion
retailer in the US. I am excited by the opportunities that Hibbett brings and
I'd like to welcome Mike Longo, Jared Briskin and the whole Hibbett team to
JD.
Overall, we remain focused on the goals outlined in our five-year strategy
across the four pillars of JD Brand First, Complementary Concepts, Beyond
Physical Retail and People, Partners and Communities. The progress we have
made so far gives us confidence that we are on the right path and that we are
well-prepared to capitalise on the opportunities that lie ahead.
(1)Source: Euromonitor International Limited, Apparel & Footwear 2024
edition, retail value RSP incl. sales tax, US$, year on year exchange rate,
current terms
Performance
In the 26 weeks to 3 August 2024, we delivered revenue of £5,032.2m, 5.2% up
on the comparative 26 week period, in what continues to be a volatile market.
In constant currency, sales growth* was 6.8%.
Revenue growth was impacted negatively by 2.8% due to prior period revenue
from disposals and 1.5% from currency. There was also a 1.9% benefit from the
timing impact of the previous 53-week year. Against this adjusted base,
like-for-like ('LFL') sales growth* was 0.7%, on the back of 2.4% growth* in
Q2 and there was a 5.7% benefit from new space and the annualisation of new
space in H224, leading to organic sales growth* of 6.4%. Acquisitions added
1.5%.
In terms of our segments, JD represented 71% of both our Revenue and Profit
before tax and adjusting items* in H1. JD grew revenue 7.1% and achieved a
gross margin of 49.5%. Profit before tax and adjusting items* was down 2.0%
reflecting the ongoing investment in the whole Group's future growth.
Complementary Concepts' revenue grew 12.3% with Profit before tax and
adjusting items* being up 15.7%, both reflecting good performances from our
existing community fascias, Shoe Palace and DTLR, and the contribution from
Hibbett. Sporting Goods and Outdoor saw revenue drop 4.5% but Profit before
tax and adjusting items* grew 16.2%, reflecting partly disposals of
loss-making stores in the period.
Geographically, our two fastest growing regions, Europe and North America,
delivered organic sales growth* of 10.1% and 10.7% respectively with the
rollout of the JD fascia leading the growth in both regions. In the UK,
trading improved sequentially through H1, but period-on-period performance was
held back by non-core divestments made during the prior period and the UK's
higher weighting towards both online and apparel. LFL trading in Asia Pacific
was down on the prior period, against tough comparatives, although the region
achieved double-digit organic sales growth*. Our pivot toward becoming a more
global business continued with North America generating 35% of revenue, Europe
31%, the UK 30% and Asia Pacific 4%.
The post-Covid shift from online back to offline continued in the period. As a
result, although we made good progress on our omnichannel initiatives,
including 'click and collect' and 'ship from store', we saw online sales fall
1.4%pts to 20.7% of Group revenue. Correspondingly, stores increased their
share of revenue to 78.0%, on the back of 9.3% growth.
Footwear has continued to trade better than apparel, although both categories
grew in the period. Footwear in the lifestyle space is a resilient, growth
category driven by the continued growth in 'sneakers' around the world. Growth
in the period was 9.6% and footwear's share of our revenue increased 2.4%pts
to 59.8%. Apparel was again held back by challenging weather conditions,
particularly in the UK and Europe, where the spring/summer season was wetter
than average. This had a knock-on effect on margin as the industry sold more
stock at discounted prices in the summer sales season ahead of the
back-to-school period and then into the autumn/winter season. Apparel revenue
was up 0.7% with its share of revenue falling 1.4%pts to 29.8%.
We ended the period with 4,506 stores worldwide. This increase reflects the
inclusion of 1,179 stores from the Hibbett acquisition. Excluding Hibbett, we
opened 117 stores and closed 107 stores, mainly from the planned
rationalisation of underperforming non-JD MIG stores, primarily in Poland, and
both relocations and Macy's closures in North America. The rationalisation of
the MIG portfolio is another benefit from the NCI buyout last year as we now
have freedom to improve the profitability of the overall business. The total
square footage of our store portfolio at the period end was 18.9m, equating to
4,199ft(2) per store, an increase of 1.1% from the start of the period.
Strategy Update
Our vision is to be the leading, global Sports Fashion powerhouse. Our
five-year strategic plan, launched at our Capital Markets Day in February
2023, is the roadmap to achieving this vision. The plan has four key strategic
pillars: -
1. JD Brand First - rolling out our no.1 fascia
2. Complementary Concepts - delivering scale and customer reach
3. Beyond Physical Retail - enhanced platform for long-term growth
4. People, Partners and Communities - being the best we can be
We have made good progress across these pillars as we continue to deliver on
our five-year plan. To this end, we are currently focused specifically on our
store rollout programme, our digital transformation and delivering operational
excellence.
Store rollout: With a global presence, ensuring a consistent customer
experience is key. We have set out previously a goal of 200 new JD stores a
year reflecting a mix of new, upsized and converted stores. In the period, we
opened 83 new JD stores, including the opening of our largest JD store, in
Stratford, London, in April and our flagship Champs Elysees store in Paris
ahead of the Olympics, and we converted an additional 19 stores to the JD
fascia.
Digital Transformation: We are looking to set a global standard for customer
experience in our stores and across our digital channels as part of our
developing omnichannel model. This is a multi-faceted programme, covering
developments like 'click and collect', 'ship from store' and our JD STATUS
loyalty programme.
Operational Excellence: We are making good progress on improving governance,
systems and processes. Actions taken during the period included: hiring a new
Chief Supply Chain Officer to focus on developing both a global centre of
excellence and overseeing our European operations, including ensuring the
successful automation of our Heerlen DC and the rationalisation of our UK
supply chain around Kingsway; appointing Prama Bhatt as an additional US-based
non-executive director; and rolling our 'Global Voice of the Customer' to help
improve in-store customer experiences.
We remain focused on delivering our ambitious 'triple-double' targets of
double-digit sales growth(1), double-digit operating margin(1) and
double-digit market shares in our key markets over the course of the plan. Our
double-digit sales growth(1) target is an average over the term of the plan
and there will be volatility each year depending on the point in the economic
cycle we are in. Notwithstanding the current volatile and challenging
macro-economic backdrop, we achieved positive LFL sales growth* and 6.4%
organic sales growth* in the period, after a slower start in Q1, driven partly
by tough comparatives with the prior period. The positive impact from the
acquisition of Hibbett strengthens our confidence in achieving these targets.
On operating margin*, our target is to reach and maintain a double-digit
operating margin(1). The Operating margin before adjusting items* was 9.0% in
the period, benefitting from the Hibbett contribution. Without that, it was
8.8%, reflecting the strength of our cost controls being able to offset the
ongoing investment in our operating platforms for long-term growth.
(1)Sales growth is measured using organic sales growth* and operating margin
is measured using Operating margin before adjusting items*. These terms are
defined in the Alternative Performance Measures section.
JD Brand First
The JD brand is our no.1 priority and we have three growth pillars for our JD
Brand First strategy: accelerating the opening of, and conversion to, JD
stores across North America; accelerating the opening of, and conversion to,
JD stores in Europe; and expanding the JD brand further by entering new
markets through either acquisition or franchise. There is significant 'white
space' for the JD brand to grow in North America, Europe and Asia Pacific.
Accordingly, we anticipate the JD store opening programme will contribute
around 5%pts of new space each year through the course of the five-year
strategic plan.
We opened 102 new JD stores in the period, of which 83 were new stores and 19
were conversions from other fascias, mainly from Finish Line in the US. We
opened in 19 countries across the UK, Europe, North America and Australia, and
we opened in one new country, Bulgaria. Return on investment for our JD store
opening programme remained ahead of expectations with an average payback of
less than three years and new JD store uplifts are more than 20% ahead of
expectations.
We are encouraged by the momentum in North America where we converted 13
Finish Line stores to the JD fascia and opened a further 24 new JD stores
across the US and Canada. New locations for the JD brand included the Bakers
Centre in Philadelphia and the Mayfair Shopping Centre, in Victoria, British
Columbia.
In Europe, we opened 49 new JD stores and converted six stores from both ISRG
and MIG locations in Spain, Portugal, Poland and Lithuania, the first few of a
total of around 40 that we will convert from ISRG and MIG over the next two
years. We opened our first two stores in Bulgaria, both located in the
capital, Sofia. Our openings included our new flagship store on the Champs
Elysees, which was opened ahead of the 2024 Paris Olympics and will help to
grow global awareness of the JD brand.
In the UK, the main strategic focus continues to be on improving locations or
store size in existing cities and towns. During the period, we opened three
new stores, relocated three stores and upsized two stores. Highlights included
the consolidation and upsizing of Stratford, which has subsequently become our
highest turnover store in the world.
In Asia Pacific, we opened three new JD stores. These were all in Australia,
taking the total number of JD stores here to 58. These openings were our first
store in Canberra, a store in Charlestown, New South Wales, and a store in
Toowoomba, the largest inland town in Queensland.
We are pursuing a franchise strategy to support our own store growth around
the world. Having signed two franchise agreements so far - in the Middle East
and in South Africa - we opened two franchised stores in the period. Our first
was in Bahrain and our second in Cairo, Egypt. Our first store in South Africa
is due to open in the second half of the year.
Complementary Concepts
Our Complementary Concepts segment allows us to widen our customer base and
maintain a segmented customer focus. We have two key pillars currently within
this element of our strategy: growing our community brands within North
America and optimising the profitability of the ISRG and MIG businesses within
Europe. We also operate Cosmos, a sporting goods business in Greece and
Cyprus, and our UK-based outdoor fascias, led by Go Outdoors.
Our position in North America strengthened considerably during the period with
the acquisition, just before the period end, of Hibbett, Inc. for $1,077m.
Hibbett brings 1,179 stores to the Group, mainly in southeastern USA, and
across the Hibbett and City Gear fascias. It reported profit before tax of
$132m in the 53 weeks to 3 February 2024. Hibbett’s focus is on community
locations in underserved neighbourhoods. This approach fits neatly with our
other community brands in the US - DTLR and Shoe Palace - and the entire
community business in the US sits comfortably alongside the growing JD
business with limited overlap and an opportunity to generate efficiencies
through looking at the North American infrastructure support as one business.
I am excited by the opportunities this acquisition will bring to our North
America business and look forward to working with Mike Longo, Jared Briskin
and the rest of the talented team at Hibbett.
The proposed acquisition of Courir is yet to be completed. We are working closely with the European Commission and I am hopeful we will conclude this acquisition soonHaving simplified the Group through the acquisition of the minority interests in ISRG and MIG last year, we are now converting around 40 stores from within the two businesses to the JD fascia. We expect this process to complete during the next financial year. We are also optimising the organisational structures of these businesses and integrating them more closely into the Group. The Sporting Goods and Outdoor segment, covering both the ISRG and Cosmos fascias, and our UK outdoor fascias, achieved LFL sales growth* of 0.7%, in line with the Group in the period, driven by over 4% LFL sales growth* from Sporting Goods but held back by a tougher trading period for our UK Outdoor business.
Beyond Physical Retail
The overarching ambition for this element of our strategy is to create a
single, industry-leading omnichannel experience for our customers. The
technology investments we are making, including in loyalty, will make our
proposition more omnichannel and give us a better single view of the customer.
We believe that JD, as a brand, is trusted by consumers and this relationship
can be developed further to create a lifestyle ecosystem of relevant products
and services.
We have five areas of focus: developing our omnichannel proposition further;
rolling out and leveraging our loyalty programme; improving the efficiency and
effectiveness of our supply chain; replatforming our websites; and
strengthening our cyber security.
Our omnichannel development is about enhancing the customer experience across
both the online and offline channels, creating a seamless interaction between
them. With this in mind, we are rolling out 'ship from store' across Europe
and we have concluded a successful 'click and collect' trial in France. We
have built out our roadmap for the European rollout and will roll it out in
conjunction with the re-platforming rollout. We have enhanced our omnichannel
expertise with Hibbett, which will be used to improve our overall North
America omnichannel offer going forward.
Our JD STATUS loyalty programme in the US now has 5.1m active members. We are
building a strong loyalty programme in Europe, following the successful
rollout in the UK, and launched the programme into France and Poland during
the period. At the period end, we had 1.8m app downloads in the UK, of which
81%, or 1.4m were active members. The average transaction value of JD STATUS
members in the UK is 33% higher than non-members. These are very encouraging
data points that give us confidence for the programme's success in our
European markets.
The programme to replatform our websites is progressing. We launched a new
platform in Thailand after the period end and we are on track to launch in the
UK and in Italy in 2025.
The evolution and optimisation of our European supply chain continued through
the period. The Heerlen DC is now operating on a manual basis and we have
delayed automation until the middle of 2025 to make a number of system and
process improvements. This will extend the 'double-running' costs in Europe
and result in a short-term delay to the recognition of the benefits of a fully
automated central European DC hub, such as lower costs per unit and speedier
delivery to customers. After the period end, we rationalised our UK supply
chain around our Kingsway DC, leading to the announced closure of our Derby
DC, following the sale of the UK fashion businesses across FY23 and FY24, and
the continued rebalancing of customer shopping between stores and online.
Elsewhere, projects to develop our Morgan Hill DC in North America and to open
our new Leppington DC in Australia remain on track.
People, Partners & Communities
We remain focused on improving our people systems functionality; creating a
target organisation for future growth and people development; developing our
key partner programmes; and continuing to make a positive contribution to the
communities where we operate.
People - We completed a successful rollout of the new 'global customer voice',
or 'NPS' programme, in the UK and we have commenced rollout across the rest of
the Group. This will be a key tool in helping our teams understand how to
deliver even better customer experiences on a store-by-store basis. Our global
HRIS is still in development with 'go live' expected by the end of this
financial year. On our target organisation plans, we are well into the
restructuring of our ISRG, MIG and Outdoors businesses while, just after the
period end, we strengthened the leadership team with the appointment of Wim
van Aalst as our new Chief Supply Chain Officer. We also launched new employee
resource groups providing focussed colleague support on Disability and
Neurodiversity, LBGTQ+, Ethnicity and Culture, and Mental Health.
Partners - Just after the period end, we became Nike's first Global Retail
Partner for its Nike Connected loyalty programme with the expansion of our
partnership into the US. The JD fascia in the US now joins Hibbett as being a
programme partner in the US. Customers that join both programmes and then
connect them get access to members-only Nike footwear and apparel, early
access to certain products and exclusive experiences and other benefits
through the JD STATUS app.
