TIDMJD.
RNS Number : 1325N
JD Sports Fashion PLC
21 September 2023
21 September 2023
JD SPORTS FASHION PLC
UNAUDITED INTERIM RESULTS
FOR THE 26 WEEKS TO 29 JULY 2023
JD Sports Fashion Plc (the 'Group'), the leading retailer of
sports, fashion and outdoor brands, today announces its interim
results for the 26 weeks ended 29 July 2023 (comparative figures
are shown for the 26-week period ended 30 July 2022).
Delivering on our strategy; Strong Sales Growth & Profit on
Track
Commenting on the results, Régis Schultz, Chief Executive
Officer of JD Sports Fashion Plc, said:
"We have delivered a strong first half to our financial period
with organic sales growth(1) of 12% and profit on track for the
full year. In line with our strategic plan, growth is being driven
by our premium Sports Fashion business with an impressive
performance in Europe (+27%) and North America (+15%), supported by
a strong performance in our more mature UK market (+8%). This
performance continued in the important back to school period.
"We have made good progress delivering on our strategic pillars,
focusing on expanding the JD brand and we will open more than 200
JD stores worldwide in this financial period. We are going to
accelerate JD brand growth in Europe through purchasing the
non-controlling interest in both ISRG and MIG, and the acquisition
of GAP stores in France. This is alongside the proposed acquisition
of Courir in the region, which will, when completed, enhance the
Group's existing portfolio of complementary concepts, bringing into
the company its market-leading focus on the female customer.
Meanwhile, we are building and investing in talent and
infrastructure to support future growth.
"Our first half performance would not have been possible without
the efforts of our people across the world and I am extremely
grateful for their continued hard work and commitment. I would also
like to thank outgoing CFO Neil Greenhalgh specifically for his
support since I joined and for his years of service to JD. I look
forward to working with Dominic Platt, who will start as our new
CFO in October 2023.
"Looking ahead, our core consumers remain resilient in the face
of the ongoing global macro-economic challenges. The JD brand
continues to strengthen its global presence, supported by our
strategic partnerships with much-loved brands and our strong
balance sheet."
Performance summary
26 weeks to 26 weeks to Year
29 July 30 July on
2023 2022 Year
GBPm GBPm GBPm
Revenue (2) 4,783.9 4,418.1 8.3%
Gross Profit % (2) 48.0% 48.5%
Operating profit before
adjusted items (1) 398.4 418.1 (4.7)%
Net interest expense (24.9) (34.6)
Profit before tax and
adjusted items (1) 373.5 383.5 (2.6)%
Net cash at period end
(3) 1,276.5 1,013.1 26.0%
Statutory measures
Operating profit 400.1 332.9 20.2%
Net interest expense (24.9) (34.6)
Profit before tax 375.2 298.3 25.8%
Basic earnings per share
(GBp) 4.65 3.58 29.9%
Adjusted earnings per share
(1) (GBp) 4.62 5.23 (11.7)%
Interim dividend per share
(GBp) 0.30 0.13 130.8%
----------------------------- ------------ ------------ --------
(1) Alternative performance measure (APM) - further detail
setting out the background to the APMs (and a reconciliation to
statutory measures) is provided after the CFO Review
(2) This period reflects the reclassification of delivery income
from operating costs to revenue, in line with the FY23 year end.
Nil cash and profit impact but +30 basis points impact on GP% and
-30 basis points impact on operating costs as a % of revenue
(3) Net cash consists of cash and cash equivalents less
interest-bearing loans and borrowings
Financial highlights
-- Group revenue growth of 8% to GBP4,783.9m and 12% on an
organic (1,3) basis, reflecting the impact of non-core UK
divestments
-- Premium Sports Fashion delivered 15% organic growth, or 9%
like-for-like (1,4) (LFL); further market share gains in key
regions
-- Gross margins robust at 48% and well above pre-pandemic
levels; H1 more normal promotional environment
-- Strong performance from our North America premium Sports
Fashion fascias: organic growth of 15%, LFL growth of 9% and EBIT
up 12%
-- Group Profit before Tax and adjusted items of GBP373.5m,
reflecting a more normal H1 contribution of c.35% and investment in
our people, systems and supply chain. After incorporating the
adjusted items, Group Profit before Tax was GBP375.2m
-- Balance sheet net cash of GBP1,276.5m, up GBP263.4m versus 12 months ago
-- Inventory levels well managed and in line with sales growth expectations
-- Interim dividend increased; returning to pre-pandemic dividend cover (1)
Strategic highlights
-- Delivering progress on all key elements of our strategy
-- On track to add over 200 new JD stores globally by January 2024
-- Strong trading from US complementary concepts DTLR and Shoe Palace
-- New distribution centres on track and began loyalty trial in the UK
-- Strong relationships with key brand partners
-- New leadership and organisation structure embedding well
(3) Total sales excluding acquisitions and disposals but
including new stores
(4) Same stores trading for at least 12 months
Current trading and outlook
In the last seven weeks, trading across the Group has continued
in line with our expectations. At constant exchange rates, organic
sales growth (1) was 10%. In addition, we have continued to open
new JD stores worldwide and are on track to meet our full-year
store targets.
We are acutely aware of how tough the macro-economic environment
is for consumers across the world. Despite this context, assuming
current exchange rates, we expect the Group's headline profit
before tax and adjusted items for the 53-week period ending 3
February 2024 will be in line with the current market consensus
expectations of GBP1.04 billion.
Enquiries:
JD Sports Fashion Plc Tel: 0161 767 1000
Régis Schultz, Chief Executive
Officer
Neil Greenhalgh, Chief Financial Officer
Mark Blythman, Director of Investor
Relations
Advisors
Investec Bank Plc - David Flin Tel: 0207 597 5970
Peel Hunt LLP - Dan Webster Tel: 0207 418 8869
FGS Global - Rollo Head, Jenny Davey, Tel: 0207 251 3801
James Thompson
----------------------------------------- -------------------
Presentation of interim results
The presentation to analysts will take place at 10.30am (BST) on
21 September 2023. To register for the live webcast of this
presentation, please use the following link:
https://brrmedia.news/JD_IR23
Financial calendar
Pre-close trading statement: Mid-January 2024
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 exclusive products from its strategic
partnerships with the most-loved premium brands - including Nike,
Adidas and The North Face. 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: global expansion focused on the JD brand first;
leveraging complementary concepts; moving beyond physical retail by
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 3,347 stores worldwide
at 29 July 2023.
Chief Executive Officer's Review
Performance
Group
Performance for the 26 weeks to 29 July 2023 was in line with
our expectations. The Group grew revenue by 8% to GBP4,783.9m,
including the impact of non-core divestments in the UK. In constant
currency (1) terms, total revenue growth was 7% and organic (1)
sales growth was 12%, maintaining the trend seen across the
previous financial period. LFL sales growth, excluding new sites
opened during the last 12 months, was 8%. By quarter, we had a
particularly strong Q1, helped significantly by much fuller brand
availability year-on-year, especially in North America, but a
softer Q2 driven also by North America, with June the slowest
month. July was better, helped by strong 'back to school' trading
in North America, and this more positive trading has continued
since the period end.
We ended the period with 3,347 retail stores, 43 less than at
the start of the period because of the strategic divestment of 66
non-core premium fashion fascias.
The Group gross profit margin was 48.0%, 50 basis points ('bps')
lower than the same period last year, driven mainly by the more
normalised promotional environment due to restored product
availability. The reclassification of delivery income boosted gross
profit margin by 30 bps.
Operating costs before adjusted items (1) were 10% ahead of the
first half last year as we accelerated our investment in people,
systems, infrastructure and new store rollouts. This was the first
full period where we saw the financial impact of the investment in
our retail colleague base in the UK but we are already seeing the
benefits of this investment through more productive teams and lower
colleague turnover in our stores. Further, there continue to be
upfront costs associated with the various operational investments
such as store acquisitions and new distribution centres ('DCs')
ahead of generating the benefits from higher sales and a more
efficient supply chain. The reclassification of delivery income
reduced operating cost as % of revenue by 30bps in the period. As a
result of these impacts, operating profit before adjusted items (1)
was down 5% to GBP398.4m.
