Sporting goods and clothing retailer JD Sports Fashion saw pre-tax profits soar 28 per cent to £78.6 million over the course of 2010, according to a preliminary results statement published today.
In the 52 weeks to January 29th 2011 total revenue increased by 14.8 per cent year-on-year to £883.7 million, with the business citing its investment in brands and new business as a key driver of success.
The 12-month period in question saw JD Sports acquire the Sonneti, Chilli Pepper and Nanny State brands, while the takeover of fellow sports retailer Champion post year-end has enhanced the company’s presence in the Republic of Ireland going forward.
JD Sports has succeeded as sector rival JJB Sports has struggled, and just last month the former withdrew its interest in taking over its ailing competitor after preliminary talks about an acquisition broke down.
There is a feeling among business analysts that the sports retail sector is overcrowded, but JD has positioned itself as the fashion-conscious sporting brand and is attracting a loyal young audience as a result.
Peter Cowgill, Executive Chairman of JD Sports Fashion, said: “The year ended January 29th 2011 has been the seventh successive year of good progress in revenue and profitability for the group.
“Such sustained performance continues to reflect the strength and uniqueness of our brand and fascia offers as well as the strength of our management teams.
“Our very strong cash position has also allowed us to continue to invest in brands, our store portfolios and new businesses during the year and since the year end.”
The board has predicted another significant increase in the level of dividends with a final proposed dividend increase of 31 per cent to 19.2p, compared to 14.7p in 2009/10.
Group total dividends payable for the 12 months have increased from 18p to 23p year-on-year, which follows on from rises of 50 and 41 per cent in the last two years respectively.
Commenting on JD’s performance earlier this year, Retail Analyst at Verdict Research Carly Syme said the company has done well with its young fashion offering because its average customer has few financial responsibilities, and is not significantly affected by the economic climate.
Like many other retailers though, Cowgill is aware that the 12 months ahead will be tough, especially with rising cotton prices putting pressure on companies’ margins and a raft of economic factors set to further impact consumer spending.
He said: “The board is extremely cautious in its outlook, particularly when the profits achieved for the year to January 29th 2011 are effectively rebased purely as a result of the impact of increased VAT.”