Communities - During the period, we delivered our inaugural 'JDUP' immersive
careers event, hosting over 2,500 young people from schools and charity
partners impacted by low social mobility at the Manchester Convention Centre.
This event was supported by the JD Foundation, which aims to build stronger
youth communities and transform young people's lives through opportunities,
engagement and social change. The event involved over 20 charity partners and
15 schools and was delivered by over 100 JD employee volunteers. Through
immersive activities, we highlighted the range of careers within the Group
with the aim of inspiring and informing young people. Our next event is
scheduled for October, in London, with 3,500 young people confirmed to attend.
With regards to the environment, we continue to make good progress and remain
on track to achieve our Science Based Targets for emissions reduction. We have
now reduced our Scope 3 emissions intensity by 26% versus our FY20 baseline
year.
Régis Schultz
Chief Executive Officer
2 October 2024
Chief Financial Officer's Statement
Financial Performance
£m H125 H124 (restated) (1) Change Constant Currency
26 weeks to 3 August 2024 26 weeks to 29 July 2023 Change
Revenue 5,032.2 4,783.9 5.2% 6.8%
Gross profit 2,428.0 2,317.4 4.8%
Gross margin 48.2% 48.4% (20) bps
Operating costs before adjusting items* (1,976.9) (1,894.7) 4.3%
Operating profit before adjusting items* 451.1 422.7 6.7% 8.3%
Operating margin before adjusting items* 9.0% 8.8% 20 bps
Net financial expense before adjusting items* (45.5) (24.9) 82.7%
Profit before tax and adjusting items * 405.6 397.8 2.0% 3.4%
Adjusting items * (279.3) (44.1) -
Profit before tax 126.3 353.7 (64.3%)
Throughout this release,'*' indicates the use of Alternative Performance
Measures. Please refer to pages 37 to 41 for further information including
reconciliations to statutory measures.
Consolidated Income Statement
Revenue
Revenue for the Group increased 5.2% to £5,032.2m (H124: £4,783.9m). Sales
growth* in constant currency was 6.8%.
Organic sales growth* was 6.4%, comprised 0.7% like-for-like sales growth
('LFL') and 5.7% from net new space ('non-LFL'*). Constant currency* growth of
6.8% included the benefit of reporting period misalignment with the prior
period due to the 53(rd) week at the end of FY24 which added 1.9%, offset
partially by the impact of acquisitions, including Hibbett of £63m, and
disposals since H124 of (1.5%), neither of which are included in Organic sales
growth*.
Gross Margin
Despite overall market volatility, total gross margin of 48.2% (H124: 48.4%),
was only 20 basis points (bps) behind the prior period. The 20bps reduction
reflected a 10bps reduction due to the inclusion of Hibbett and 10bps for the
remaining business. Q1 saw gross margin flat at 48.2%, while the Q2 decline
of 40bps, of which 10bps was Hibbett, was driven mainly by the apparel
category, which was impacted by a late spring/summer season where we saw
stronger sales being made during the seasonal sale period at lower margin.
Operating Costs before Adjusting Items
Operating costs before adjusting items* grew 4.3% to £1,976.9m, of which 0.7%
growth is from Hibbett. The remaining increase is from continued investment in
our people, supply chain, operating platforms, IT systems and new stores to
support future long-term growth.
A breakdown of operating costs before adjusting items* can be seen in the
table below.
£m 26 weeks to 3 August 2024 26 weeks to 29 July 2023 Change
Selling and distribution expenses (1,769.1) (1,685.0) 5.0%
Administrative expenses before adjusting items* (223.4) (225.9) (1.1)%
Share of profits of equity-accounted investments 3.4 3.1 9.7%
Other operating income 12.2 13.1 (6.9)%
Operating costs before adjusting items* (1,976.9) (1,894.7) 4.3%
(1)A prior period adjustment of £20.4m has been recorded within selling and
distribution expenses, impacting the classification of marketing income from
operating costs before adjusting items* to gross profit.
Operating Profit before Adjusting Items*
Operating profit before adjusting items* was £451.1m, 6.7% up (8.3% at
constant currency) on the prior period (H124: £422.7m). The operating margin
before adjusting items* was 9.0%, up 20 bps on the prior period, helped by the
strong performance of Hibbett in the 10 days of ownership driven by the 'back
to school' sales peak. Without Hibbett, the operating margin before adjusting
items* was 8.8%, in line with the prior period.
Net Financial Expense before Adjusting Items*
Net financial expense before adjusting items* in the period was £45.5m, which
was £20.6m higher than the prior period (H124: £24.9m). The key driver was
financial expenses before adjusting items*, which increased by £19.6.m to
£60.6m, the majority of which was lease liabilities expense driven by a
£234m increase in lease liabilities compared to HY24 (excluding leases
acquired with Hibbett) as well as increasing interest rates used on lease
renewals.
Profit Before Tax and Adjusting Items*
Profit before tax and adjusting items* was £405.6m (H124: £397.8m), which
was 2.0% ahead of the prior period (+3.4% on a constant currency basis).
Hibbett contributed £13m in the 10 days following acquisition, driven by high
demand in the seasonal 'back to school' sales period that peaked within these
10 days. Excluding the Hibbett contribution Profit before tax and adjusting
items* was flat on a constant currency basis.
Adjusting Items*
Adjusting items* was a net charge of £279.3m (FY24: net charge of £44.1m),
as detailed in the table below.
£m 26 weeks to 3 August 2024 26 weeks to 29 July 2023 Restated(1)
Impairment of tangible and intangible assets: Swim & Derby DC 101.6 7.9
Acquisition related costs: Courir & Hibbett 22.1 -
Loss on divestments of group companies: principally sale of non-core fashion 12.7 15.4
businesses
Amortisation of acquired intangibles 22.5 24.6
Adjusting items within administrative expenses* 158.9 47.9
Movement in present value of put and call options 120.4 (3.8)
Adjusting items within net financial expense* 120.4 (3.8)
Adjusting items* 279.3 44.1
(1)Please refer to Note 14 of the for further details of the restatement
The impairment of tangible and intangible assets in the current period relates
to the impairment of fascia name and assets arising on the acquisition of Swim
(£13.3m), based on the latest impairment assessment, and fixed assets
impairment and closure costs (£88.3m) in relation to the Derby Distribution
Centre ("DC"). In July 2024, the Group announced a consultation on the
proposed closure of the Derby DC following a review of the Group's UK DC
capacity requirements. The Group has subsequently announced the decision to
proceed.
Acquisition-related costs of £22.1m are in respect of the Courir and Hibbett
acquisitions, of which Courir remains subject to clearance by the European
Commission and, as at the date of this report, has not been concluded, but is
still expected to do so.
The Group incurred a £12.7m of loss on divestments and restructuring of group
companies.
As disclosed in the FY24 annual report, we have extended the definition of
adjusting items to include amortisation of acquired intangibles from our
Profit before tax and adjusting items. This is a charge of £22.5m in the
period. We have restated the H124 results for this change, leading to a
£24.6m charge moving from administrative expenses to adjusting items within
administrative expenses.
The £120.4m charge in the present value of the put and call options reflects
changes in the present value of the future buyouts of NCIs and comprises
primarily of Genesis Topco Inc (£126.7m charge) and DTLR (£6.3m credit). The
charge on Genesis, the company that operates all our North America businesses
and of which, the Group owns 80%, is driven by the acquisition of Hibbett,
which has been brought into the Genesis group. In addition, there was a credit
of £6.3m in relation to the DTLR option, which was revalued prior to the
acquisition of the NCI which was completed in the period.
Operating Profit
Operating profit was £292.2m (H124: £374.8m), which is a decrease of 22.0%.
This is due to an increase in adjusting items* charged within administrative
expenses due to higher impairments of tangible and intangible assets and
investments as discussed in further detail above.
Profit Before Tax
Profit before tax is £126.3m (H124: £353.7m). The decrease of £227.4m
versus the prior period is due primarily to the increase in adjusting items of
£235.2m, resulting primarily from the impact of movement in present value of
put and call options between periods and the impairment of tangible assets
compared to the prior period.
Income Tax Expense
The income tax expense was £74.1m (H124: £96.2m).
The total effective tax rate increased from 27.2% (restated) to 58.7% due to
the movement in the value of the put and call valuations in both periods and
non-deductible costs associated with acquisitions and divestments in the
current period. The put option movement in the current and prior period is not
tax deductible.
The income tax expense before adjusting items* was £103.9m (H124: £102.4m).
The effective tax rate before adjusting items* remained consistent at 25.6%
(H124: 25.7%).
Profits Attributable to Non-Controlling Interests
The charge relating to NCIs fell £8.7m from £39.1m in H124 to £30.4m. This
was due to the impact from the buyout of the 49.99% NCI in ISRG and the buyout
of the 40% NCI in MIG during the H224 period. The only material NCI left in
the Group is the 20.0% in Genesis Topco Inc.
Earnings Per Share
On a statutory basis, basic and diluted earnings per ordinary share dropped
from 4.23p to 0.42p due to higher adjusting items* in the period.
Adjusted basic earnings per ordinary share* increased 4.5% from 4.93p to 5.15p
due to higher adjusted profits attributable to the parent in the period and
the 10-day contribution from Hibbett.
Segmental Report
£m/26w to 3 August 2024 JD Complementary Concepts Sporting Goods & Outdoor Other Total
Revenue 3,572.7 714.8 710.3 34.4 5,032.2
Gross profit 1,768.8 332.0 311.4 15.8 2,428.0
Gross margin 49.5% 46.4% 43.8% 45.9% 48.2%
Operating costs before adjusting items* (1,450.6) (233.6) (281.4) (11.3) (1,976.9)
Operating profit before adjusting items* 318.2 98.4 30.0 4.5 451.1
Operating margin before adjusting items* 8.9% 13.8% 4.2% 13.1% 9.0%
Net financial expense before adjusting items* (29.6) (7.4) (8.4) (0.1) (45.5)
Profit before tax and adjusting items* 288.6 91.0 21.6 4.4 405.6
£m/26w to 29 July 2023 JD Complementary Concepts Sporting Goods & Outdoor Other Total
Revenue 3,336.6 636.6 743.9 66.8 4,783.9
Gross profit 1,652.6 302.7 332.1 30.0 2,317.4
Gross margin 49.5% 47.5% 44.6% 44.9% 48.4%
Operating costs before adjusting items* (1,347.1) (216.4) (307.6) (23.6) (1,894.7)
Operating profit before adjusting items* 305.5 86.3 24.5 6.4 422.7
Operating margin before adjusting items* 9.2% 13.6% 3.3% 9.5% 8.8%
Net financial expense before adjusting items* (10.9) (7.6) (5.9) (0.5) (24.9)
Profit before tax and adjusting items* 294.6 78.7 18.6 5.9 397.8
JD
JD segment revenue was £3,572.7m, up 7.1% on the prior period and 8.7% at
constant currency. This segment represented 71.0% of the Group's revenue
(69.7% H124) and continues to be the primary focus under our JD First
strategy. The underlying LFL sales growth was 0.6% with organic sales
increasing 8.5% as we continue to grow our store portfolio, with 1,951 at the
period end, which was up 49 since the beginning of this financial year. The
Gross margin of 49.5% remained flat versus the prior period with Operating
profit before adjusting items up 4.1% (+5.5% in constant currency).
JD UK- The UK is JD's most mature market and saw revenues fall 4.6% to
£1,235.3m, driven by the disposal of non-strategic brands over the previous
12 months. On an adjusted basis, which excludes the carryover impact from the
53(rd) week of the comparative full year period, LFL sales and organic sales
were down 2.4% and 0.9%, respectively. These declines reflect a challenging,
and often volatile, UK market. The earlier Easter falling at the end of March
in the current year, combined with unfavourable spring and early summer
weather conditions, dampened footfall and full price demand for seasonal
apparel lines resulting in a more promotional environment thereafter. This,
along with higher penetration of lower margin replica sales through the Euro
2024 tournament, saw pressure on gross margins. Operating profit before
adjusting items was down 13.9%, which also incorporates continued investment
in the business, including in retail wages, cyber resilience and across other
technology-led initiatives. JD Gyms again performed strongly, seeing revenue
growth of 16.8% to £67.8m, as the number of operating gyms increased from 80
to 90 since H124.
JD Europe - JD Europe growth continues to be driven by new store rollouts and
conversions supported by a maturing estate and increasing market awareness of
JD. Revenue grew 14.7% to £981.1m and by 17.4% on a constant currency basis.
On an adjusted basis, which excludes the carryover impact from the 53(rd) week
of the comparative full year period, LFL sales growth was 1.7% and organic
sales growth was 15.6%. This trading performance was particularly encouraging
given very strong LFLs in the prior period and the impact of the Olympics in
France, which softened Paris footfall in July. Operating profit before
adjusting items was up 39.2% on the prior period reflecting mainly the
acquired Conbipel and Gap store portfolios.
JD North America - JD North America revenue grew 14.5% to £1,158.0m and 16.8%
in constant currency. On an adjusted basis, which excludes the carryover
impact from the 53(rd) week of the comparative full year period, LFL growth
was 3.3% with the main driver coming from our JD US facias. Organic sales
growth was 13.2% reflecting the growing presence of the JD brand with 275 JD
stores open at the end of the period in North America, compared with 175 12
months' previously. Gross margin saw an increase period-on-period, supporting
Operating profit before adjusting items* growth of 34.0%.
JD Asia Pacific - Revenue grew 0.2% to £232.7m and up 4.9% on a constant
currency basis. We saw strong organic growth of 10.5%, driven by growth in
Thailand, Malaysia and Australia. Operating profit before adjusting items* was
down 10.4% as we continued to invest in the fulfilment capabilities to help
drive further scale in the region.
Complementary Concepts
Revenue of £714.8m was up 12.3% on the previous period and 13.7% at constant
currency.
Community revenue, which includes Shoe Palace, DTLR and the recent acquisition
of Hibbett, was up 18.5% to £595.8m. Organic sales growth* of 5.5% reflected
LFL sales growth* of 3.4%, store growth in our Community brands (Shoe Palace
and DTLR) and the acquisition of Hibbett Inc during the period, offset by the
decline in our complementary fascias of 11% to £119m, driven by the closure
of 37 stores as we converted a number of stores to the JD brand and closed
stores in non-core brands.