Group profit before tax and adjusted items (1) was GBP373.5m, in
line with expectations and reflecting the move back to a more
normal first half contribution of around 35%.
Our net cash (1) position improved 26% from 12 months ago to
reach GBP1,276.5m. Capital expenditure was GBP209.1m, up GBP52.5m
on the first half last year, as we started stepping up our store
opening programme and continued to invest in strengthening our
operational efficiency.
Reflecting the Group's first half performance, our continued
strong cash generation and the Board's confidence in our long-term
growth strategy and prospects within the Sports Fashion market, the
Board is proposing an increase in the interim dividend from 0.13p
per ordinary share to 0.30p per ordinary share. This returns the
interim dividend to its pre-pandemic cover levels. This will be
paid on 5 January 2024 to all shareholders on the register at 8
December 2023.
Governance
As part of the investment in strengthening our infrastructure,
we are on track to complete the governance transformation programme
in line with the plan we set out in June 2022. Highlights from the
programme over the last six months include: Ian Dyson, Angela Luger
and Darren Shapland joining the Board as independent
non-executives; determining a clear path to setting up a Board ESG
committee, which will be led by Angela Luger; and attaining
overwhelming shareholder support for our updated Remuneration
Policy. Going forward, we will continue to act in line with best
practice while preparing for potential upcoming changes to the
Corporate Governance Code.
M&A update
Our M&A strategy is currently a combination of business
simplification, through both acquiring non-controlling interests
and divesting of non-core businesses, and facilitating the future
growth of both the JD brand and complementary concepts.
-- Groupe Courir ('Courir')
Following approval from the Courir employee works council, we
entered into a Share Purchase Agreement in June 2023 to acquire
Courir, which has over 300 Courir-bannered stores across six
European countries. This acquisition remains subject to competition
authority approval and we are currently in the 'pre-notification'
phase. We still anticipate closing this acquisition prior to our
full year results announcement in 2024.
-- Iberian Sports Retail Group ('ISRG')
We were served with a buy/sell notice by the non-controlling
interest in April 2023 to either acquire the other 49.98% stake in
ISRG or sell our 50.02% interest. We chose to acquire the minority
stake to accelerate the development of the JD brand in Iberia. We
will shortly publish the shareholder circular seeking approval for
this transaction. The General Meeting of Shareholders will be held
on 9 October 2023 and we expect to complete the acquisition in
October.
-- Marketing Investment Group ('MIG')
We exercised an option to acquire the minority 40% stake on 8
August 2023 with the plan to accelerate the growth of the JD brand
in Eastern and Central Europe, including entering two new countries
in the region. This transaction is subject to customary competition
authority approval. We aim to complete this acquisition later this
calendar year.
-- Malaysia
After the period-end date, we concluded an acquisition of the
non-controlling interest in our Malaysian, Thai and Singaporean
business. Once more, this will help us to deliver further on our JD
First strategy which is at the heart of our five-year growth
plan.
Sports Fashion
Our Sports Fashion business achieved revenue of GBP4,511.9m in
the period, up 9% on the corresponding period last year, or 7% in
constant currency (1) . The gross profit margin was 48.4%, 60bps
down on last year, due mainly to operating in a more normalised
promotional environment because of much better product
availability, especially in North America. Before adjusted items
(1) , operating profit was GBP398.6m, 3% lower than last year as we
continued to invest in our operational infrastructure.
Premium
Premium Sports Fashion revenue, which represents 80% of our
Sports Fashion segment by revenue, was up 17% to GBP3,594.2m, or
16% in constant currency (1) . Organic sales growth (1) was 15%.
Operating profit was GBP335.5m, down 5% on the corresponding period
last year, due primarily to operational infrastructure
investment.
UK and Republic of Ireland
This was another good performance from our longest-standing
region. With our premium Sports Fashion retail fascias growing
revenue by 8% to GBP1,202.5m and organic sales growth (1) of
8%.
Operating profit in premium Sports Fashion was down 12% to
GBP141.9m as head office elements of our investment in future
growth, such as dual-running of DCs, acquisition costs and certain
systems developments, are attributed to this region.
In terms of store numbers, we ended the period at 448 premium
Sports Fashion stores, up four since the start of the period. The
UK remains an opportunity for selective growth - new stores in the
period included Derby, which was our 400th JD store in the UK and
our 100th on a retail park, and upsizes to come include premium
malls such as the Trafford Centre in Manchester and Stratford in
London.
Europe
Premium Sports Fashion revenue grew 32% to GBP773.8m, or 28% in
constant currency (1) , with organic sales growth (1) of 27% and
LFL sales growth of 15%. Footfall was very strong in Q1 helped by
better year-on-year product availability. All major European
countries saw strong organic sales growth (1) with Italy, Holland
and Spain leading the way. The conversion of 19 Conbipel stores in
Italy to the JD brand helped to drive the strong sales growth in
the period. These conversions are trading well and ahead of
expectations, and helped Italy to be the fastest growing market for
the JD brand in Europe.
In line with our expectations, operating profit was GBP25.0m,
down 36% on the first half last year. While gross profit margins
were down year-on-year due primarily to the more normal promotional
environment, increased operating costs were the main reason for the
reduction in profit: we paid rent and staff costs on the nine
acquired GAP stores in France, which will commence trading over the
course of H2; we were fully costed on the Conbipel stores in Italy
but with only a small proportion of the full expected returns being
generated in the period; and we have been taking on additional
supply chain costs related to the new Heerlen DC as we ramp up
towards full opening.
We ended the period with 474 premium Sports Fashion stores, up
39 on the period end. We opened 41 new premium Sports Fashion
stores across 12 different countries with Italy contributing around
half of these new stores.
North America
Our North American businesses continue to trade well. Our
market-leading proposition and continued outperformance is built
upon larger and better-invested stores, a broader sales mix and
compelling brand partner relationships.
Premium Sports Fashion revenue was up 18% in the first half to
GBP1,387.0m with constant currency (1) growth of 15%. Organic sales
growth (1) was also 15%. All our North American businesses achieved
good organic sales growth (1) with the three largest - Finish
Line/JD, DTLR and Shoe Palace - delivering between 13% and 17%
organic sales growth (1) . Q1 trading was stronger than Q2 in North
America - in Q1 we benefitted significantly from better stock
availability, while in Q2 organic sales growth (1) was much softer.
Within Q2, June was slow which can be attributed partly to a lower
level of new product releases than in previous periods. Sales
growth improved in July and since then, organic sales growth (1)
has continued to improve, helped by a strong 'back to school'
season.
Premium Sports Fashion gross margins were down on last year due
mainly to a more normalised promotional environment but operating
profit grew 12% to GBP136.2m.
There were 969 premium stores in North America at the period
end, up a net 14 versus the start of the period. 24 new stores were
opened of which 16 were conversions from Finish Line to JD.
Including Canada, we now have 168 JD stores in North America, as we
continue to grow the JD brand presence in the region. There were a
net three new Shoe Palace openings in the period including at
Pearland and Brazos in Texas, as this business extends its presence
in the Southern border states.
Asia Pacific
Premium Sports Fashion revenue in Asia Pacific grew strongly by
22% in the period to GBP230.9m, and 26% on a constant currency (1)
basis. Organic sales growth (1) was also 26% with all countries in
growth including Australia, our principal market in the region.
Operating profit was up 4% to GBP32.4m as the closure of our
South Korea business progressed as planned. Going forward, our
Sydney distribution centre (DC) will relocate in 2024 to a new,
expanded site to ensure we have sufficient capacity for the next
stage of growth.
We ended the period with 84 stores, four less than the start of
the period. We opened four stores in the period, and in August 2023
we have subsequently opened a new flagship store on Pitt Street in
Sydney which is Australia's prime retail destination. This store
achieved our best-ever opening day for a new store globally.
Other Sports Fashion Fascias
Due solely to the UK divestments of non-core fashion businesses,
revenue in our other Sports Fashion fascias was GBP783.8m, down 16%
or 18% in constant currency (1) . Organic sales growth (1) was 6%
and all regions achieved organic sales growth (1) . Europe, which
now represents 76% of our other Sports Fashion fascias, performed
particularly well with organic sales growth* of 9% led by Cosmos in
Greece and Sport Zone in Portugal. Operating profit was broadly in
line with the corresponding period last year at GBP43.7m.