Sporting Goods and Outdoors
Revenue was down 4.5% to £710.3m ((3.0)% at constant currency), impacted by
four stores converted and now reported under the JD brand, and two closures.
LFL sales growth* was 0.6% and organic sales growth* was 1.6%. Operating
profit before adjusting items* was up 25.2% on a constant currency basis and
up 22.4% on a reported basis.
Sporting Goods - Revenue was £447.0m, reflecting LFL growth* of 4.5% offset
by the impact of the closure of the SUR business. Operating profit before
adjusting items* was up 13.9%.
Outdoors - Revenue of £263.3m was down 3.2% on the prior period. LFL sales
growth* fell 5.3% and organic sales growth* was down 5.6%. Trading was
impacted negatively by key product lines being delayed by the Red Sea issues
earlier in the year and an earlier Easter falling outside the camping season
for the first time since 2018. Poor weather in Q2 compounded the issue
reducing demand for seasonal Outdoor Living product (tents, camping
equipment). Operating profit before adjusting items was £2.3m, up from £1.7m
in the prior period, reflecting the closure of several non-profitable Blacks
and Millets stores and improved supply chain processes that are now delivering
efficiencies.
Geographical Report
£m/26 weeks to 3 August 2024 UK Europe North America Asia Pacific Total
Revenue 1,498.6 1,547.1 1,753.8 232.7 5,032.2
Operating profit before adjusting items* 143.6 67.9 210.6 29.0 451.1
Operating margin before adjusting items* 9.6% 4.4% 12.0% 12.4% 9.0%
No of stores 668 1,296 2,450 92 4,506
£m/26 weeks to 29 July 2023 UK Europe North America Asia Pacific Total
Revenue 1,566.5 1,461.2 1,514.1 242.1 4,783.9
Operating profit before adjusting items* 163.9 56.3 166.7 35.8 422.7
Operating margin before adjusting items* 10.5% 3.9% 11.0% 14.8% 8.8%
No of stores 674 1,334 1,247 92 3,347
North America now represents the largest geographic area from a Revenue and
Operating profit before adjusting items* perspective with 35% of sales and 47%
of operating profit. Hibbett contributed £61.3m Revenue and £13.2m Operating
profit before adjusting items*.
Cashflow Statement
A summary cashflow showing how the change in cash and cash equivalents((1)) is
calculated, can be seen in the table below.
£m 26 weeks to 3 August 2024 26 weeks to 29 July 2023
(unaudited) (unaudited)
Profit before tax 126.3 353.7
Add back impairments of tangible, intangible assets and investments 95.6 7.9
Add back non-cash other adjusting items 162.9 36.2
Depreciation and amortisation of non-current assets 324.4 291.9
Change in working capital (238.5) (265.0)
Repayment of lease liabilities (189.1) (187.9)
Capital expenditure (251.2) (209.1)
Income taxes paid (132.4) (109.4)
Other (11.9) (37.3)
Net cashflow before dividends, financing. acquisitions and disposals* (113.9) (119.0)
Net cashflow from interest-bearing loans and borrowings (42.0) (6.6)
Drawdown of acquisition finance 801.6 -
Acquisition of subsidiaries, NCI and cash consideration of disposals (836.7) (77.3)
Equity dividends paid (31.0) -
Dividends paid to NCI in subsidiaries net of dividends received - (2.1)
Change in net cash and cash equivalents including foreign exchange losses(1) (222.0) (205.0)
Cash and cash equivalents((1)) at start of the period 1,101.6 1,548.9
Cash and cash equivalents((1)) at end of the period 879.6 1,343.9
((1)) Cash and cash equivalents equates to the cash and cash equivalents
presented in the Consolidated Statement of Cash Flows
Total depreciation and amortisation was £324.4m, up £32.5.m or 11.1%, on the
prior period, reflecting an increased investment programme. This included a
£11.6m increase in depreciation on property, plant and equipment and a
£10.6m increase in depreciation on right-of-use assets. Amortisation of
intangibles increased by £10.3m.
There was an increase in working capital of £238.5m in the period. This was
due primarily to an increase in inventory of £136.9m when compared to the
typically lower year-end balance sheet date position.
Lease liability repayments increased slightly to £189.1m.
Capital expenditure* in the period was £251.2m, up £42.1m on the previous
period. The increase was due to planned store openings in FY25, in line with
our objective to increase the JD brand particularly within Europe (£54m) and
the US (£74m).
Logistics expenditure was higher in the prior period due to capital
expenditure incurred prior to the opening of the Heerlen and Derby
distribution centres. Technology expenditure increased due to investment in
the JD head office and the technology related to the loyalty programme
rollout.
£m 26 weeks to 3 August 2024 26 weeks to 29 July 2023
Investment in physical retail fascias & gyms £159.9m £119.4m
Investment in logistics infrastructure £61.2m £73.3m
Investment in technology & other £30.1m £16.4m
Capital expenditure* £251.2m £209.1m
As a result, the net cash outflow before dividends, financing, acquisitions
and disposals* was £113.9m in the period, compared to an outflow of £119.0m
in the prior period, with the decrease due primarily to lower net working
capital cash outflow.
The cash consideration from acquisitions and disposals* was £836.7m, as we
acquired Hibbett Sports for £809m, bought NCIs in Sport Zone Canaries, JD
Canaries and DTR Villa LLC, and bought the trade and assets of Simply Gyms,
offset marginally by a net cash inflow from disposals including Gym King and
Bodytone.
The drawdown of financing in the period was £801.6m, mostly in relation to
the acquisition of Hibbett.
Dividend payments amounted to £31.0m in the period.
As a result, the change in net cash and cash equivalents in the period was an
outflow of £222.0m. We still retain a strong balance sheet as our closing
cash and cash equivalents balance was £879.6m. Net debt was £2,840.1m and
net debt before lease liabilities* was £40.8m.
Total liquidity was £1,777m including an undrawn committed £675m Revolving
Credit Facility and the undrawn element of a committed $300m US Loan Facility
Acquisitions and Disposals
On 27 July 2024, we acquired 100% of Hibbett, Inc. for $1,077m. It is expected
that this acquisition will strengthen the Group's presence significantly
across southeastern USA. The transaction is anticipated to be accretive in the
first full year of ownership, before benefits from attractive cost synergy
opportunities that are expected to be delivered over the medium term. Annual
cost synergies are expected to be at least $25m.
Dividend
The Board recognises that the Group is cash generative and is committed to
enhancing returns to shareholders. In terms of capital allocation, our main
priorities are to invest organically in our business to drive our growth
strategy, supported by a strategic approach to mergers and acquisitions. These
strategic investments include our ongoing capital expenditure plans, recent
cash outlays such as the acquisition of Hibbett and the ongoing buyout of
smaller NCIs; and future cash outlays such as the proposed Courir acquisition
and then, further out, future payments associated with the potential buyout of
the NCI in North America.
Consequently, the Board is proposing to increase the interim dividend per
share by 10% to 0.33p (H124: 0.30p) reflecting a one-third/two-thirds split
between the interim dividend and the expected final dividend, broadly
reflecting the split of profit generated in the year.
Consolidated Statement of Financial Position
Total assets were up on the year end at £9,350.4m (FY24: £8,046.2m), due
predominantly to the acquisition of Hibbett. In terms of our assets, the
material movements in the period were cash, which decreased net of acquisition
financing received, by £206.4m to £946.3m following the Hibbett acquisition;
and inventory, which increased by £421.3m to £2,014.0m due to the
acquisition of Hibbett and the seasonal increase in inventory of £136.9m.
In terms of our liabilities, the main movement was an increase of £111.0m in
our put and call option liabilities to £920.8m as a result of the Hibbett
acquisition within the Genesis group and, therefore, the option liability
increased for the 20% share in Hibbett.
Store Portfolio
We have continued to invest in growing the JD fascia across our key markets,
while reducing the number of non-JD stores, as we pursue our JD First
strategy.
In JD, we opened 83 new JD stores. In addition, we converted 19 stores to the
JD fascia from Finish Line, ISRG and MIG. We closed 42 stores, of which 15
were JD fascia, 16 Finish Line, 10 Macy's and one Other. We opened the period
with 1,902 stores, of which 1,254 were the JD fascia (66%), and we ended the
period with 1,951 stores, of which 1,340 were the JD fascia (69%).
In Complementary Concepts, we ended the period with 1,940 stores, including
the acquisition of 984 Hibbett and 195 City Gear stores, the opening of three
DTLR stores, 13 Shoe Palace stores and one MIG store. Most closures were from
MIG, reducing the number of non-JD stores in Eastern and Central Europe as we
simplify the business, and an additional two conversions to the JD fascia.
In Sporting Goods and Outdoor, we opened 12 stores with most spread across
Cosmos and Sprinter. We closed 13 stores with the majority coming from the
Blacks fascia.
A summary of the store movements in the period is as follows: -
No. of stores Opening New stores Closures Acquisitions Transfers Closing
JD
JD UK 430 7 (7) 0 0 430
JD Europe 537 49 (7) 0 6 585
JD North America 240 24 (2) 0 13 275
Finish Line 606 2 (26) 0 (13) 569
JD Asia Pacific 89 3 0 0 0 92
Total 1,902 85 (42) 0 6 1,951
Complementary Concepts
Community 423 19 (15) 1,179 0 1,606
Complementary 372 1 (37) 0 (2) 334
Total 795 20 (52) 1,179 (2) 1,940
Other 1 0 0 0 0 1
Sporting Goods & Outdoor
Sporting Goods 376 7 (2) 0 (4) 377
Outdoor 243 5 (11) 0 0 237
Total 619 12 (13) 0 (4) 614
Group 3,317 117 (107) 1,179 0 4,506
In addition, the group has 21 JD stores operating under joint venture
agreements in Indonesia and Israel, opening two new stores within the period.
There are also two new stores operating under franchise agreements in Bahrain
and Egypt.
After opening two new gyms, closing one gym and acquiring four Simply Gym's,
the group now has 90 gyms in the UK market.
No. of stores Opening New Gyms Closures Acquisitions Closing
JD Gyms 85 2 (1) 4 90
Unaudited Condensed Consolidated Income Statement
For the 26 weeks ended 3 August 2024
26 weeks to 3 August 2024 Restated(1)
(unaudited) 26 weeks to 29 July 2023
(unaudited)
Note
Profit before adjusting Profit before adjusting
items Adjusting Profit for the period items Adjusting Profit for
£m items £m £m items the period
£m £m £m
Revenue 5,032.2 - 5,032.2 4,783.9 - 4,783.9
2
Cost of sales (2,604.2) - (2,604.2) (2,466.5) - (2,466.5)
Gross profit 2,428.0 - 2,428.0 2,317.4 - 2,317.4
Selling and distribution expenses (1,769.1) - (1,769.1) (1,685.0) - (1,685.0)
Administrative (223.4) (158.9) (382.3) (225.9) (47.9) (273.8)
expenses
3
Share of profit of equity-accounted investees 3.4 - 3.4 3.1 - 3.1
Other operating income 12.2 - 12.2 13.1 - 13.1
Operating profit 451.1 (158.9) 292.2 422.7 (47.9) 374.8
Finance income 15.1 - 15.1 16.1 - 16.1
Finance expenses (60.6) (120.4) (181.0) (41.0) 3.8 (37.2)
3
Net financial expense (45.5) (120.4) (165.9) (24.9) 3.8 (21.1)
Profit before tax 405.6 (279.3) 126.3 397.8 (44.1) 353.7
Income tax (103.9) 29.8 (74.1) (102.4) 6.2 (96.2)
expense
4
Profit for the period 301.7 (249.5) 52.2 295.4 (37.9) 257.5
Attributable to equity holders of the parent 21.8
218.4
Attributable to non-controlling interest 30.4
39.1
Basic earnings per ordinary share 5 0.42p
4.23p
Diluted earnings per ordinary share 0.42p
4.23p
(1) Please refer to Note 14 for further details of the restatements.
Consolidated Statement of Comprehensive Income
For the 26 weeks ended 3 August 2024
Restated(1) 26 weeks to
26 weeks to 29 July
3 August 2023
2024 (unaudited)
(unaudited) £m
£m
Profit for the period 52.2 257.5
Other comprehensive income:
Items that may be classified subsequently to the Consolidated Income
Statement:
Exchange differences on translation of foreign operations (35.9) (76.1)
Total other comprehensive (expense) for the period (35.9) (76.1)
Total comprehensive income for the period (net of income tax) 16.3 181.4
Attributable to equity holders of the parent (8.3) 152.5
Attributable to non-controlling interest 24.6 28.9
(1) Please refer to Note 14 for further details of the
restatements.
Unaudited Condensed Consolidated Statement of Financial Position
As at 3 August 2024
Restated(1)
As at 29 July
As at As at
2023
3 August 3 February
(unaudited)
2024 2024
£m
(unaudited) £m
£m
Non-current assets
Intangible assets 1,940.4 1,429.3 1,385.8
Property, plant and equipment 1,349.5 1,151.9 963.8
Investment properties 3.1 3.1 -
Right-of-use assets 2,623.5 2,296.6 2,208.0
Investments in associates and joint ventures 45.9 43.5 40.6
Other assets 56.0 54.3 55.4
Trade and other receivables 0.7 0.7 8.4
Deferred tax assets 38.1 23.8 32.1
Total non-current assets 6,057.2 5,003.2 4,694.1
Current assets
Inventories 2,014.0 1,592.7 1,625.1
Trade and other receivables 289.5 253.0 292.0
Income tax receivables 43.4 10.8 0.1
Cash and cash equivalents 946.3 1,152.7 1,391.1
Current assets excluding held-for-sale 3,293.2 3,009.2 3,308.3
Assets held-for-sale - 33.8 92.9
Total current assets 3,293.2 3,043.0 3,401.2
Total assets 9,350.4 8,046.2 8,095.3
Current liabilities
Interest-bearing loans and borrowings (92.6) (92.9) (82.2)
Lease liabilities (501.2) (415.9) (445.5)
Trade and other payables (1,488.8) (1,446.1) (1,439.4)
Put and call option liabilities (206.5) - (495.5)
Provisions (13.3) (7.5) (7.7)
Income tax liabilities (14.2) (25.9) (2.3)
Current liabilities excluding held-for-sale (2,316.6) (1,988.3) (2,472.6)
Liabilities held-for-sale - (8.2) (39.3)
Total current liabilities (2,316.6) (1,996.5) (2,511.9)
Non-current liabilities
Interest-bearing loans and borrowings (813.0) (36.6) (32.4)
Lease liabilities (2,373.6) (2,068.1) (1,963.1)
Other payables (139.9) (155.4) (85.7)
Put and call option liabilities (714.3) (809.8) (824.6)
Provisions (21.5) (21.7) (25.1)
Deferred tax liabilities (134.0) (89.7) (109.8)
Total non-current liabilities (4,196.3) (3,181.3) (3,040.7)
Total liabilities (6,512.9) (5,177.8) (5,552.6)
Net assets 2,837.5 2,868.4 2,542.7
Capital and reserves
Issued ordinary share capital 2.5 2.5 2.5
Share premium 467.5 467.5 467.5
Retained earnings 2,180.8 2,213.8 2,192.5
Share based payment reserve 4.2 2.9 0.5
Foreign currency translation reserve 40.7 70.8 30.9
Put and call option reserve (282.5) (301.3) (695.4)
Total equity attributable to equity holders of the parent 2,413.2 2,456.2 1,998.5
Non-controlling interest 424.3 412.2 544.2
Total equity 2,837.5 2,868.4 2,542.7
Unaudited Condensed Consolidated Statement of Changes in Equity
For the 26 weeks ended 3 August 2024
Foreign currency translation reserve Total equity attributable to equity holders of the parent
Put and call option reserve Share-based £m (unaudited) Non- controlling interest
Ordinary Share premium Retained earnings £m payment reserve £m £m Total equity
share capital £m £m £m (unaudited)
£m £m
Balance at 3 February 2024 2.5 467.5 2,213.8 (301.3) 2.9 70.8 2,456.2 412.2 2,868.4
Profit for the period - - 21.8 - - - 21.8 30.4 52.2
Other comprehensive income:
Exchange differences on translation of foreign operations - - - - - (30.1) (30.1) (5.8) (35.9)
Total other comprehensive (loss) - - - - - (30.1) (30.1) (5.8) (35.9)
Total comprehensive income for the period - - 21.8 - - (30.1) (8.3) 24.6 16.3
Dividends to equity holders - - (31.0) - - - (31.0) - (31.0)
Lapsed and disposed put options held by non- controlling interests (14.8)
- - 15.5 - - 0.7 - 0.7
Acquisition of
non-controlling interest - - (9.0) 3.3 - - (5.7) (9.2) (14.9)
Divestment of
non-controlling interest - - - - - - - (3.3) (3.3)
Share-based payment charge - - - - 1.3 - 1.3 - 1.3
Balance at 3 August 2024 2.5 467.5 2,180.8 (282.5) 4.2 40.7 2,413.2 424.3 2,837.5
Unaudited Condensed Consolidated Statement of Changes in Equity
For the 26 weeks ended 29 July 2023
Foreign currency translation reserve Total equity attributable to equity holders of the parent
Put and call option reserve Share-based £m (unaudited) Non- controlling interest
Ordinary Share premium Retained earnings £m payment reserve £m £m Total equity
share capital £m £m £m (unaudited)
£m £m
Balance at 28 January 2023 (as reported) 2.5 467.5 2,011.4 (417.9) 0.3 55.7 2,119.5 513.9 2,633.4
Effect of prior period restatement (Note 14) - - (36.8) (6.7) - 41.1 (2.4) - (2.4)
Balance at 28 January 2023 (restated(1)) 2.5 467.5 1,974.6 (424.6) 0.3 96.8 2,117.1 513.9 2,631.0
Profit for the period - - 239.9 - - - 239.9 39.1 279.0
(as reported)
Prior period restatements (Note 14) - - (21.5) - - - (21.5) - (21.5)
Profit for the period - - 218.4 - - - (218.4) 39.1 257.5
(restated(1))
Other comprehensive income:
Exchange differences on translation of foreign operations - - - - - (65.9) (65.9) (10.2) (76.1)
Total other comprehensive (loss) - - - - - (65.9) (65.9) (10.2) (76.1)
Other comprehensive income:
Total comprehensive income for the period - - 218.4 - - (65.9) 152.5 28.9 181.4
Dividends to equity holders - - (34.6) - - - (34.6) - (34.6)
Put and call options held with non-controlling interests - - - (428.8) - - (428.8) - (428.8)
Lapsed and disposed put options held by non- controlling interests - - 50.8 158.0 - - 208.8 - 208.8
(restated(1))
Acquisition of - - (16.1) - - - (16.1) 5.1 (11.0)
non-controlling interest
Divestment of - - (0.6) - - - (0.6) (1.6) (2.2)
non-controlling interest
Share-based payment charge - - - - 0.2 - 0.2 - 0.2
Balance at 29 July 2023 2.5 467.5 2,192.5 (695.4) 0.5 30.9 1,998.5 544.2 2,542.7
Unaudited Condensed Consolidated Statement of Cash Flows
For the 26 weeks ended 3 August 2024
26 weeks to 26 weeks to
3 August 29 July
2024 2023
(unaudited) (unaudited)
£m £m
Note
Net cash from operating 319.1 296.7
activities
10
Cash flows from investing activities:
Interest 15.1 16.1
received
Proceeds from sale of non-current assets 3.0 3.5
Acquisition of intangible assets (13.4) (8.1)
Acquisition of property, plant and equipment (230.7) (197.7)
Acquisition of other non-current assets (7.1) (3.3)
Drawdown of lease liabilities - 0.1 -
Cash consideration of disposals (net of cash disposed) 4.1 (61.3)
Acquisition of subsidiaries (net of cash (816.2) -
acquired)
Net cash used in investing activities (1,045.2) (250.7)
Cash flows from financing activities:
Repayment of interest-bearing loans and borrowings (44.5) (39.4)
Drawdown of interest-bearing loans and borrowings 803.8 32.8
Repayment of lease liabilities (189.1) (188.0)
Deferred consideration paid - (3.6)
Acquisition of non-controlling (24.5) (12.4)
interests
Equity dividends paid (31.0) -
Dividends paid to non-controlling interests in subsidiaries - (2.1)
Net cash used in financing activities 514.7 (212.7)
Net (decrease) in cash and cash equivalents (211.4) (166.7)
Cash and cash equivalents at the beginning of the period 1,101.6 1,548.9
Foreign exchange losses on cash and cash equivalents (10.6) (38.3)
Cash and cash equivalents at the end of the period 879.6 1,343.9
1. Basis of Preparation
General Information
JD Sports Fashion Plc (the 'Company') is a Company incorporated in the United
Kingdom and registered in England and Wales. The financial statements for the
26-week period ended 3 August 2024 represent those of the Company and its
subsidiaries (together referred to as the 'Group'). The financial statements
will be approved for issue by the Board of Directors in due course.
Basis of Preparation
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs) and IAS 34 - Interim
financial reporting; this announcement does not itself contain sufficient
information to comply with IFRSs.
These unaudited condensed consolidated interim financial statements have been
prepared in accordance with the Disclosure Guidance and Transparency Rules of
the UK Financial Conduct Authority, and with IAS 34 'Interim Financial
Reporting' under UK-adopted international accounting standards. Unless
otherwise stated, the accounting policies applied, and the judgements,
estimates and assumptions made in applying these policies, are consistent with
those used in preparing the Annual Report and Financial Statements 2024. The
financial period represents the 26 weeks ended 3 August 2024 (prior financial
period 26 weeks ended 29 July 2023, prior financial year 53 weeks ended 3
February 2024).
These condensed consolidated interim financial statements for the current
period and prior financial periods do not constitute statutory accounts as
defined in section 434 of the Companies Act 2006. A copy of the statutory
accounts for the prior financial year has been filed with the Registrar of
Companies. The auditor's report on those accounts was not qualified, did not
include a reference to any matters to which the auditor drew attention by way
of emphasis without qualifying the report and did not contain statements under
section 498 (2) or (3) of the Companies Act 2006. The Directors consider it
appropriate to adopt the going concern basis of accounting in preparing the
financial statements of the Group. In assessing the group's going concern at
HY25, we confirmed that the FY24 severe but plausible scenarios, which were
aligned to the group's risk register and, as a result, the principal risks
section of the Annual Report, were still appropriate and relevant. For HY25 we
confirmed that the scenarios run and the headroom available from the FY24
year-end analysis and calculations are materially consistent at HY25,
including the impact of the Hibbett acquisition. As at 3 August 2024 JD plc
had net cash before lease liabilities of £40.8m and total available liquidity
of £1,777m including an undrawn committed £675m Revolving Credit Facility,
and the undrawn element of a committed $300m US Loan Facility. The Directors
have, at the time of approving the condensed consolidated interim financial
statements, a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future, which reflects a
period of 12 months from the date of approval of the condensed consolidated
interim financial statements and have concluded that there are no material
uncertainties relating to going concern.
The Directors have therefore continued to adopt the going concern basis in
preparing the condensed consolidated interim financial statements.
Alternative Performance Measures
The Directors measure the performance of the Group based on a range of
financial measures, including measures not recognised by International
Accounting Standards ('IAS') in conformity with the requirements of the
Companies Act 2006. These Alternative Performance Measures may not be directly
comparable with other companies' Alternative Performance Measures and the
Directors do not intend these to be a substitute for, or superior to, IFRS
measures. The Directors believe that these Alternative Performance Measures
assist in providing additional useful information on the trading performance
of the Group.
Alternative Performance Measures are also used to enhance the comparability of
information between reporting periods, by accounting for adjusting items.
Adjusting items are disclosed separately when they are considered unusual in
nature and not reflective of the trading performance and profitability of the
Group. The separate reporting of adjusting items, which are presented as
adjusting within the relevant category in the Consolidated Income Statement,
helps provide an indication of the Group's trading performance. An explanation
as to why items have been classified as adjusting items is given in Note 3.
Further information can be found in the Alternative Performance Measures
section.
Adoption of New and Revised Standards
The following amendments became effective for the period commencing 4 February
2024. These have no significant impact on the consolidated results or
financial position.
- Amendments to IFRS 10 - Lease Liability in a Sale and
Leaseback (effective from 1 January 2024).
- Amendments to IAS 1 - Non-Current Liabilities with Covenants
(effective from 1 January 2024).
- Amendments to IFRS 7 and IAS 7 - Supplier Finance
Arrangements (effective from 1 January 2024).
- Classification of Liabilities as Current or Non-Current
(Amendments to IAS 1 (effective from 1 January 2024)
The following amendments are in issue but have yet to become effective. These
are not expected to have a significant impact on the consolidated results or
financial position.
- Amendments to IAS 21 - Lack of Exchangeability (effective
from 1 January 2025).
- Amendments to IFRS 9 Financial Instruments and IFRS 7
Financial Instruments: 'Disclosures: Classification and Measurement of
Financial Instruments' (effective from 1 January 2026)
1. Basis of Preparation (continued)
IAS 12 Income Taxes
The Group has adopted the amendments to IAS 12 which apply to income taxes
arising from tax law enacted, or substantively enacted, to implement the
Pillar Two model rules published by the Organisation for Economic Co-operation
and Development ('OECD').
The amendments include a mandatory temporary exemption of the accounting
requirement for deferred taxes under IAS 12, such that an entity neither
recognises nor discloses information regarding deferred tax assets and
liabilities in respect of Pillar Two. The Group has adopted this exemption.
Other
The Group continues to monitor the potential impact of other new standards and
interpretations which may be endorsed and require adoption by the Group in
future reporting periods. The Group does not consider that any other
standards, amendments or interpretations issued by the IASB, but not yet
applicable, will have a significant impact on the financial statements.
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
The preparation of financial statements in conformity with adopted IFRSs
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses.
The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
and estimates about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates.
Critical Accounting Judgements
The following are critical judgements, apart from those involving estimations
(which are presented separately below), that management have made in the
process of applying the Group's accounting policies and that have the most
effect on the amounts recognised in the consolidated Group financial
statements.
Adjusting Items
Management exercises significant judgement in assessing whether items should
be classified as adjusting items. This assessment covers the nature of the
item, cause of occurrence and/or scale of impact of that item on the reported
performance. In determining whether an item should be presented as adjusting
the Group considers items which are significant because of either their size
or their nature which management believes would distort an understanding of
earnings if not separately presented. In line with the majority of large,
UK-listed retail companies, the Group has extended its definition of adjusting
Items to include amortisation of acquired intangibles. This provides an
indication of the Group's trading performance in the normal course of
business.
An explanation as to why items have been classified as adjusting is given in
Note 3. Further information about metrics that the Group utilises which
exclude adjusting items can be found in the Alternative Performance Measures
section.
Key Sources of Estimation Uncertainty
The key assumptions about the future, and other key sources of estimation
uncertainty at the reporting period end, that may have a significant risk of
causing a material adjustment to the carrying amount of assets and liabilities
within the next financial year are discussed below:
Genesis Put and Call Option
Genesis Put and Call Option agreements that allow the Group's equity partners
to require the Group to purchase a non-controlling interest are recorded in
the Consolidated Balance Sheet initially at the present value of the
redemption amount, in accordance with IAS 32 Financial Instruments:
Presentation. On initial recognition, the corresponding amount is recognised
against the put and call option reserve. Changes in the measurement of the
financial liability due to the unwinding of the discount or changes in the
amount that the Group could be required to pay are recognised in the
Consolidated Income Statement. If the contract expires without delivery, the
carrying amount of the financial liability is reclassified to equity,
otherwise the financial liability is derecognised for the amount settled.
The significant option outstanding as at 3 August 2024 relates to the Genesis
Topco Inc ("Genesis"), which holds the Group's North American business. The
Genesis put and call liability at 3 August 2024 was £890.2m (2023 (restated):
£767.2m).
The Group uses a third-party valuation expert to independently determine the
present value of the exercise price of the Genesis put and call options. The
approach uses a Monte-Carlo simulation model applying a geometric Brownian
motion to project the share price and an arithmetic Brownian motion for the
projection of EBITDA forecasts. See Note 8 for the full accounting policy.
The critical estimate used for the calculation used to value the put and call
option liability is the EBITDA forecasts and growth assumptions for future
period used. Further information about the sensitivities used can be found in
Note 8.