We ended the period with 1,125 stores, down 92 on the period
start. 66 of these were from the non-core fashion business
divestments in the UK.
Sports Fashion - Gyms
In the period, we continued to roll-out the JD Gyms fascia,
expanding our market-leading, premium low-cost gyms business across
the UK but particularly in the South of England. After opening two
new gyms in the period, the Group operated from 80 sites in the UK.
We plan to increase the pace of our organic rollout going forward
and have a strong pipeline of new sites. We expect to open a
further six locations in the current financial period.
Outdoor
We achieved revenue of GBP272.0m in the first half of this
financial period, which was 1% down on the corresponding period
last year having reduced the total number of stores by four to 247
by the period end. We made a small operating loss in the half of
GBP0.2m due primarily to the impact from slower camping sales. We
saw an uptick in performance in July and August when the UK weather
became more unsettled.
Our new Go Outdoors stores are performing above our expectations
including new flagship stores in Derby and Swindon. We also
refreshed a further seven GO Outdoors large-format stores during
the period, including in Bristol and Milton Keynes.
We acquired the remaining shares in Tiso Group Limited from the
founding family, making the business 100% Group owned, while to
enhance our customer service and efficiency further, we opened a
dedicated B2C e-commerce fulfilment centre at Trafford Park,
enabling the existing large DC in Cheshire to focus solely on store
replenishment.
Strategy update
We launched our new strategy at our Capital Markets Day in
February 2023. We are making strong progress on all key elements of
the strategy and we are on track to deliver year one's targets
across our four strategic pillars. Going forward, strategic
delivery will help to drive double-digit revenue growth,
double-digit market shares in our major markets and a double-digit
operating profit margin
JD Brand First
The JD brand is our priority and the acceleration of our JD
store opening programme has begun. In total, we added 83 new JD
stores in the period, of which 17 were conversions. With our strong
pipeline of new stores in place, supported by an expanded team in
all regions, we are on track to deliver over 200 new stores this
year.
As we accelerate our store opening programme, we will maintain
our demanding performance targets for new stores. Sales uplifts
from conversions, globally, are 20% while payback on our new JD
stores continues to be within three years.
There is good momentum in North America where we converted 16
Finish Line stores and opened 14 new JD stores across the US and
Canada. New locations for the JD brand included the Aventura mall
near Miami, the third largest in the US, and the Mall at Prince
George's, in Washington DC. We expect to convert a further 15 to 20
Finish Line stores to JD in H2.
In Europe, we opened a net 39 new JD stores, including some of
the 19 of the 21 stores we acquired from Conbipel in Italy. We have
now re-opened all the Conbipel stores and they are trading ahead of
expectations. We opened our first stores in Slovakia and Cyprus,
taking to 30 the number of countries with a JD fascia, while we are
on track to open our new flagship store on the Champs Elysees ahead
of the 2024 Paris Olympics.
The minority acquisitions in Iberia via ISRG and Central/Eastern
Europe via MIG, strengthen our foothold in these geographies and
will accelerate our European expansion through an enhanced focus on
new JD store openings and conversions.
In UK/ROI, the main strategic focus is improving locations or
store size in existing cities and towns. We opened a net four JD
stores, upsized our Birmingham Airport store and have begun the
expansion of our flagship store at Stratford in London, which will
reopen in Q1 of FY25.
In Asia Pacific, we opened four new JD stores but closed eight
following our withdrawal from South Korea. We finalised the
acquisition of our non-controlling interests across Malaysia,
Thailand and Singapore after the period end, which will help us to
accelerate the growth of the JD brand in these markets .
In addition to 'own store' growth, we signed our first JD
franchise agreement in July in the Middle East with Gulf Marketing
Group ('GMG'). This agreement has an initial target of 50
franchised JD stores by 2028 across UAE, Saudi Arabia and Egypt. We
expect our JD franchise model to gain real traction going forward.
We are working on other exciting opportunities to build a larger JD
franchise footprint in regions such as Africa and South East
Asia.
Importance of Complementary Concepts
We continue to leverage our complementary brands at the top of
our brand pyramid, such as Size? and Footpatrol providing an
environment for seeding new product ideas, launching exclusive
ranges and introducing new brands to the Group. In the US, both
DTLR and Shoe Palace, which cater primarily to a different
demographic to JD/Finish Line, continued to perform well in the
period.
The acquisition of Courir continues to progress and we expect
completion in either Q4 2023 or Q1 2024. Courir will add a new
dimension to our brand portfolio with its stronger female product
range and customer base and this will provide material learnings to
the JD brand and other brands within the Group.
JD Beyond Physical Retail
Towards the end of the period, we launched our loyalty programme
pilot scheme, JD Status, across ten stores around Manchester. It is
very early days in the scheme but initial results are encouraging
with a very positive reaction from our customers and brand
partners. Assuming continued success, the next stage would be a
programme rollout across the UK.
We continue to invest in other areas of our omnichannel strategy
to develop our capability. An end-to-end cyber improvement
programme was initiated in the period to strengthen security
architecture and we have an ambitious development roadmap in place
to enhance this further. We also commenced the initial scoping for
a new global e-commerce platform.
In addition, to keep ahead of our footprint growth, we continue
to make improvements and investments in our supply chain. All major
projects are progressing at pace. Our new European DC at Heerlen,
in The Netherlands, will start receiving stock by December 2023
ahead of starting to ship to stores from early 2024 as planned. The
fit out of the latest technology and automation solutions is
underway, enabling it to serve as the logistics hub for all JD
operations across Continental Europe. Our new UK B2C facility in
Derby is moving towards optimum capacity and is on track to fulfil
most UK online orders ahead of our peak trading period in Q4 2023.
The planned exit from the temporary third-party logistics DC in
Leeds was completed as planned earlier this year.
People, Partners & Communities
Our people are at the heart of our business. We have invested an
annual GBP45m in our retail colleagues' base salaries to ensure we
recruit and retain the best talent and, following this investment,
we have seen a significant reduction in colleague turnover. We are
also investing in a new global HRIS project which will ensure a
much more seamless HR experience for our people.
Our new global leadership team is almost fully embedded now and
driving the JD First strategy across the business. In October,
Dominic Platt will join as the Group's new Chief Financial Officer
and Adam Warne will join as the new Chief Technology Officer,
taking full responsibility for our systems across the globe.
Our partner relationships are as strong as ever. We are Nike's
key global partner, while we are Adidas's biggest global partner
for the 'terrace' category, within which we've seen a great
performance from Gazelle and Samba. Alongside the larger brands,
through our scale and global reach, we are well placed to support
the global development of fast-growing brands and in H1 we saw
particularly strong growth from New Balance and On Running.
Our commitment to our community is showcased through our ongoing
partnership with the JD Foundation and various community support
programmes across the regions, such as the Shoe Palace 'Believe to
Achieve' programme. The JD Foundation strategy is evolving to focus
on building stronger youth communities and transforming young
people's lives through opportunities, engagement and social
change.
Régis Schultz
Chief Executive Officer
21 September 2023
Chief Financial Officer's Statement
Financial Performance
Revenue and Gross Margin
Total revenue for the Group for the first half of the period
increased to GBP4,783.9 million (2022: GBP4,418.1 million) with
growth in organic sales at constant exchange rates (1) compared to
the prior period of 12% with all of the Group's premium Sports
Fashion businesses benefitting from the enhanced availability of
key footwear styles.
As expected, the enhanced availability of footwear resulted in a
more normalised promotional environment and so total gross margin
for the first half has decreased slightly to 48.0% (2022: 48.5%).
Within this, gross margins across the Group's businesses in North
America, where footwear still represents approximately 80% of total
sales, decreased to 46.7% (2022: 49.4%). However, this margin is
still 3.7% ahead of the position before the COVID-19 pandemic
(2019: 43.0%) which is a fair indication of the underlying progress
that we have made in this market.