1. Basis of Preparation (continued)
Accounting Policies
Supplier Rebates
Supplier rebates include promotion cost contributions and marketing initiative
support and are recognised in the Consolidated Financial Statements when they
are contractually agreed with the supplier and can be reliably measured. Such
rebates typically relate to the launch of such initiatives and therefore
rebate income is typically recognised across the period in which launch costs
are recognised.
Contributions towards store fixtures are recognised as a credit within the
Consolidated Income Statement within the period in which they are received.
Other rebates are agreed with suppliers retrospectively once specific targets
have been achieved and recognised after the end of the relevant supplier's
financial year.
Segmental Analysis
As announced in the Group's FY24 Trading Update on 28 March 2024, the current
interim period to 3 August 2024 has been presented under the new segmentation
used for reporting. The appointment of Regis Shultz as CEO on 2 August 2022
and subsequent announcement of a refinement in strategy at the Capital Markets
Day on 2 February 2023 has resulted in a change in focus with respect to JD
fascia's, territories and vision for the Group over the next five years. This
has continued to lead to various changes in, organisation structure, internal
reporting, business review and resource allocation over the 2023-2024 period
including the appointment of a new CFO in May 2023 (joining in October 2023).
Consequently, a new reporting structure has been derived in order to provide
the Chief operating decisions maker ("CODM") the information required to
deliver the renewed strategy for the Group. The internal reporting changed at
the beginning of FY25, and therefore this was the trigger event to change the
operating segments.
Adjusting items
In line with the majority of large, UK-listed retail companies, the Group has
extended its definition of adjusting Items to include amortisation of acquired
intangibles. This more appropriately represents the underlying trading
performance of the Group. There has been a restatement of the prior year
comparatives to charge £24.6m to adjusting items. See Note 3.
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 'CODM' ('Chief Operating Decision Maker') to allocate
resources to the segments and to assess their performance. The CODM is
considered to be the Chief Executive Officer of JD Sports Fashion Plc.
Information reported to the CODM is focused on the nature of the businesses
within the Group. The Group's reportable segments under IFRS 8 are JD,
Complementary Concepts and Sporting Goods and Outdoors. In accordance with
IFRS 8.12, we have aggregated several operating segments with similar economic
characteristics into each reporting segment and concluded that, in doing so,
the aggregation is still consistent with the core principles of IFRS 8.
When aggregating the operating segments into each reporting segment, we have
primarily taken into consideration:
- IFRS 8.12.a the nature of products or services
- IFRS 8.12.c the type or class of customer
- IFRS 8.12.d the methods used to distribute their products.
The CODM receives and reviews segmental operating profit. Certain central
administrative costs including Group Directors' salaries are included within
the Group's JD result. This is consistent with the results as reported to the
CODM. IFRS 8 requires disclosure of information regarding revenue from major
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 customers is not appropriate.
Information regarding the Group's reportable segments for the 26 weeks to 3
August 2024 is shown below:
JD Complementary Concepts Sporting Goods and Outdoors Other Total
Income statement £m £m £m £m (unaudited)
£m
Revenue 3,572.7 714.8 710.3 34.4 5,032.2
Gross margin 49.5% 46.4% 43.8% 45.9% 48.2%
Operating profit before adjusting items 318.2 98.4 30.0 4.5 451.1
Adjusting items within administrative expenses (118.9) (35.2) (4.8) - (158.9)
Operating profit 199.3 63.2 25.2 4.5 292.2
Net Finance expense (29.6) (7.4) (8.4) (0.1) (45.5)
Adjusting items within financial expenses (120.4) - - - (120.4)
Profit before tax 49.3 55.8 16.8 4.4 126.3
Income tax expense (74.1)
Profit for the period 52.2
Total assets and liabilities JD Complementary Concepts Sporting Goods Other Total
£m £m and Outdoors £m (unaudited)
£m £m
Total assets 5,852.0 2,156.0 1,300.8 41.6 9,350.4
Total liabilities (4,662.4) (815.1) (1,022.9) (12.5) (6,512.9)
Total segment net assets 1,189.6 1,340.9 277.9 29.1 2,837.5
JD Complementary Concepts Other Total
Other segment information £m £m £m (unaudited)
Sporting Goods and Outdoors £m
£m
Capital expenditure:
Intangible assets (software development) 13.1 - 0.3 - 13.4
Property, plant and equipment 193.5 26.9 10.3 - 230.7
Other non-current assets 2.6 - 4.5 - 7.1
Total 209.2 26.9 15.1 - 251.2
Depreciation, amortisation and impairments:
Amortisation of intangible assets 27.3 12.1 4.9 - 44.3
Depreciation of property, plant and equipment 72.3 12.7 14.7 0.2 99.9
Impairment of non-current assets (adjusting items) 95.6 - - - 95.6
Total 404.4 51.7 34.7 0.2 491.0
2. Segmental Analysis (continued)
Information regarding the Group's reportable segments for the 26 weeks to 29
July 2023 is shown below:
JD Complementary Sporting Goods and Outdoors Total
Income statement £m Concepts £m Other (unaudited)
£m £m £m
Revenue 3,336.6 636.6 743.9 66.8 4,783.9
Gross margin 49.5% 47.5% 44.6% 44.9% 48.4%
Operating profit before adjusting items 305.5 86.3 24.5 6.4 422.7
Adjusting items within administrative expenses (28.0) (13.6) (6.0) (0.3) (47.9)
Operating profit 277.5 72.7 18.5 6.1 374.8
Net Finance expense (10.9) (7.6) (5.9) (0.5) (24.9)
Adjusting items within financial expenses 3.8 - - - 3.8
Profit before tax 270.4 65.1 12.6 5.6 353.7
Income tax expense - - - - (96.2)
Profit for the period - - - - 257.5
Complementary Sporting Goods Total
Total assets and liabilities JD Concepts and Outdoors Other (unaudited)
£m £m £m £m £m
Total assets 5,304.2 1,394.6 1,363.0 33.5 8,095.3
Total liabilities (4,245.7) (456.5) (839.7) (10.7) (5,552.6)
Total segment net assets 1,058.5 938.1 523.3 22.8 2,542.7
JD Complementary Concepts Sporting Goods Other Total
Other segment information £m £m and Outdoors £m (unaudited)
£m £m
Capital expenditure:
Intangible assets (software development) 7.7 0.2 0.2 - 8.1
Property, plant and equipment 172.7 11.1 13.4 0.5 197.7
Other non-current assets 3.3 - - - 3.3
Total 183.7 11.3 13.6 0.5 209.1
Depreciation, amortisation and impairments:
Amortisation of intangible assets 18.9 12.1 4.9 - 35.9
Depreciation of property, plant and equipment 62.4 11.0 13.6 0.6 87.6
Impairment of non-current assets (adjusting items) - - - 7.9 7.9
Impairment of non-current assets (non-adjusting items) - - - 1.7 1.7
Total 265.0 34.4 32.1 10.7 342.2
2. Segmental Analysis (continued)
Geographical Information
The Group's operations are located in the UK, Andorra, Australia, Austria,
Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Croatia, Cyprus, Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong,
Hungary, India, Indonesia, Israel, Italy, Latvia, Lithuania, Malaysia, the
Netherlands, New Zealand, Poland, Portugal, the Republic of Ireland ('ROI'),
Romania, Serbia, Singapore, Slovakia, Slovenia, Spain and the Canary Islands,
Sweden, Thailand, and the US.
The following table provides analysis of the Group's revenue by geographical
market, irrespective of the origin of the goods/services.
26 weeks to 26 weeks to
3 August 2024 29 July 2023
Revenue (unaudited) (unaudited)
£m £m
UK 1,498.7 1,525.9
Europe 1,547.1 1,482.0
North America 1,753.8 1,520.4
Asia Pacific 232.6 255.6
5,032.2 4,783.9
The revenue from any individual country, with the exception of the UK, US and
Spain, is not more than 10% of the Group's total revenue.
Revenue by channel
26 weeks to 26 weeks to
3 August 2024 29 July 2023
Revenue (unaudited) (unaudited)
£m £m
Retail stores 3,924.9 3,591.5
Online 1,043.8 1,059.6
Other ((1)) 63.5 132.8
5,032.2 4,783.9
(1) Other relates to revenue from leisure club memberships,
wholesale and commission sales.
Revenue by product type
26 weeks to 26 weeks to
3 August 2024 3 July 2023
Revenue (unaudited) (unaudited)
£m £m
Footwear 3,008.6 2,743.9
Apparel 1,501.3 1,490.2
Accessories 295.6 298.9
Other (2) 226.7 250.9
5,032.2 4,783.9
(2) Other relates to revenue from sales of outdoor living
equipment, delivery income and revenue from leisure club memberships.
The following is an analysis of the carrying amount of segmental non-current
assets by the geographical area in which the assets are located:
26 weeks ended
3 August 2024 53 weeks ended 26 weeks ended
Non-current assets (unaudited) 3 February 2024 29 July 2023
£m (unaudited) (unaudited)
£m £m
UK 1,158.8 1,254.1 1,208.8
Europe 1,867.2 1,702.5 1,538.5
North America 2,880.9 1,901.7 1,672.1
Asia Pacific 150.3 144.9 96.7
6,057.2 5,003.2 4,516.1
3. Adjusting Items
The Group exercises judgement in assessing whether items should be classified
as adjusting items. This assessment covers the nature of the item, cause of
occurrence and scale of impact of that item on the reported performance. In
determining whether an item should be presented as adjusted items, the Group
considers items which are significant because of either their size or their
nature. In order for an item to be presented as adjusted items, it should
typically meet at least one of the following criteria:
- Impairments of tangible and intangible assets, investments and
loan receivables not recoverable
- Unusual in nature or outside the normal course of business
(for example, the non-cash movement in the present value of put and call
options)
- Items directly incurred as a result of either an acquisition,
including amortisation of acquired intangibles; a divestment, or a major
business change or restructuring programme.
The separate reporting of items, which are presented as adjusting items within
the relevant category in the Consolidated Income Statement, helps provide an
indication of the Group's trading performance in the normal course of
business. The tax impact of these adjusting items is a tax credit of £29.8m
(HY24: £6.2m) as shown on the face of the Consolidated Income Statement.
Restated((1))
26 weeks to 26 weeks to
3 August 29 July
2024 2023
(unaudited) (unaudited)
£m £m
Note
Impairments of tangible and intangible assets and investments:
Impairments of tangible and intangible assets and investments (2) 101.6 7.9
Items as a result of acquisitions, divestments, major business changes or
restructuring:
Divestment and restructuring (3) 12.7 15.4
Acquisition-related costs (4) 22.1 -
Amortisation of acquired intangibles (5) 22.5 24.6
Administrative expenses - Adjusting items 158.9 47.9
Items that are unusual in nature or outside the normal course of business:
Movement in present value of put and call options 120.4 (3.8)
(6)
8
Finance expenses - Adjusting items 120.4 (3.8)
Adjusting items 279.3 44.1
(1) Please refer to Note 14 for further details of the
restatement.
(2) The impairment of tangible and intangible assets and
investments in the current period relates to the impairment of fascia name and
assets arising on the acquisition of Swim! (£13.3m) and fixed assets in
relation to closure of group distribution centres (£88.3m).
(3) The Group incurred £12.7m of loss on divestments and
restructuring of group companies.
(4) Acquisition-related costs of £22.1m are in respect of the
Courir and Hibbett acquisitions, of which Courir remains subject to clearance
by the European Commission and, as at the date of this report, has not been
concluded.
(5) In the current period, we have reclassified amortisation on
acquired intangibles to adjusting items, as per disclosed in the FY24 Annual
Report.
(6) The £120.4m debit in the present value of the put and call
options reflects changes in the present value of the future buyouts of NCIs
and comprises primarily Genesis Topco Inc (£126.7m charge) and DTLR (£6.3m
credit). The credit on Genesis is driven by the acquisition of Hibbett, which
has been brought into the Genesis group. In addition, there was a credit of
£6.3m in relation to the DTLR option, which was revalued prior to the
acquisition of the non-controlling interest.
4. Tax Expense
The total tax charge included in the Consolidated Income Statement consists of
current and deferred tax.
Current Income Tax
Current tax is the expected tax payable on taxable income for the financial
period, using the applicable enacted tax rates in each relevant jurisdiction.
Tax expense is recognised in the Consolidated Income Statement except to the
extent it relates to items recognised in the Consolidated Statement of
Comprehensive Income or directly in the Consolidated Statement of Changes in
Equity, in which case it is recognised in the relevant statement,
respectively.
Restated((1))
26 weeks to 26 weeks to
3 August 29 July
2024 2023
(unaudited) (unaudited)
£m £m
Current tax
UK corporation tax at 25.0%/24.0% 98.2 94.0
Adjustment relating to prior periods (0.6) -
Total current tax charge 97.6 94.0
Deferred tax
Deferred tax (origination and reversal of temporary differences) (23.5) 2.0
Adjustment relating to prior periods - 0.2
Total deferred tax (credit)/charge (23.5) 2.2
Income tax expense 74.1 96.2
5. Earnings per Ordinary Share
Basic and Adjusted Earnings per Ordinary Share
The calculation of basic earnings per ordinary share at 3 August 2024 is based
on the profit for the period attributable to equity holders of the parent of
£21.8m (HY24: £218.4m restated ((1))) and a weighted average number of
ordinary shares outstanding during the 26 week period ended 3 August 2024 of
5,183,135,745 (HY24: 5,158,497,877).
There have been no other transactions involving ordinary shares or potential
ordinary shares in the period or since the period end date and the date of
signing of these financial statements.
Adjusted basic 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 adjusting items. The Directors
consider that this gives a more useful measure of the trading performance and
profitability of the Group.
Restated((1))
26 weeks to 26 weeks to
3 August 29 July
2024 2023
(unaudited) (unaudited)
£m £m
Profit for the period attributable to equity holders of the parent 21.8 218.4
Adjusting items attributable to equity holders of the 274.7 41.0
parent
Tax relating to adjusting items (29.5) (5.2)
Profit for the period attributable to equity holders of the parent excluding 267.0 254.2
adjusting items
millions millions
Weighted average number of ordinary shares at end of the period (basic) 5,183.1 5,158.5
Dilution - Effect of potentially dilutive share options and awards 0.7 -
Weighted average number of ordinary shares at the end of the period (diluted) 5,158.9 5,158.6
Basic earnings per ordinary share 0.42p 4.23p
Diluted earnings per ordinary share 0.42p 4.23p
Adjusted basic earnings per ordinary share 5.15p 4.93p
Adjusted diluted earnings per ordinary share 5.15p 4.93p
(1) Please refer to Note 14 for further details of the
restatement.
6. Acquisitions
Business
Combinations
The Group accounts for business combinations using the acquisition method when
control is transferred to the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect the returns through its power over the
entity.
Costs related to the acquisition, other than those associated with the issue
of debt or equity securities, that the Group incurs in connection with a
business combination are expensed as incurred.
The consideration transferred in the acquisition is measured at fair value, as
are the identifiable net assets acquired. Any goodwill that arises is tested
annually for impairment; however, any resulting impairment will not be tax
deductible. The consideration transferred does not include amounts related to
the settlement of pre-existing relationships. Such amounts are generally
recognised in the Consolidated Income Statement.
The valuation techniques used for measuring the fair value of material assets
and liabilities acquired are as follows:
- Intangible assets (fascia names) - The relief from royalty
method considers the discounted estimated royalty payments that are expected
to be avoided as a result of the intangible assets being owned.
- Inventories - The fair value is determined based on the
estimated selling price in the ordinary course of business less the estimated
costs of completion and sale, and a reasonable profit margin based on the
effort required to sell the inventories.
- Leases - A right-of-use asset and lease liability are
recognised and measured as if the acquired lease were a new lease at the date
of acquisition. The lease liability is measured at the present value of the
remaining lease payments, using a discount rate determined in accordance with
IFRS 16 at the date of acquisition. The right-of-use asset is measured at an
amount equal to the recognised liability adjusted to reflect the favourable or
unfavourable terms of the lease, relative to market terms.
- Owned property - The cost approach considers the cost to
replace the existing property, less physical depreciation, plus the fair value
of the land. The value of the properties is derived by adding the estimated
value of the land to the cost of constructing a reproduction or replacement
for the improvements and then subtracting the amount of depreciation.
- Property, plant and equipment - These assets are valued at
the depreciated reproduction cost giving consideration to functional and
economic obsolescence. Where applicable, the remaining lease terms associated
with each store or location were considered.
- Assembled workforce - In accordance with IAS 38, the
assembled workforce is not recognised as a separate intangible asset but is
subsumed within goodwill. The assembled workforce is valued using the
replacement cost method, which estimates the costs the acquirer would pay to
replace the fully trained and capable workforce. The acquirer would not have
to incur cost associated with recruiting and training the employees.
6. Acquisitions (continued)
Current Period Acquisitions
Acquisition of Hibbett, Inc. (100%)
On 25 July 2024, the Group acquired, via its existing subsidiary Genesis
Holdings, Inc., 100% of the issued share capital of Hibbett, Inc. ('Hibbett')
for total cash consideration of $1,076.9m (£836.1m).
Headquartered in Birmingham, Alabama, Hibbett is a leading sports
fashion-inspired retailer with 1,179 stores, as of 25 July 2024, located in
communities in 36 states across the US. Hibbett has been serving customers for
more than 75 years with convenient locations, personalised customer service
and access to leading brands such as Nike, Adidas and Jordan across footwear,
apparel and accessories. The acquisition expands on the Group's presence in
the US market.
As part of the acquisition method of accounting, the assets and liabilities of
Hibbett have been converted from US generally accepted accounting principles
(GAAP) to IFRS Accounting Standards. There are no adjustments which are
considered material for the Group, the most significant adjustment relates to
the capitalisation of cloud computing costs, resulting in a reduction in the
value of total assets amounting to £8.1m.
The table below sets out the identifiable net assets attributable to the
acquisition of Hibbett as of the acquisition date and includes the effects of
adjustments on the acquisition date balance sheet made during the measurement
period and detailed below.
Provisional fair value at
25 July
Measurement 2024
Book Value adjustments £m
£m £m
Acquiree's net assets at acquisition date:
Non-Current Assets
Intangible assets 26.2 152.5 178.7
Property, plant and equipment 146.4 36.4 182.8
Right of Use Assets, net 221.0 8.8 229.8
Other Assets 3.1 - 3.1
Current Assets
Inventories 292.7 (1.6) 291.1
Cash and cash equivalents 24.0 - 24.0
Trade and other receivables 15.0 (7.4) 7.6
Prepaid and Others 16.7 (2.8) 13.9
Refundable Income Tax 9.3 - 9.3
Deferred Tax Asset 4.5 (4.5) -
Current Liabilities
Trade and other payables - current (177.4) - (177.4)
Current Lease Liability (61.1) (0.4) (61.5)
Non-Current Liabilities
Trade and other payables - non-current (1.7) - (1.7)
Non-Current Lease Liability (195.2) 20.7 (174.5)
Deferred Tax Liability (3.7) (50.8) (54.5)
Net identifiable assets 319.8 150.9 470.7
Goodwill on acquisition 365.4
Total consideration 836.1
The excess of consideration paid over the fair value of the net assets on
acquisition of £365.4m represents goodwill that reflects the market position
of the business, the assembled workforce, the potential future growth
opportunities from existing and new retail stores, and cost synergies across
our North American businesses. The goodwill is not deductible for tax purposes
at the consolidated level.
6. Acquisitions (continued)
Measurement adjustments
Additional intangible assets of £152.5m have been recorded in relation to the
acquisition; and within this is £156.4m representing the fair value of fascia
names. Deferred tax liabilities of £50.8m have been recognised in relation to
intangible assets. Further fair value adjustments of £45.3m have been made to
the acquisition date balance sheet of Hibbett. This amount includes a £36.4m
increase in the value of property, plant and equipment and a £1.6m reduction
in the value of inventory.
In addition, as noted above, lease liabilities have been remeasured as if the
acquired leases were a new lease at the acquisition date resulting in a
decrease in the lease liability (current and non-current) of £20.3m. This
decrease in the liability arises due to i) the application of a discount rate
determined in accordance with IFRS 16 at the acquisition date and ii)
alignment with the Group's accounting policy whereby non-lease service
components are charged to the Consolidated Income Statement. Under its
previous US GAAP accounting policy, Hibbett elected to combine non-lease
service components with a lease component and account for them as part of its
fixed asset payments thus including them in the measurement of the lease
liability.
The associated right of use asset is remeasured on acquisition at an amount
equal to the recognised lease liability and then adjusted to reflect the
favourable or unfavourable terms of the lease, relative to market terms.
The measurement difference in relation to prepayments and other assets
reflects a difference in the accounting treatment of capitalised software
development costs between the accounting policies of the Group and those
policies previously applied by Hibbett under US GAAP. Under US GAAP, Hibbett
capitalised certain costs relating to the configuration of cloud computing
arrangements. Under the Group's accounting policy, directly attributable
software development costs in relation to the configuration and customisation
of cloud computing arrangements are only capitalised to the extent they give
rise to an asset controlled by the Group. The Group has conducted an
assessment and identified £9.4m of costs, capitalised as intangible assets
and prepayments under US GAAP at the date of acquisition, which would not be
capitalised under IFRS. As a result, an adjustment has been made to the
opening balance sheet to reduce prepayments by £1.6m and intangible assets by
£7.8m with a corresponding increase to goodwill.
The trade and other receivables acquired, post measurement adjustments of
£7.6m, net of provision, are expected to be recovered in full. The gross
trade and other receivables acquired amounted to £7.9m.
Currently all balances remain provisional and will be finalised in the next
accounting period. These balances remain provisional due to outstanding
relevant information regarding facts and circumstances that existed as of the
acquisition date and/or where valuation work is still being finalised. This
is due to the proximity of the completion date of the acquisition and issuing
of the condensed consolidated interim financial statements. This includes
finalisation of the impact of the measurement differences between the US GAAP
accounting policies applied by Hibbett and the accounting policies of the
Group in relation to the acquired lease portfolio.
Included in the 26 week period ended August 3, 2024, was revenue of £61.3m
and a profit before tax and adjusting items of £13m in respect of Hibbett.
Acquisition costs amounting to £15.8m related to the acquisition of Hibbett
by the Group have been recognised within adjusting items in the Consolidated
Income Statement.
Current Period Acquisitions - Acquisition of Non-Controlling Interests
Acquisition of the Non-Controlling Interest in Sport Zone Canaries (40%) and
JD Canaries (10%)
On 8 April 2024, JD Spain Sports Fashion 2010 SL acquired the 10% minority
shareholding in JD Canary Islands Sports SL, ('JD Canary') and SDSR - Sports
Division SR, S.A. ('Sport Zone Portugal') acquired the 40% minority
shareholding in Sport Zone Canarias (SL). Total consideration for both
shareholdings was €19.9m. The JD Canary acquisition aligns with the JD Brand
First strategy, whilst the Sport Zone Portugal acquisition promotes the JD
Complementary Concepts.
Acquisition of the Non-Controlling Interest in DTLR Villa LLC (1.155%)
On 15 July 2024, JD acquired 1.018% of the remaining 1.155% issued share
capital in its existing subsidiary DTLR Villa LLC for cash consideration of
$8.5m. On 19 July 2024 JD acquired the remaining 0.137% issued share capital
of DTLR Villa LLC for cash consideration of $1.1m. The Group now owns 100% of
the issued share capital of DTLR Villa LLC. In accordance with IFRS 10, the
Group had previously assessed and concluded that it controlled the subsidiary.
As the step-up acquisition in July 2024 does not result in a change of
control, this has been accounted for as an equity transaction.
Other Current Period Acquisitions
Acquisition of the Trade and Assets of Simply Gyms
On 18 March 2024, JD Gyms acquired the trade and assets of four 'Simply Gym'
sites from Bay Leisure Limited for £3.4 million (of which £0.7 million was
deferred). The sites will be converted to JD Gyms under a phased conversion
programme.
6. Acquisitions (continued)
Prior Period Acquisitions - Acquisition of Non-Controlling Interests
JD Sports Fashion Germany GmbH
On 25 April 2023, JD Sports Fashion Plc ('JD') acquired the remaining 20% of
the issued share capital in its existing subsidiary JD Sports Fashion Germany
GmBH ('JD Germany') for a cash consideration of €7.2m (£6.1m). The Group
now owns 100% of the issued share capital of JD Germany. In accordance with
IFRS 10, the Group had previously assessed and concluded that it controlled
the subsidiary. As the step-up acquisition on 25 April 2023 does not result in
a change of control, this has been accounted for as an equity transaction.
JD Sports Fashion SDN BDH
On 30 August 2023, JD acquired the remaining 20% of the issued share capital
in its existing subsidiary JD Sports Fashion SDN BDH ('JD Malaysia') for a
cash consideration of 195.5m MYR (£35.5m). The Group now owns 100% of the
issued share capital of JD Malaysia. In accordance with IFRS 10, the Group had
previously assessed and concluded that it controlled the subsidiary. As the
acquisition on 30 August 2023 does not result in a change of control, this has
been accounted for as an equity transaction.
Iberian Sports Retail Group S.L.
On 10 October 2023, JD acquired the remaining 49.99% of the issued share
capital in its existing subsidiary Iberian Sports Retail Group S.L. ('ISRG')
for a cash consideration of €500.1m (£434.6m). At the date of the step-up
acquisition the Group held a put and call option liability recognised in the
period on the remaining 49.99% which carried a value of £428.8m. The Group
now owns 100% of the issued share capital of ISRG. In accordance with IFRS 10,
the Group had previously assessed and concluded that it controlled the
subsidiary. As the acquisition on 10 October 2023 does not result in a change
of control, this has been accounted for as an equity transaction.
Marketing Investment Group S.A.
On 21 December 2023, JD acquired the remaining 40% of the issued share capital
in its existing subsidiary Marketing Investment Group S. A. ('MIG') for a cash
consideration of 343.2m PLN (£68.7m). At the date of the step-up acquisition
the Group held a put and call option liability on the remaining 40% which
carried a value of £66.7m. The Group now owns 100% of the issued share
capital of MIG. In accordance with IFRS 10, the Group had previously assessed
and concluded that it controlled the subsidiary. As the step-up acquisition on
21 December 2023 does not result in a change of control, this has been
accounted for as an equity transaction.
Other Acquisitions of Non-Controlling Interest
During the period ended 3 February 2024, the group made four other
acquisitions of non-controlling interests which were not material for a cash
consideration of £6.9m.
Other Acquisition related activities
At FY24 the Mainline menswear fashion business was classified as held for
sale, due to the Group actively looking to sell the business. However, since
the year end the Group proposed to buy out the non-controlling interest and so
the business has not been classified as held for sale at HY25. Subsequent to
the HY25 period end the Group has agreed to buy out the non-controlling
interest, see Note 13 for post balance sheet event disclosure.
7. Divestments
Current Period - Non-Significant Divestments
On 28 July 2024, the Group disposed of Gym King Limited (40% equity interest)
a fixed asset investment in a joint venture for cash consideration of £2.0
million.
On 7 March 2024, the Group disposed of Bodytone Limited (50.1% equity
interest) for cash consideration of €2.4m.
8. Put and Call Option Liabilities
Put and call options are in place over all or part of the remaining
non-controlling interest shareholding in various subsidiaries. The Group
recognises put and call options over non-controlling interests in its
subsidiary undertakings as a liability in the Consolidated Statement of
Financial Position at the present value of the estimated exercise price of the
put and call options. The only material put and call option remaining at 3
August 2024 is Genesis at £890.2m (HY24: Genesis (restated) £767.2m, MIG
£66.7m, ISRG (restated) £434.6m).
The Group has used a third-party valuation expert to estimate the present
value of the Group's material put and call option liabilities (Genesis) using
a Monte-Carlo simulation model, applying a geometric Brownian motion to
project the share price and an arithmetic Brownian motion for the projection
of EBITDA. The option formula and multiple are usually stated in the option
agreement, allowing the strike price to be calculated from the simulated
EBITDA; however, in the absence of a specified formula or multiple, the Group
estimates this based on current evidence in the Mergers and Acquisitions
market and the Group's past experience of multiples paid for similar
businesses. Upon initial recognition of put and call options, a corresponding
entry is made to Other Equity (put and call option reserve), and for
subsequent changes on remeasurement of the liability the corresponding entry
is made to adjusting items in the Consolidated Income Statement.
Inputs to the Monte-Carlo simulation models
The Group used the Board approved 3-year plan to estimate profit and cash flow
forecasts for future periods, and for the Hibbett business has used a draft
business plan prepared for the Board.