Profit Before Tax
Profit before tax and adjusted items (1) is also broadly
constant with the prior period at GBP373.5 million (2022: GBP383.5
million). This result is entirely consistent with the more
normalised trading and promotional patterns that the Group would
expect to see in the current period with around 35% of annual
profits generated in the first half of the period.
As expected, our premium businesses in North America saw an
increase in profit in the period, as these are the businesses which
have benefitted most from the normalisation of supply from some of
the major international brands, with these businesses delivering an
aggregate profit before tax and adjusting items of GBP123.8 million
(2022: GBP111.1 million).
There was a net credit for adjusting items in the period of
GBP1.7 million (2022: charge of GBP85.2 million) principally from
the movement in the present value of the liabilities in respect of
future put and call options:
2023 2022
GBPm GBPm
Impairments of intangible assets and investments
(1) 7.9 36.5
Items that are unusual in nature or outside of the
normal course of business:
Movement in present value of put and call options
(2) (25.0) 40.2
Items as a result of acquisitions, divestments,
major business changes or restructuring:
Divestment and restructuring (3) 15.4 8.5
Administrative expenses - adjusted items (1.7) 85.2
======= ======
1. The impairment in the current period relates to the
impairment of goodwill arising in a prior period on the acquisition
of GymNation (GBP7.9 million) which has been classified as
held-for-sale as at 29 July 2023 (see Note 8). The impairment in
the prior period primarily relates to the impairment of goodwill
and fascia name arising in a prior period on the acquisition of
Missy Empire (GBP10.2 million) and Hairburst (GBP12.7 million).
Also included in the prior period is an impairment charge for the
investment in the Group's joint venture, Gym King (GBP13.6
million).
2. Movement in the present value of the liabilities in respect
of put and call options as re-measured at each reporting date is a
net credit of GBP25.0 million, comprising Genesis Topco Inc credit
of GBP35.8 million (2022: charge of GBP28.7 million), Iberian
Sports Retail Group charge of GBPnil (2022: charge of GBP16.8
million), Marketing Investment Group S.A charge of GBP14.3 million
(2022: GBPnil) and a credit of GBP3.5 million (2022: credit of
GBP5.3 million) in relation to the other put and call options held
by non-controlling interests.
3. The divestment and restructuring loss of GBP15.4 million
primarily relates to the loss on disposal of 80s Casual Classics of
GBP9.5 million. The balance comprises further losses in respect of
the disposal of the non-core fashion businesses to Frasers, which
were completed in the current financial period (see Note 7 for
divestments). The divestment and restructuring charge in the prior
period relates to the divestment of Footasylum (GBP8.5
million).
Group profit before tax ultimately increased to GBP375.2 million
(2022: GBP298.3 million).
Cash and Working Capital
The Group's capacity to generate cash in its retail operations
remains as strong as ever which is reflected in the fact that the
net cash (1) balance at the end of the period has increased to
GBP1,276.5 million (2022: GBP1,013.1 million).
Our priority for utilising the cash resources remains focused on
investment in our retail fascias, particularly where it helps
expand the global presence of JD, and complementary acquisitions.
In this regard, the Group has submitted its mandatory anti-trust
filing on the proposed acquisition of Groupe Courir in France and
is working collaboratively with the relevant authorities to provide
additional information as requested. After deducting net debt of
EUR195 million, the amount payable at completion, subject to
certain adjustments, will be EUR325 million which will be funded
through the available cash resources.
Net inventories across the Group at the end of the period were
GBP1,625.1 million (2022: GBP1,428.5 million). Within this,
inventories in our businesses in North America increased to
GBP533.4 million (2022: GBP379.7 million), with the sell through of
the delayed Summer 2022 apparel ranges progressing as expected.
Gross capital expenditure (1) (excluding disposal costs)
increased to GBP209.1 million (2022: GBP156.6 million) with the
primary focus of our capital expenditure continuing to be our
physical retail fascias and gyms, where spend in the period was
GBP119.4 million (2022: GBP87.4 million). As usual, we would expect
the overall spend through the second half to be higher than that in
the first half with capital expenditure for the full 53 week period
now anticipated to be in the range of GBP500 million to GBP550
million (52 weeks to 28 January 2023: GBP359.3 million).
Earnings per Ordinary Share
The basic earnings per ordinary share increased by 29.9% to
4.65p (2022: 3.58p) consistent with the uplift in profit
attributable to equity holders.
The adjusted (1) earnings per ordinary share decreased to 4.62p
(2022: 5.23p).
Environmental and Sustainable Sourcing Update
The Group continues to make excellent progress with its
environmental and sustainable sourcing work programmes. These
programmes are consolidated into three main pillars:
-- Reducing the impact of climate change
-- Sustainable sourcing
-- Circular economy and recycling
Progress to date this period on these pillars includes the
following:
-- The Group has completed its largest Solar Panel installation
to date with over 5,000 panels installed on the roof of the new
620,000 sqft warehouse facility at Heerlen in the Netherlands which
are forecast to deliver a saving of almost 1,500 tonnes of CO(2)
per annum
-- The Group's #IAMSUSTAINABLE course, which delivers regional
specific content, is now live in 13 countries and has been
completed by over 14,000 colleagues
-- The Group continues to work with its private label production
partners to extend the use of renewable energy deeper into the
tiers of the supply chain with 51% of factories in China and 73% of
factories in India now using dye houses which have access to
renewable energy
-- The Group has implemented a customer takeback scheme at 15 Go
Outdoors stores. If successful, we will look to expand the scheme
to more than 50 stores by the end of the calendar year
Store Portfolio
During the period, store numbers have moved as follows:
Period New Stores Transfers Disposed Closures Period
Start End
Premium Sports
Fashion
UK & Republic of
Ireland 444 8 1 - (5) 448
Europe 435 41 1 - (3) 474
Asia Pacific 88 4 - - (8) 84
North America 955 24 - - (10) 969
1,922 77 2 - (26) 1,975
------- ----------- ---------- --------- --------- -------
Other Fascias
UK & Republic of
Ireland 70 - (1) (66) - 3
Europe 850 24 (1) - (37) 836
Asia Pacific 8 - - - - 8
North America 289 - - - (11) 278
1,217 24 (2) (66) (48) 1,125
------- ----------- ---------- --------- --------- -------
Total Sports Fashion 3,139 101 - (66) (74) 3,100
------- ----------- ---------- --------- --------- -------
Total Outdoor 251 1 - - (5) 247
Total Group 3,390 102 - (66) (79) 3,347
------- ----------- ---------- --------- --------- -------
In addition, the Group now has 16 JD stores operating under
joint venture arrangements with partners in Indonesia and Israel as
follows:
Period New Stores Period
Start End
Indonesia 7 1 8
Israel 6 2 8
13 3 16
------- ----------- -------
After opening five gyms in the period, the Group now has 91 gyms
with 80 gyms in its principal UK market and 11 gyms in the United
Arab Emirates ('UAE').
Period New Sites Closures Period
Start End
Gyms
JD (UK) 75 2 - 77
X4L (UK) 4 - (1) 3
Total UK 79 2 (1) 80
------- ---------- --------- -------
Gymnation (UAE) 8 3 - 11
------- ---------- --------- -------
Total Gyms 87 5 (1) 91
------- ---------- --------- -------
Neil Greenhalgh
Chief Financial Officer
21 September 2023
Alternative Performance Measures (terms are listed in
alphabetical order)
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 and in accordance with
UK-adopted International Accounting 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
(International Financial Reporting Standard) 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 adjusted items (see below). The Group's
reportable segments under IFRS 8 are Sports Fashion and Outdoor,
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 Earnings per Share
The calculation of basic earnings per share is detailed in Note
5. 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 adjusted items. A reconciliation between basic earnings per
share and adjusted earnings per share is shown below:
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
Basic earnings per share 4.65p 3.58p 2.76p
Adjusted items (0.03p) 1.65p 10.67p
Tax relating to adjusted items - - (0.04p)
----------- ----------- -------------
Adjusted earnings per ordinary share 4.62p 5.23p 13.39p
----------- ----------- -------------
Adjusted Items
For the financial period ended 29 July 2023 (and 52 weeks to 28
January 2023), the Group has used the term 'adjusted items' as
opposed to 'exceptional items' as used in the previous interim
financial period to 30 July 2022 and the definitions of adjusted
items have also been updated. These updates are intended to provide
greater clarity over what is classified as an adjusted item and, by
being more specific in terms of defining adjusted items, results in
the provision of more relevant information with greater
comparability between financial periods. This change has only
affected the presentation of the items within the Adjusted Items
note, the balances in the prior period remain unchanged.
The Group exercises judgement in assessing whether items should
be classified as adjusted 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, 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, it should typically meet
at least one of the following criteria:
-- Impairments of intangible assets and investments recognised on acquisition.
-- It is unusual in nature or outside the normal course of
business (for example, the movement in the present value of put and
call options).
-- Items directly incurred as a result of either an acquisition
or a divestment, or arising from a major business change or
restructuring programme.
The separate reporting of items, which are presented as adjusted
items within the relevant category in the Consolidated Income
Statement, helps provide an indication of the Group's trading
performance. An explanation as to why individual items have been
classified as adjusted is given in Note 3.
Dividend Cover
During the pandemic, the Group took a cautious approach with
regards to dividend pay-outs so as to ensure that that cash
reserves were maintained. As a consequence, in the aftermath of the
pandemic, there was a disconnect between company earnings and
dividend pay-outs. The Board addressed this by way of an enhanced
final dividend for the year ended 28 January 2023 which returned
the dividend cover, when measured relative to the adjusted earnings
per ordinary share, to the levels paid in the period prior to the
pandemic. The Board recognises that JD is a very cash generative
business and is committed to further enhancing returns to
shareholders whilst ensuring that dividend pay-outs sit alongside
other near-term cash outlays such as the minority buyouts of ISRG
and MIG, the impending Courir acquisition and then, further out,
future costs associated with any potential acquisition of the
non-controlling interest in North America. Consequently, the Board
is proposing to increase the interim dividend by more than two-fold
with the split between interim and full year dividends reverting
back to the historic one-third / two-third apportionment in line
with the generation of profits through the year.
Alternative Performance Measures (continued)
Being the number of times that the interim period dividend is
covered by the adjusted earnings per ordinary share.
29 30 July 31 July 1 August 3 August
July 2022 2021 2020 2019
2023
Adjusted earnings per ordinary
share (pence) 4.62 5.23 5.83 1.22 2.51
Interim period dividend per
share (pence) 0.30 0.13 - - 0.06
Dividend cover 15.40 40.23 N/A N/A 41.83
EBITDA Before Adjusted Items
Earnings before interest, tax, depreciation, amortisation and
adjusted items.
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Profit for the period 279.0 216.3 226.7
Addback / (deduct)
Financial expenses 41.0 35.7 77.3
Income tax expense 96.2 82.0 214.2
Depreciation, amortisation and impairment
of non-current assets 318.2 309.3 636.6
Adjusted items (see note 3) (1.7) 85.2 550.5
Financial income (16.1) (1.1) (8.4)
--------- --------- ------------
EBITDA before adjusted items 716.6 727.4 1,696.9
--------- --------- ------------
Gross Capital Expenditure
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Investment in software 8.1 11.0 19.9
Acquisition of property, plant and equipment 197.7 139.9 326.6
Acquisition of non-current other assets 3.3 5.7 12.8
----------- ----------- -------------
Total gross capital expenditure 209.1 156.6 359.3
----------- ----------- -------------
An alternative presentation of this
is as follows: 26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Investment in physical retail fascias
and gyms 119.4 87.4 213.4
Investment in logistics infrastructure 73.3 45.2 80.8
Investment in technology and other 16.4 24.0 65.1
----------- ----------- -------------
Total gross capital expenditure 209.1 156.6 359.3
----------- ----------- -------------
Like-for-Like (LFL) sales
The percentage change in the period-on-period sales, removing
the impact of new store openings and closures in the current or
previous financial period . This metric enables the performance of
the retail stores to be measured on a consistent period-on-period
basis and is a common term used in the industry.
Net Cash / (Debt)
Net cash / (debt) consists of cash and cash equivalents together
with interest-bearing loans, borrowings and lease liabilities. The
group also measures net cash / (financial debt) before lease
liabilities, which is a good indication of the strength of the
Group's Balance Sheet position and is widely used by credit rating
agencies. A reconciliation of net cash / (debt) is provided on page
21.
Alternative Performance Measures (continued)
Operating Costs Before Adjusted Items
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Selling and distribution expenses -
excluding adjusted items 1,664.6 1,496.5 3,315.6
Administrative expenses - excluding
adjusted items 250.2 241.8 497.3
----------- ----------- -------------
Total operating costs before adjusted
items 1,914.8 1,738.3 3,812.9
----------- ----------- -------------
Operating Profit Before Adjusted Items
A reconciliation between operating profit and adjusted items can
be found in the Consolidated Income Statement.
Organic Revenue Growth at Constant Exchange Rates
One of the key measures of performance is the growth in revenues
between reporting periods. Historically, the Group has considered
the growth in revenues on a like-for-like basis which removes the
impact of new store openings and closures in the current or
previous financial period. However, the growth on a like-for-like
basis became less relevant during periods impacted by COVID-19
related trading restrictions, particularly in stores. Consequently,
the consideration of revenues on a like-for-like basis has lacked
context and so the Group has, instead, considered the revenue
performance on a basis which aggregates stores and websites.
Acquisitions and disposals, including the annualisation impact of
acquisitions or disposals in the previous period, are excluded to
ensure that the growth which is reported reflects the same period
of ownership in both reporting periods.
Organic sales growth at constant exchange rates for each
operating segment is calculated as follows for the 26 week period
ended 29 July 2023:
Re-translated
Revenue (1) revenue Acquisitions, Revenue
26 weeks 26 weeks Disposals Organic 26 weeks Organic
to 30 to 30 July & Annualisations Growth to 29 Growth
July 2022 (2) (3) July (4)
2022 2023
----------- -------------- ------------------- ---------- ----------- ----------
Actual Re-translated Actual Actual Actual
GBPm GBPm GBPm GBPm GBPm %
----------- -------------- ------------------- ---------- ----------- ----------
Sports Fashion
(Reportable segment)
Premium Retail
Fascias
UK & ROI 1,114.5 1,117.1 - 85.4 1,202.5 7.6%
Europe 585.1 604.3 7.1 162.4 773.8 26.9%
Asia Pacific 188.6 183.9 - 47.0 230.9 25.6%
North America 1,174.4 1,202.4 - 184.6 1,387.0 15.4%
Other Retail
Fascias
UK & ROI 290.6 290.6 (239.2) 6.7 58.1 2.3%
Europe 525.3 545.2 5.4 46.5 597.1 8.5%
Asia Pacific 0.7 0.7 - 0.7 1.4 100%
North America 118.2 121.1 - 6.1 127.2 5.0%
Non-Retail
Businesses 146.0 146.4 (6.5) (6.0) 133.9 -4.1%
----------- -------------- ------------------- ---------- ----------- ----------
Total Sports
Fashion 4,143.4 4,211.7 (233.2) 533.4 4,511.9 12.7%
Outdoor
(Reportable segment)
Total Outdoor 274.7 274.7 (2.4) (0.3) 272.0 -0.1%
----------- -------------- ------------------- ---------- ----------- ----------
Total Group 4,418.1 4,486.4 (235.6) 533.1 4,783.9 11.9%
----------- -------------- ------------------- ---------- ----------- ----------
1) Being revenues in the 26 week period to 30 July 2022
re-translated at the average exchange rate in the 26 week period to
29 July 2023.
2) Being the net impact of acquisitions and disposals made in
the period and the annualisation of acquisitions made in the prior
period.
3) Being revenue growth for the same period of ownership in both periods.
4) Being organic revenue growth in the 26 week period to 29 July
2023 as a % of the revenues for the 26 week period to 30 July 2022
(as re-translated for current period exchange rates).