In estimating the present value of the Group's material put and call option
liabilities, the key inputs to the Monte-Carlo simulation models are: -
- The EBITDA forecasts and growth assumptions for future
periods, including forecast net cash/debt and forecast capital expenditure,
working capital movements and taxation.
- The EBITDA, which is projected using an Arithmetic Brownian
Motion using EBITDA drift. The drift for each time period is estimated from
forecast EBITDA and its standard deviation is estimated from historical EBITDA
data.
- The risk-free discount rates, reflecting the current market
assessment of the time value of money, used to discount the purchase price
(subject to the option pricing cap as defined in the shareholder agreement) to
the present value.
8. Put and Call Option Liabilities (continued)
Other options
Within Other Options the largest value option is Cosmos £23.7m (HY24
(restated): £17.9m). Due to there being no trigger events impacting the other
options, no valuation adjustments have been made, with the exception of the
DTLR option which was revalued to fair value prior to the buyout in July 2024.
The remaining options are valued in house, and total £6.9m (HY24 (restated):
£33.7m).
Iberian Sports Retail Group
('ISRG') Genesis Topco Inc Marketing Total Liability
Investment Group
£m ('Genesis')
Other (unaudited)
S.A. ('MIG')
£m
£m £m
£m
At 28 January 2023 138.6 801.1 52.4 69.1 1,061.2
Effect of prior period restatement 67.8 (18.2) - (6.1) 43.5
At 28 January 2023 - restated(1) 206.4 782.9 52.4 63.0 1,104.7
Acquisitions - restated(1) 428.8 - - - 428.8
Options lapsed and disposed during the period (196.7) - - (8.8) (205.5)
Increase/(decrease) in the present value of the existing option liability -
restated(1)
(3.9) (15.7) 14.3 (2.6) (7.9)
At 29 July 2023 - restated((1)) 434.6 767.2 66.7 51.6 1,320.1
Iberian Sports Retail Group
('ISRG') Genesis Topco Inc Marketing Total Liability
Investment Group
£m ('Genesis')
Other (unaudited)
S.A. ('MIG')
£m
£m £m
£m
At 3 February 2024 - 763.5 - 46.3 809.8
Options lapsed and disposed during the period - - - (1.9) (1.9)
Options bought out - - - (7.5) (7.5)
Increase/(decrease) in the present value of the existing option liability - 126.7 -
(6.3) 120.4
At 3 August 2024 - 890.2 - 30.6 920.8
(1) Please refer to Note 14 for further details of the
restatement.
9. Dividends
Dividend distribution to the Company's shareholders is recognised as a
liability in the Group Financial Statements in the period in which it is
approved.
After the reporting date, the following dividend was proposed by the Directors
and will be payable to all shareholders on the register at 8 November 2024.
The dividends were not provided for at the reporting date.
Dividends on Issued Ordinary Share Capital
26 weeks to 26 weeks to
3 August 2024 29 July 2023
(unaudited) (unaudited)
£m £m
Final dividend of 0.6 pence (2024: 0.67 pence) per qualifying ordinary share 31.1 34.6
paid in respect of prior period, but not recognised as a liability in that
period
Interim dividend declared but not paid in respect of the period of 0.33 pence 17.1 15.5
(2024: 0.30 pence) per qualifying ordinary share paid in respect of current
period
48.2 50.1
10. Reconciliation of Profit After Taxation to Cash Flows from Operating
Activities
26 weeks to 26 weeks to
3 August 2024 29 July 2023
(unaudited) (unaudited)
£m £m
Cash flows from operating activities
Profit for the period 52.2 257.5
Adjustments for:
Income tax expense (non-adjusting) 74.1 96.2
Finance expenses (non-adjusting) 60.6 41.0
Finance expenses (adjusting) 120.4 (3.8)
Finance income (15.1) (16.1)
Depreciation and amortisation of non-current assets 324.4 291.9
(non-adjusting)
Depreciation and amortisation of non-current assets (adjusting) 22.5 24.6
Foreign exchange gains on monetary assets and liabilities - (2.3)
Share based payment charge 1.3 -
(Profit)/Loss on disposal of non-current assets (3.0) 2.5
Impairment of other intangibles and non-current assets - 1.7
(non-adjusting)
Impairment of goodwill and fascia names (adjusting) 1.3 7.9
Impairment of other intangibles and non-current assets (adjusting) 94.3 -
Other non-cash adjusting items 19.7 15.4
Forward contract 0.9 (1.3)
Share of profit of equity-accounted investees (net of tax) (3.4) (3.1)
Operating cashflow before working capital changes 750.2 712.1
Increase in inventories (136.9) (213.1)
Increase in trade and other receivables (30.0) (43.8)
Decrease in trade and other payables (71.5) (8.1)
Cash generated from operations 511.8 447.1
Interest (10.9) (4.2)
paid
Lease interest paid (49.4) (36.8)
Income taxes paid (132.4) (109.4)
Net cash from operating activities 319.1 296.7
11. Analysis of Net Debt
Net debt consists of cash and cash equivalents together with other borrowings
from bank loans and overdrafts, other loans, loan notes, lease liabilities and
other similar hire purchase contracts:
53 weeks ended On acquisition/ disposal of subsidiaries Non-cash Movements IFRS 16 Additions and Remeasurement Adjustments 26 weeks ended Restated((1))
3 February £m Cash flow £m £m £m 3 August 26 weeks ended
2024 2024 29 July
£m (unaudited) 2023
FX Movements £m (unaudited)
£m £m
Cash and cash equivalents 1,152.7 24.0 (230.4) (8.8) 8.8 - 946.3 1,391.1
Overdrafts (59.9) - (5.0) (1.8) - - (66.7) (47.2)
Cash and cash equivalents held-for-sale 8.8 - - - (8.8) - - -
Cash and cash equivalents for the purposes of the Consolidated Statement of 1,101.6 24.0 (235.4) (10.6) - - 879.6 1,343.9
Cash Flows
Bank loans (69.6) (28.7) (760.4) 19.9 - - (838.8) (67.4)
Net cash before lease liabilities 1,032.0 (4.7) (995.8) 9.3 - - 40.8 1,276.5
Lease liabilities (2,484.0) (236.0) 189.1 6.1 - (356.1) (2,880.9) (2,407.9)
Total liabilities from financing activities (2,553.6) (264.7) (571.3) 26.0 - (356.1) (3,719.7) (2,475.3)
Net debt (1,452.0) (240.7) (806.7) 15.4 - (356.1) (2,840.1) (1,131.5)
12. Contingent Liabilities
The activities of the Group are overseen by a number of regulators around the
world and, whilst the Group strives to ensure full compliance with all its
regulatory obligations, periodic reviews are inevitable which may result in a
financial penalty. If the risk of a financial penalty arising from one of
these reviews is more than remote but not probable or cannot be measured
reliably then the Group will disclose this matter as a contingent liability.
If the risk of a financial penalty is considered probable and can be measured
reliably then the Group would make a provision for this matter.
13. Post Balance Sheet Events - Divestments
Acquisition of the 20% Non-Controlling Interest in Mainline Menswear
On 27 September 2024, JD Sports Fashion plc acquired the 20% non-controlling
interest in Mainline Menswear Holdings Limited. The consideration paid was
£8.5m with additional deferred consideration payable in 2026 subject to the
achievement of performance conditions. The Group now owns 100% of Mainline
Menswear Holdings Limited and its subsidiary.
14. Prior Period Adjustments
In completing its FY23 year end, the Group identified a number of prior period
adjustments, impacting the opening position at 28 January 2023 and the period
ended 29 July 2023. The impact of the prior period adjustments on the primary
statements is presented in the table below.
Put and Call Options
During the financial period ended 3 February 2024, the Group reviewed the
accounting for put and call options and noted a put and call option obligation
that was not previously recorded, but which should have been recognised in
relation to the buy/sell agreement with Sonae Holdings, S.A., which held
29.99% of Iberian Sports Retail Group SL. Accordingly, the Group has restated
the amounts at 30 January 2022 to recognise the present value of that
obligation by increasing the put and call option liabilities by £58.2
million, with a debit to the put and call option reserve of £15.1m and a
brought forward retained earnings impact of £43.1m. The subsequent
remeasurement of that obligation during the period ended 28 January 2023 has
also been recorded as a prior period adjustment, resulting in an increase in
the put and call option liability of £9.6 million with a corresponding charge
to the FY23 income statement.
The Group reviewed the accounting for other put and call options and concluded
that there were adjustments required to correct the historic accounting in
respect of those options. Notably, it was identified that the purchase price
cap that is contained within the Genesis Topco Inc put and call option
agreement had not been correctly factored in to the put and call option
liability valuation in the prior period. It was also identified that the Group
had used inappropriate discount rates to measure certain put and call
liabilities and had failed to identify service provisions within certain other
agreements.
Consequently, the Group has restated the amounts 29 July 2023 which impacted:
- the Group's net assets at 29 July 2023 by £77.2m, with a
corresponding impact on retained earnings of £71.8m and on the put and call
option reserve of £5.4m;
Reclassifications
It was identified during the financial period ended 3 February 2024 that the
Group had previously been recording the remeasurement charge in relation to
put and call option valuations as an adjusting item within administrative
expenses within the income statement. As the movement relates to options
over the Group's own equity, it is financing in nature and should be presented
as an adjusting item within finance expenses. Accordingly, a reclassification
has been made in the income statement for the period ended 29 July 2023 in the
amount of £25.0m.
The tables below reconcile the overall movement in the financial statements in
relation to the prior period adjustments outlined above:
26 weeks to 29 July 2023
ISRG Put and Call Other options Net impact
Option £m (unaudited)
£m £m
Net assets (67.8) (9.4) (77.2)
Retained earnings (52.7) (19.1) (71.8)
Put and call option reserve (15.1) 9.7 (5.4)
Leases
During the financial period ended 3 February 2024, the Group reviewed the
leases portfolio and identified property leases that should have been
recognised in prior periods. Accordingly, the Group has restated the
right-of-use assets and corresponding lease liabilities as at 29 July 2023
amounting to £99.9m. The Group has also identified an overstatement of leases
in MIG resulting in restatement of right-of-use assets and corresponding lease
liabilities as at 29 July 2023 amounting to £8.0m. The net impact to
right-of- use assets and lease liabilities as at 29 July 2023 amounts to
£91.9m.
Foreign Exchange
During the financial period ended 3 February 2024, the Group reviewed the
foreign currency translation of goodwill and fascia names and identified an
error in foreign currency translation arising from accounting of prior period
acquisitions resulting in the understatement of goodwill and fascia balances
and overstatement of foreign currency translation reserve. Accordingly, the
Group has restated the goodwill and fascia balances and related foreign
currency translation reserve as at 29 July 2023 by £41.1m.
Supplier Rebates
During the financial period ended 3 February 2024, the Group reviewed the
accounting for supplier rebates related to marketing initiative support and
concluded that such rebates should be recognised within cost of sales instead
of being recognised within administrative expenses. Accordingly, the Group has
restated the related supplier rebates costs for the period ended 29 July 2023
amounting to £20.4m.
14. Prior Period Adjustments (continued)
The following tables summarize the annual Consolidated Statements for the
periods indicated, giving effect to the restatements described above.
Consolidated Income Statement
For the 26-week period ended 29 July 2023
Voluntary change in accounting policy
Put and call options Supplier £m Restated
Reported £m Rebates (unaudited)
£m £m £m
Revenue 4,783.9 - - - 4,783.9
Cost of Sales (2,486.9) - 20.4 - (2,466.5)
Gross profit 2,297.0 - 20.4 - 2,317.4
Selling and distribution expenses (1,664.6) - (20.4) - (1,685.0)
Administrative expenses - before adjusting items (250.2) (0.3) - 24.6 (225.9)
Administrative expenses - adjusting items 1.7 (25.0) - (24.6) (47.9)
Administrative expenses - total (248.5) (25.3) - - (273.8)
Share of profit of equity-accounted investees 3.1 - - - 3.1
Other operating income 13.1 - - - 13.1
Operating profit 400.1 (25.3) - - 374.8
Finance income 16.1 - - - 16.1
Finance expenses (41.0) 3.8 - - (37.2)
Net finance expense (24.9) 3.8 - - (21.1)
Profit before tax 375.2 (21.5) - - 353.7
Income tax expense (96.2) - - - (96.2)
Profit for the period 279.0 (21.5) - - 257.5
Attributable to equity holders of the parent 239.9 (21.5) - - 218.4
Attributable to non-controlling interest 39.1 - - - 39.1
Basic earnings per ordinary share 4.65p (0.42p) - - 4.23
Diluted earnings per ordinary share 4.65p (0.42p) - - 4.23
Consolidated Statement of Comprehensive Income
For the 26-week period ended 29 July 2023
Put and Supplier Restated
Reported call options Rebates (unaudited)
£m £m £m £m
Profit for the period 279.0 (21.5) - 257.5
Other comprehensive income:
Items that may be classified subsequently to the Consolidated Income
Statement:
Exchange differences on translation of foreign balances (76.1) - - (76.1)
Total other comprehensive income for the period (76.1) - - (76.1)
Total comprehensive income and expense for the period (net of income tax) 202.9
(21.5) - 181.4
Attributable to equity holders of the parent 174.0 (21.5) - 152.5
Attributable to non-controlling interest 28.9 - - 28.9
14. Prior Period Adjustments (continued)
Consolidated Statement of Financial Position
For the 26-week period ended 29 July 2023
Impact of prior period adjustments to opening balances
£m
Put and call options Foreign exchange Restated
£m £m (unaudited)
Reported Leases £m
£m £m
Non-current assets
Intangible assets 1,344.7 - - 41.1 - 1,385.8
Property, plant and equipment 963.8 - - - - 963.8
Right-of-use assets 2,071.1 - 91.9 - 45.0 2,208.0
Investments in associates and joint ventures 40.6 - - - - 40.6
Other assets 55.4 - - - - 55.4
Trade and other receivables 8.4 - - - - 8.4
Deferred tax assets 32.1 - - - - 32.1
Total non-current assets 4,516.1 - 91.9 41.1 45.0 4,694.1
Current assets
Inventories 1,625.1 - - - - 1,625.1
Trade and other receivables 292.1 - - - - 292.1
Cash and cash equivalents 1,391.1 - - - - 1,391.1
Current assets excluding held-for-sale 3,308.3 - - - - 3,308.3
Assets held-for-sale 92.9 - - - - 92.9
Total current assets 3,401.2 - - - - 3,401.2
Total assets 7,917.3 - 91.9 41.1 45.0 8,095.3
Current liabilities
Interest-bearing loans and borrowings (82.2) - - - - (82.2)
Lease liabilities (432.0) - (7.2) - (6.3) (445.5)
Trade and other payables (1,439.4) - - - - (1,439.4)
Put and call option liabilities (495.5) - - - - (495.5)
Provisions (7.7) - - - - (7.7)
Income tax liabilities (2.3) - - - - (2.3)
Current liabilities excluding held-for-sale (2,459.1) - (7.2) - (6.3) (2,472.6)
Liabilities held-for-sale (39.3) - - - - (39.3)
Total current liabilities (2,498.4) - (7.2) - (6.3) (2,511.9)
Non-current liabilities
Interest-bearing loans and borrowings (32.4) - - - - (32.4)
Lease liabilities (1,840.0) - (84.7) - (38.4) (1,963.1)
Other payables (85.7) - - - - (85.7)
Put and call option liabilities (822.0) 40.9 - - (43.5) (824.6)
Provisions (25.1) - - - - (25.1)
Deferred tax liabilities (109.8) - - - - (109.8)
Total non-current liabilities (2,915.0) 40.9 (84.7) - (81.9) (3,040.7)
Total liabilities (5,413.4) 40.9 (91.9) - (88.2) (5,552.6)
Net assets 2,503.9 40.9 - 41.1 (43.2) 2,542.7
Capital and reserves
Issued ordinary share capital 2.5 - - - - 2.5
Share premium 467.5 - - - - 467.5
Retained earnings 2,193.6 35.4 - - (36.5) 2,192.5
Share based payment reserve 0.5 - - - - 0.5
Foreign exchange translation reserve (10.2) - - 41.1 - 30.9
Put and call option reserve (694.2) 5.5 - - (6.7) (695.4)
Total equity attributable to equity holders of the parent 1,959.7 40.9 - 41.1 (43.2) 1,998.5
Non-controlling interest 544.2 - - - - 544.2
Total equity 2,503.9 40.9 - 41.1 (43.2) 2,542.7
Alternative Performance Measures
The Directors measure the performance of the Group based on a range of
financial measures, including measures not recognised by UK-adopted
International Financial Reporting Standards. These Alternative Performance
Measures may not be directly comparable with other companies' Alternative
Performance Measures and the Directors do not intend these to be a substitute
for, or superior to, IFRS measures. The Directors believe that these
Alternative Performance Measures assist in providing additional useful
information on the trading performance of the Group. Alternative Performance
Measures are also used to enhance the comparability of information between
reporting periods, by excluding adjusting items. The Group's operating and
reportable segments under IFRS 8 are JD, Complementary Concepts, and Sporting
Goods and Outdoors, however, more granular information is provided within
these Alternative Performance Measures which the Directors believe will
further enhance the readers understanding of the Group.