Alternative Performance Measures (continued)
Organic sales growth at constant exchange rates for each
operating segment is calculated as follows for the 26 week period
ended 30 July 2022:
Re-translated
Revenue (1) revenue Acquisitions, Revenue
26 weeks 26 weeks Disposals Organic 26 weeks Organic
to 31 to 31 July & Annualisations Growth to 30 Growth
July 2021 (2) (3) July (4)
2021 2022
----------- ---------------- ------------------- ---------- ----------- ----------
Actual Re-translated Actual Actual Actual
GBPm GBPm GBPm GBPm GBPm %
----------- ---------------- ------------------- ---------- ----------- ----------
Sports Fashion
(Reportable segment)
Premium Retail
Fascias
UK & ROI 1,008.3 1,007.0 - 107.5 1,114.5 10.7%
Europe 441.3 431.7 2.9 150.5 585.1 34.9%
Asia Pacific 142.2 144.5 4.3 39.8 188.6 27.5%
North America 1,236.8 1,349.7 4.3 (179.6) 1,174.4 -13.3%
Other Retail
Fascias
UK & ROI 245.9 245.9 21.7 23.0 290.6 9.4%
Europe 347.7 339.4 153.3 32.6 525.3 9.6%
Asia Pacific 0.2 0.2 0.3 0.2 0.7 100%
North America 120.9 131.9 - (13.7) 118.2 -10.4%
Non-Retail
Businesses 107.3 107.3 17.0 21.7 146.0 20.2%
----------- ---------------- ------------------- ---------- ----------- ----------
Total Sports
Fashion 3,650.6 3,757.6 203.8 182.0 4,143.4 4.8%
Outdoor
(Reportable segment)
Total Outdoor 235.2 235.2 18.6 20.9 274.7 8.9%
----------- ---------------- ------------------- ---------- ----------- ----------
Total Group 3,885.8 3,992.8 222.4 202.9 4,418.1 5.1%
----------- ---------------- ------------------- ---------- ----------- ----------
1) Being revenues in the 26 week period to 31 July 2021
re-translated at the average exchange rate in the 26 week period to
30 July 2022.
2) Being the net impact of acquisitions and disposals made in
the period and the annualisation of acquisitions made in the prior
period.
3) Being revenue growth for the same period of ownership in both periods.
4) Being organic revenue growth in the 26 week period to 30 July
2022 as a % of the revenues for the 26 week period to 31 July 2021
(as re-translated for current period exchange rates).
Profit Before Tax and Adjusted Items
A reconciliation between profit before tax and profit before tax
and adjusted items is as follows:
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Profit before tax 375.2 298.3 440.9
Adjusted items (1.7) 85.2 550.5
--------- --------- ------------
Profit before tax and adjusted items 373.5 383.5 991.4
--------- --------- ------------
Unaudited Condensed Consolidated Income Statement
For the 26 weeks to 29 July 2023
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
Note 2023 2022 2023
GBPm GBPm GBPm
Revenue 4,783.9 4,418.1 10,125.0
Cost of sales (2,486.9) (2,277.5) (5,285.3)
----------- ----------- -------------
Gross profit 2,297.0 2,140.6 4,839.7
Selling and distribution expenses
- excluding adjusted items (1,664.6) (1,496.5) (3,315.6)
Administrative expenses - excluding
adjusted items (250.2) (241.8) (497.3)
Administrative expenses - adjusted
items 3 1.7 (85.2) (550.5)
Other operating income 16.2 15.8 33.5
----------- ----------- -------------
Operating profit before financing 400.1 332.9 509.8
Financial income 16.1 1.1 8.4
Financial expenses (41.0) (35.7) (77.3)
----------- ----------- -------------
Profit before tax 375.2 298.3 440.9
Income tax expense (96.2) (82.0) (214.2)
----------- ----------- -------------
Profit for the period 279.0 216.3 226.7
----------- ----------- -------------
Attributable to equity holders
of the parent 239.9 184.5 142.5
Attributable to non-controlling
interests 39.1 31.8 84.2
Basic earnings per ordinary share 5 4.65p 3.58p 2.76p
----------- ----------- -------------
Diluted earnings per ordinary
share 5 4.65p 3.58p 2.76p
----------- ----------- -------------
Operating profit before financing 400.1 332.9 509.8
Adjusted items 3 (1.7) 85.2 550.5
Operating profit before financing
and adjusted items 398.4 418.1 1,060.3
------------------------------------- ------ ------ ----------
Unaudited Condensed Consolidated Statement of Comprehensive
Income
For the 26 weeks to 29 July 2023
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Profit for the period 279.0 216.3 226.7
Other comprehensive (expense) / income:
Items that may be classified subsequently
to the Consolidated Income Statement:
Exchange differences on translation
of foreign operations (76.1) 133.0 129.9
Total other comprehensive (expense)
/ income for the period (76.1) 133.0 129.9
----------- ----------- -------------
Total comprehensive income and expense
for the period
(net of income tax) 202.9 349.3 356.6
----------- ----------- -------------
Attributable to equity holders of
the parent 174.0 290.6 238.4
Attributable to non-controlling interests 28.9 58.7 118.2
----------- ----------- -------------
Unaudited Condensed Consolidated Statement of Financial
Position
As at 29 July 2023
As at As at As at
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Assets
Intangible assets 1,344.7 1,614.8 1,459.4
Property, plant and equipment 963.8 776.0 875.6
Right-of-use assets 2,071.1 2,075.1 2,137.0
Investments in associates and joint
ventures 40.6 42.1 38.8
Other assets 55.4 62.0 56.9
Other receivables 8.4 8.3 8.4
Deferred tax assets 32.1 69.9 12.9
Total non-current assets 4,516.1 4,648.2 4,589.0
---------- ---------- -------------
Inventories 1,625.1 1,428.5 1,466.4
Trade and other receivables 292.1 332.0 263.8
Cash and cash equivalents 1,391.1 1,137.9 1,582.5
---------- ---------- -------------
3,308.3 2,898.4 3,312.7
Assets held-for-sale 92.9 165.7 123.0
Total current assets 3,401.2 3,064.1 3,435.7
---------- ---------- -------------
Total assets 7,917.3 7,712.3 8,024.7
---------- ---------- -------------
Liabilities
Interest-bearing loans and borrowings (82.2) (83.0) (75.2)
Lease liabilities (432.0) (395.8) (423.8)
Trade and other payables (1,439.4) (1,406.9) (1,471.2)
Put and call option liabilities (495.5) - -
Provisions (7.7) (13.0) (9.7)
Income tax liabilities (2.3) (4.3) (17.5)
---------- ---------- -------------
(2,459.1) (1,903.0) (1,997.4)
Liabilities directly associated with
assets held-for-sale (39.3) (139.2) (165.6)
Total current liabilities (2,498.4) (2,042.2) (2,163.0)
---------- ---------- -------------
Interest-bearing loans and borrowings (32.4) (41.8) (38.0)
Lease liabilities (1,840.0) (1,903.4) (1,915.4)
Other payables (85.7) (100.5) (102.4)
Put and call option liabilities (822.0) (815.9) (1,061.2)
Provisions (25.1) (22.7) (21.1)
Deferred tax liabilities (109.8) (124.6) (90.2)
Total non-current liabilities (2,915.0) (3,008.9) (3,228.3)
---------- ---------- -------------
Total liabilities (5,413.4) (5,051.1) (5,391.3)
---------- ---------- -------------
Total assets less total liabilities 2,503.9 2,661.2 2,633.4
---------- ---------- -------------
Unaudited Condensed Consolidated Statement of Financial Position
(continued)
As at 29 July 2023
As at As at As at
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Capital and reserves
Issued ordinary share capital 2.5 2.5 2.5
Share premium 467.5 467.5 467.5
Retained earnings 2,193.6 2,076.8 2,011.4
Put and call option reserve (694.2) (425.4) (417.9)
Share-based payment reserve 0.5 - 0.3
Foreign currency translation reserve (10.2) 65.9 55.7
---------- ---------- -------------
Total equity attributable to equity
holders of the parent 1,959.7 2,187.3 2,119.5
Non-controlling interest 544.2 473.9 513.9
---------- ---------- -------------
Total equity 2,503.9 2,661.2 2,633.4
---------- ---------- -------------
Unaudited Condensed Consolidated Statement of Changes in
Equity
For the 26 weeks to 29 July 2023
Put Share-based Foreign Total equity
Ordinary and call payment currency attributable
share Share Retained option reserve translation to equity
capital premium earnings reserveGBPm GBPm reserve holders
GBPm GBPm GBPm GBPm of the
parent
GBPm
Balance at 28
January
2023 2.5 467.5 2,011.4 (417.9) 0.3 55.7 2,119.5
Profit for the
period - - 239.9 - - - 239.9
Other
comprehensive
income:
Exchange
differences
on translation
of
foreign
operations - - - - - (65.9) (65.9)
Total other
comprehensive
income - - - - - (65.9) (65.9)
----------- ---------- ----------- -------------- -------------- -------------- -------------
Total
comprehensive
income for the
period - - 239.9 - - (65.9) 174.0
Dividends to
equity
holders - - (34.6) - - - (34.6)
Put and call
options
held with
non-controlling
interests - - - (428.8) - - (428.8)
Put and call
options
lapsed - - - 138.6 - - 138.6
Divestment of
put
and call
options - - - 13.9 - - 13.9
Derecognition of
put and call
options
for disposed
entities - - (6.1) - - - (6.1)
Share-based
payment
charge - - - - 0.2 - 0.2
Divestment of
non-controlling
interests - - (0.6) - - - (0.6)
Acquisition of
non-controlling
interests - - (16.4) - - - (16.4)
Balance at 29
July
2023 2.5 467.5 2,193.6 (694.2) 0.5 (10.2) 1,959.7
----------- ---------- ----------- -------------- -------------- -------------- -------------
Total equity
attributable Non-
to controlling Total
equity holders Interest equity
of the parent GBPm GBPm
GBPm
Balance at 28 January 2023 2,119.5 513.9 2,633.4
Profit for the period 239.9 39.1 279.0
Other comprehensive income:
Exchange differences on translation of
foreign operations (65.9) (10.2) (76.1)
Total other comprehensive income (65.9) (10.2) (76.1)
---------------- -------------- ---------
Total comprehensive income for the period 174.0 28.9 202.9
Dividends to equity holders (34.6) (2.1) (36.7)
Put and call options held with non-controlling
interests (428.8) - (428.8)
Put and call options lapsed 138.6 - 138.6
Divestment of put and call options 13.9 - 13.9
Derecognition of put and call options for
disposed entities (6.1) - (6.1)
Share-based payment charge 0.2 - 0.2
Divestment of non-controlling interests (0.6) (1.6) (2.2)
Acquisition of non-controlling interests (16.4) 5.1 (11.3)
Balance at 29 July 2023 1,959.7 544.2 2,503.9
---------------- -------------- ---------
Unaudited Condensed Consolidated Statement of Changes in Equity
(continued)
For the 26 weeks to 30 July 2022
Put Share-based Foreign Total equity
Ordinary and call payment currency attributable
share Share Retained option reserve translation to equity
capital premium earnings reserveGBPm GBPm reserve holders
GBPm GBPm GBPm GBPm of the
parent
GBPm
Balance at 29
January
2022 2.5 467.5 1,910.6 (414.5) 0.1 (40.2) 1,926.0
Profit for the
period - - 184.5 - - - 184.5
Other
comprehensive
income:
Exchange
differences
on translation
of
foreign
operations - - - - - 106.1 106.1
Total other
comprehensive
income - - - - - 106.1 106.1
----------- ---------- ----------- -------------- -------------- -------------- -------------
Total
comprehensive
income for the
period - - 184.5 - - 106.1 290.6
Dividends to
equity
holders - - (18.3) - - - (18.3)
Put and call
options
held with
non-controlling
interests - - - (10.9) - - (10.9)
Share-based
payment
charge - - - - (0.1) - (0.1)
Acquisition of - - - - - - -
non-controlling
interests
Balance at 30
July
2022 2.5 467.5 2,076.8 (425.4) - 65.9 2,187.3
----------- ---------- ----------- -------------- -------------- -------------- -------------
Total equity
attributable Non-
to controlling Total
equity holders Interest equity
of the parent GBPm GBPm
GBPm
Balance at 29 January 2022 1,926.0 413.6 2,339.6
Profit for the period 184.5 31.8 216.3
Other comprehensive income:
Exchange differences on translation of
foreign operations 106.1 26.9 133.0
Total other comprehensive income 106.1 26.9 133.0
---------------- -------------- ---------
Total comprehensive income for the period 290.6 58.7 349.3
Dividends to equity holders (18.3) - (18.3)
Put and call options held with non-controlling
interests (10.9) - (10.9)
Share-based payment charge (0.1) - (0.1)
Acquisition of non-controlling interests - 1.6 1.6
Balance at 30 July 2022 2,187.3 473.9 2,661.2
---------------- -------------- ---------
Unaudited Condensed Consolidated Statement of Cash Flows
For the 26 weeks ended 29 July 2023
26 weeks 26 weeks 52 weeks
to to 30 July to
29 July 2022 28 January
2023 GBPm 2023
GBPm GBPm
Cash flows from operating activities
Profit for the period 279.0 216.3 226.7
Income tax expense 96.2 82.0 214.2
Financial expenses 41.0 35.7 77.3
Financial income (16.1) (1.1) (8.4)
Depreciation and amortisation of
non-current assets 316.5 309.1 633.2
Forex (gains) / losses on monetary
assets and liabilities (2.3) 9.5 2.5
Impairment of other non-current
assets (non-adjusted items) 1.7 0.2 3.4
Loss on disposal of non-current
assets 2.5 2.2 5.1
Other adjusted items (9.6) 48.7 407.3
Impairment of goodwill and fascia
names (adjusted items) 3 7.9 22.9 117.6
Impairment of other non-current
assets (adjusted items) 3 - 13.6 25.6
Share of profit of equity-accounted
investees, net of tax (3.1) (0.8) (4.9)
Increase in inventories (213.1) (401.0) (501.3)
Increase in trade and other receivables (30.7) (103.4) (42.2)
(Decrease)/increase in trade and
other payables (22.8) 43.2 177.1
Interest paid (4.2) (3.6) (8.4)
Lease interest (36.8) (32.1) (68.9)
Income taxes paid (109.4) (71.6) (174.4)
---------- ------------ ------------
Net cash from operating activities 296.7 169.8 1,081.5
---------- ------------ ------------
Cash flows from investing activities
Interest received 16.1 1.1 8.4
Proceeds from sale of non-current
assets 3.5 4.5 11.5
Investment in software (8.1) (11.0) (19.9)
Acquisition of property, plant and
equipment (197.7) (139.9) (326.6)
Acquisition of non-current other
assets (3.3) (5.7) (12.8)
Drawdown of finance lease liabilities 0.1 4.1 7.5
Dividends received from equity-accounted
investees - 3.0 3.4
Cash consideration of divestments
(net of cash divested) (61.3) - 59.6
Deferred consideration paid (3.6) - (29.2)
Investments in associates and joint
ventures - - (2.8)
Acquisition of subsidiaries, net
of cash acquired - (11.6) (20.0)
Net cash used in investing activities (254.3) (155.5) (320.9)
---------- ------------ ------------
Cash flows from financing activities
Repayment of interest-bearing loans
and borrowings (39.4) (21.7) (37.4)
Drawdown of interest-bearing loans
and borrowings 32.8 12.5 15.5
Repayment of lease liabilities (188.0) (193.8) (400.5)
Divestment of non-controlling interests - - 0.1
Acquisition of non-controlling interests (12.4) - (29.3)
Equity dividends paid - - (24.8)
Dividends paid to non-controlling
interests in subsidiaries (2.1) (0.2) (2.8)
---------- ------------ ------------
Net cash used in financing activities (209.1) (203.2) (479.2)
---------- ------------ ------------
Unaudited Condensed Consolidated Statement of Cash Flows
(continued)
For the 26 weeks ended 29 July 2023
26 weeks 26 weeks 52 weeks
to 29 July to to
2023 30 July 28 January
GBPm 2022 2023
GBPm GBPm
Net (decrease) / increase in cash
and cash equivalents (166.7) (188.9) 281.4
Cash and cash equivalents at the
beginning of the period 1,548.9 1,280.4 1,280.4
Foreign exchange (losses) / gains
on cash and cash equivalents (38.3) 4.6 (12.9)
------------ --------- ------------
Cash and cash equivalents at the
end of the period 1,343.9 1,096.1 1,548.9
------------ --------- ------------
Analysis of Net Cash
As at 29 July 2023
At At
28 January Non-cash 29 July
2023 Cash flow movements 2023
GBPm GBPm GBPm GBPm
Cash at bank and in hand 1,582.5 (153.1) (38.3) 1,391.1
Overdrafts (33.6) (13.6) - (47.2)
------------ ------------ ------------ ------------
Cash and cash equivalents 1,548.9 (166.7) (38.3) 1,343.9
------------ ------------ ------------ ------------
Interest-bearing loans and
borrowings:
Bank loans (79.6) 6.6 5.6 (67.4)
Net cash / (financial debt)
before lease liabilities 1,469.3 (160.1) (32.7) 1,276.5
------------ ------------ ------------ ------------
Lease liabilities (2,339.2) 188.0 (120.8) (2,272.0)
------------ ------------ ------------ ------------
Net (debt) / cash (869.9) 27.9 (153.5) (995.5)
------------ ------------ ------------ ------------
1. Basis of Preparation
JD Sports Fashion Plc (the 'Company') is a company incorporated
and domiciled in the United Kingdom. The unaudited half year
financial report for the 26 week period to 29 July 2023 represents
that of the Company and its subsidiaries (together referred to as
the 'Group').