Adjusted Basic Earnings per Share
The calculation of basic earnings per share is detailed in Note 5 to the
financial statements. Adjusted basic earnings per ordinary share has 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
adjusting items. A reconciliation between basic earnings per share and
adjusted basic earnings per share is shown below:
Restated((1))
2024 2023
(unaudited) (unaudited)
Basic earnings per share per Note 5 0.42p 4.23p
Adjusting items 5.30p 0.80p
Tax relating to adjusting items (0.57)p (0.10)p
Adjusted basic earnings per ordinary share 5.15p 4.93p
(1) Please refer to Note 14 for further details of the
restatement.
Adjusting
Items
The Group exercises judgement in assessing whether items should be classified
as adjusting items. This assessment covers the nature of the item, cause of
occurrence and scale of impact of that item on the reported performance. In
determining whether an item should be presented as adjusting items, the Group
considers items which are significant because of either their size or their
nature which management believe would distort an understanding of earnings if
not adjusted. In order for an item to be presented as an adjusting item, it
should typically meet at least one of the following criteria:
- Impairments of tangible and intangible assets, investments and
loan receivables not recoverable
- Unusual in nature or outside the normal course of business
(for example, the non-cash movement in the present value of put and call
options)
- Items directly incurred as a result of either an acquisition,
including amortisation of acquired intangibles; a divestment, or a major
business change or restructuring programme.
The separate reporting of items, which are presented as adjusting items within
the relevant category in the Consolidated Income Statement, helps provide an
indication of the Group's trading performance in the normal course of
business. An explanation as to why individual items have been classified as
adjusting is given in Note 3 to the interim financial statements.
Furthermore, Alternative Performance Measures excluding adjusting items are
intended to enhance the comparability of information between reporting periods
and to help to provide an indication of the Group's trading performance.
Capital
Expenditure
Capital Expenditure is the measure of total cash invested each period to
maintain or build new retail fascias, logistics infrastructure, or technology
assets. This investment is in the ongoing business and is invested to deliver
growth in organic sales or improvements in gross profit or operating profit.
This Alternative Performance Measure is therefore useful to understand the
investment the company is making in its ongoing assets for which a return on
investment is expected in the future.
This measure excludes other items within net cash used in investing activities
in the cashflow statement as these are not related to investments in the
ongoing business, but to acquisitions, investments or disposals of
subsidiaries or joint ventures, proceeds of sale of non-current assets or
interest received.
The table below details the cashflow expenditure on capital investment as
detailed in the Consolidated Statement of Cash Flows:
26 weeks to 3 August 2024 26 weeks to 3 August 2023
(unaudited) (unaudited)
£m £m
Acquisition of intangibles (software development) 13.5 8.1
Acquisition of property, plant and equipment 230.7 197.7
Acquisition of other non-current assets 7.0 3.3
Total capital expenditure 251.2 209.1
Alternative Performance Measures (continued)
Capital Expenditure (continued)
An alternative presentation of this is as follows:
26 weeks to 3 August 2024 26 weeks to 28 July 2023
(unaudited) (unaudited)
£m £m
Investment in physical retail fascias 159.9 119.4
Investment in logistics infrastructure 61.2 73.3
Investment in technology and other 30.1 16.4
Total capital expenditure 251.2 209.1
Effective Tax Rate Before Adjusting Items
Being the adjusted tax charge as a percentage of the adjusted profit before
tax as outlined in the Consolidated Income Statement.
Restated((1))
26 weeks to 3 August 2024 26 weeks to
(unaudited) 28 July 2023
£m (unaudited)
£m
Income tax expense 74.1 96.2
Profit before tax 126.3 353.7
Effective tax rate 58.7% 27.2%
Restated((1))
26 weeks to 3 August 2024 26 weeks to
(unaudited) 28 July 2023
(unaudited)
Income tax expense before adjusting items 103.9 102.4
Profit before tax and adjusting items 405.6 397.8
Effective tax rate before adjusting items 25.6% 25.7%
(1) Please refer to Note 14 for further details of the
restatement.
Income Tax Expense Before Adjusting Items
Income tax expense before the impact of adjusting items as shown in the
Consolidated Income Statement and used in the Adjusted Effective Rate of
Taxation measure shown above.
Restated((1))
26 weeks to 3 August 2024 26 weeks to
(unaudited) 28 July 2023
£m (unaudited)
£m
Income tax expense 74.1 96.2
Effect of adjusting items on income tax 29.8 6.2
Income tax expense before adjusting items 103.9 102.4
(1) Please refer to Note 14 for further details of the
restatement.
Net Cashflow Before Dividends, Financing, Acquisitions and Disposals
Net cashflow before dividends, financing, acquisitions and disposals is the
movement in cash and cash equivalents period on period excluding the impact of
acquisition of subsidiaries or non-controlling interests, cash proceeds from
disposals, purchase of equity investments, dividends paid to equity
shareholders and non-controlling interests.
This performance measure gives insight into the cash generated from the annual
operations of the business including capital expenditure reinvested in the
business and excludes cashflows related to dividends and acquisitions and
disposals as these decisions are outside the normal course of business
operations.
Restated((1))
26 weeks to 26 weeks to
3 August 2024 28 July 2023
(unaudited) (unaudited)
£m £m
Profit before tax 126.3 353.7
Add back impairments of intangible assets and investments 95.6 7.9
Add back other non-cash adjusting items 162.9 36.2
Depreciation and amortisation of non-current assets 324.4 291.9
Change in working capital (238.5) (265.0)
Repayment of lease liabilities (189.1) (187.9)
Capital expenditure (251.2) (209.1)
Income taxes paid (132.4) (109.4)
Other (11.9) (37.3)
Net cashflow before dividends, financing, acquisitions and disposals (113.9) (119.0)
Net cashflow from interest-bearing loans and borrowings (42.0) (6.6)
Drawdown of acquisition finance 801.6 -
Acquisition of NCI and cash consideration of disposals (836.7) (77.3)
Equity dividends paid (31.0) -
Dividends paid to NCI in subsidiaries net of dividend received - (2.1)
Change in cash and cash equivalents (2) (222.0) (205.0)
Cash and cash equivalents at the beginning of the period (2) 1,101.6 1,548.9
Cash and cash equivalents at the end of the period (2) 879.6 1,343.9
(1) Please refer to Note 14 for further details of the
restatement.
(2) Cash and cash equivalents equates to the cash and cash
equivalents presented in the Consolidated Statement of Cash Flows (cash and
cash equivalents and overdrafts).
Net Cash Before Lease Liabilities
Net cash before lease liabilities consists of cash and cash equivalents
together with other borrowings from bank loans and overdrafts but before lease
liabilities.
Net cash before lease liabilities is a measure of the Group's net indebtedness
that provides an indicator of the overall strength of the Consolidated
Statement of Financial Position. It is also a single measure that can be used
to assess the combined effect of the Group's cash position and its
indebtedness. Net cash before lease liabilities is considered to be an
alternative performance measure as it is not defined in IFRS. The most
directly comparable IFRS measure is the aggregate of borrowings and lease
liabilities (current and non-current) and cash and cash equivalents.
A reconciliation of these measures with net cash can be found in Note 11 to
these interim financial statements.
Restated((1))
3 August 2024 28 July 2023
(unaudited) (unaudited)
£m £m
Net debt (2,840.1) (1,131.4)
Lease liabilities 2,880.9 2,407.9
Net cash before lease liabilities 40.8 1,276.5
(1) Please refer to Note 14 for further details of the
restatement.
Alternative Performance Measures (continued)
Net Financial Expense on Financial Assets Before Adjusting Items
Restated((1))
26 weeks to 26 weeks to
3 August 2024 28 July 2023
(unaudited) (unaudited)
£m £m
Net financial expenses (165.9) (21.1)
Adjusting items (in financial expenses) 120.4 (3.8)
Net financial expense on financial assets before adjusting (45.5) (24.9)
items
(1) Please refer to Note 14 for further details of the
restatement.
Operating Costs Before Adjusting Items
Being operating costs before adjusting items included within operating costs.
Restated((1))
26 weeks to 3 August 2024 26 weeks to 28 July 2023
(unaudited) (unaudited)
£m £m
Selling and distribution expenses (1,769.1) (1,685.0)
Administrative expenses (382.3) (273.8)
Adjusting items (within administrative expenses) 158.9 47.9
Share of profits of equity-accounted investees 3.4 3.1
Other operating income 12.2 13.1
Total operating costs before adjusting items 1,976.9 1,894.7
(1) Please refer to Note 14 for further details of the
restatement.
Operating Margin Before Adjusting Items
A reconciliation between operating margin and adjusting items can be found in the Summary Consolidated Income Statement.
Organic Sales Growth
One of the key measures of performance is the growth in sales between reporting periods excluding the impact of currency, acquisitions and disposals. This is described by the Group as 'Organic Sales Growth.'
Organic Sales Growth is calculated at constant currency using the average
exchange rate of the current period applied to sales from the current and
prior periods. Organic Sales Growth is calculated by removing the impact of
all sales in the prior period from:
- Disposals undertaken in the prior period; and
- Disposals undertaken in the current period.
In this context, 'disposals' refers to businesses divested by the Group, and
does not include individual store closures within continuing businesses. This
gives a new prior period base from which to calculate Organic Sales Growth
rates.
To calculate the Organic Sales Growth % in the current year, the new prior
period base is compared to the current period sales, adjusted as follows:
- Exclude any sales from businesses acquired in the current
period; and
- For acquisitions that were made in the prior period, exclude
sales in the equivalent pre-acquisition period in the current period; and
- Excluding the impact of reporting period misalignment with the
prior period due to the 53(rd) week at the end of FY24.
This isolates Organic Sales Growth to the percentage change in year-on-year
sales from businesses which were part of the Group in both the current and
prior periods.
Organic Sales Growth is further split into like-for-like ("LFL") sales, which
represent sales from stores of these businesses that existed in both periods,
and 'non like-for-like' sales ("non-LFL") which represents sales from new net
space, store relocations, and store conversions other than those that are part
of the strategic Finish Line to JD migration programme. This split enables the
performance of the retail stores to be measured on a consistent year-on-year
basis and is a common term used in the industry, albeit how it is calculated
can differ somewhat from company to company.
Sales Growth from Net New Space
The definition of sales growth from net new space is outlined in the Organic
Sales Growth definition above.
Sales Growth
One of the key measures of performance is the growth in sales between
reporting periods excluding the impact of currency. The figures below are
extracted from the Organic Sales Growth table.
Sales Growth
£m
Revenue 26 weeks 2024 4,783.9
Impact of retranslating at 2025 currency rate (70.2)
4,713.7
Revenue 26 weeks 2025 5,032.2
Sales Growth 5.2%
Foreign Exchange Rates
Period Closing rates Average rates
26 weeks to 26 weeks to 26 weeks to 26 weeks to
3 August 28 July 3 August 28 July
2024 2023 2024 2023
USD 1.28 1.29 1.27 1.24
EUR 1.17 1.17 1.17 1.15
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
- the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted for use in
the UK; and
- the interim management report includes a fair review of the
information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being
an indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
On behalf of the Board
Régis Schultz
Chief Executive Officer
Hollinsbrook Way
Pilsworth
Bury
Lancashire
02 October 2024
Disclaimer
This announcement contains certain forward-looking statements with respect to
the financial condition, results, operations and businesses of JD Sports
Fashion Plc. These statements and forecasts involve risk and uncertainty
because they relate to events and depend on circumstances that will occur in
the future. There are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied by these
forward-looking statements and forecasts.
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