This half year financial report is an interim management report
as required by DTR 4.2.3 of the Disclosure and Transparency
Rules of the UK's Financial Conduct Authority and was authorised
for issue by the Board of Directors on 21 September 2023. The
condensed set of financial statements included in this half year
financial report has been prepared in accordance with IAS 34
'Interim Financial Reporting'. The annual financial statements of
the Group are prepared in accordance with UK-adopted International
Accounting Standards. The comparative figures for the 52 week
period to 28 January 2023 are not the Group's statutory accounts
for that financial period. Those accounts have been reported on by
the Group's Auditor and delivered to the Registrar of Companies.
The Report of the Auditor was (i) unqualified, (ii) did not include
a reference to any matters to which the Auditor drew attention by
way of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498 of the Companies Act
2006.
The information contained in the half year financial report for
the 26 week period to 29 July 2023 has not been audited or reviewed
by auditors pursuant to the Auditing Practices Board guidance on
"Review of interim financial information" and do not include all of
the information required for full annual financial statements.
As required by the Disclosure and Transparency Rules of the UK's
Financial Conduct Authority, the half year financial report has
been prepared by applying the same accounting policies and
presentation that were applied in the preparation of the
Company's published consolidated financial statements for the 52
week period to 28 January 2023.
Adoption of New and Revised Standards
The Group continues to monitor the potential impact of other new
standards and interpretations which have been or may be endorsed
and require adoption by the Group in future reporting periods. The
following amendments to accounting standards and interpretations,
issued by the International Accounting Standards Board ('IASB'),
have been adopted for the first time by the Group in the period
with no significant impact on the consolidated results or financial
position:
- Amendments to IAS 12 Income Taxes - International Tax Reform - Pillar Two Model Rules
Pillar II approach
The Group has continued to monitor developments in relation to
the OECD's Two Pillar Solution to Address the Tax Challenges
arising from the Digitalisation of the Economy ("Pillar 2 rules").
The UK substantively enacted Pillar 2 legislation on 20 June 2023.
The first accounting period the UK rules will apply to the Group
will be the period ending 1 February 2025. Given the rules are not
yet final across all territories, it has not been possible to carry
out a full assessment of the potential impact on the future tax
charge of the Group, however, it is not expected to be
material.
Revenue Recognition - Delivery Income
During the 52 week period ended 28 January 2023, management
reviewed its accounting for the delivery income relating to online
sales. Consequently, in the current 26 week period ended 29 July
2023, GBP26.0 million of delivery income relating to online sales
has been shown as revenue (52 week period ended 28 January 2023:
GBP64.7 million). In the prior 26 week period ended 30 July 2022,
the delivery income of GBP29.8 million was included within selling
and distribution expenses (as a credit). The prior period has not
been restated as the amount of the delivery income was not
considered to be material.
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 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 adjusted items. Adjusted 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 adjusted items, which are
presented as adjusted 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 adjusted is given in Note 3.
Critical Accounting Estimates and Judgements
The preparation of interim financial statements 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 about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates. The estimates and judgements disclosed below are those
which have a significant risk of causing a material adjustment to
the carrying amount of assets and liabilities.
1. Basis of Preparation (continued)
Critical Accounting Estimates and Judgements (continued)
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements for the 52 week period to 28
January 2023.
Previous Accounting Estimate
In previous financial periods, the Group estimated the present
value of the exercise price of the put and call options using Board
approved forecasts multiplied by an earnings multiple. The option
formula and multiple are stated in the option agreements with the
exception of the ISRG option which does not have a multiple stated
in the agreement. In the absence of a specified formula or
multiple, the Group estimated this based on current evidence in the
Mergers & Acquisitions market and our past experience of
multiples paid for similar businesses. These forecast cash flows
were discounted using a discount rate reflecting the current market
assessment of the time value of money and any specific risk
premiums relevant to the individual businesses involved. These
discount rates were considered to be equivalent to the rates a
market participant would use.
Current Accounting Estimate
For the 52 week period ended 28 January 2023, a change in the
accounting estimation methodology was introduced using a
third-party valuation expert to independently determine the present
value of the exercise price of the material put and call options.
The revised approach uses a Monte-Carlo simulation model applying a
geometric Brownian motion to project the share price and arithmetic
Brownian motion for the projection of EBITDA. This was considered
to be a more suitable method of valuation given how material the
put and call options are in terms of value and the Directors
consider that this statistical based approach better accounts for
the variability in assumptions and risk. Previously, the Group used
a singular forecast model whereby the risk was dealt with via the
discount rate premia. The Monte-Carlo model is considered to be
more sophisticated in its simulation of historical and forecast
data and earnings volatility to assess potential impacts across a
wide range of future scenarios. The Monte-Carlo method has been
used for the period ended 29 July 2023.
Change in Accounting Estimate
The Group considers that the change in accounting estimate was a
result of a modification in estimating techniques, rather than a
change in policy and therefore it was accounted for prospectively,
in accordance with IAS 8. During the 26 week period to 30 July 2022
the previous accounting estimate method was applied.
Other Accounting Judgements
Groups of Cash-Generating Units ('Group CGUs')
The cash-generating units used to monitor goodwill and test it
for impairment are the store portfolios and individual businesses.
The cash-generating units are referred to throughout the Annual
Report as Group CGUs. Online sales channels are included at a Group
CGU level rather than allocating to individual stores as these
cashflows are not considered to be independent with no reasonable
basis of allocation. Corporate assets that contribute to the future
cash flows of more than one Group CGU are allocated to each Group
CGU on a pro-rata basis based on forecast turnover. This allocation
method has been applied consistently.
Other Accounting Estimates
Impairment of Goodwill and Other Intangible Assets
Goodwill is allocated to the groups of cash-generating units
('Group CGUs'), that are expected to benefit from the synergies of
the business combination from which goodwill arose, being
portfolios of stores or individual businesses. Other intangible
assets arising on acquisition, such as fascia names, brand names
and customer relationships are also allocated to the Group CGUs.
The recoverable amount, including the portion of the corporate
assets, is compared with the carrying amount of the Group CGU
including goodwill. The recoverable amount of an asset or Group CGU
is the greater of its value in use and its fair value less costs of
disposal. Value in use is based on the estimated future cash flows,
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset or Group CGU.
Impairment of Brand Licences
At each reporting date, the Group reviews the carrying amounts
of its brand licences to determine whether there is any indication
of impairment. If any such indication exists, then the asset's
recoverable amount is estimated. Impairment losses are recognised
within administrative expenses in the Consolidated Income
Statement. The recoverable amount of brand licences is determined
based on value-in-use calculations. The use of this method requires
the estimation of future cash flows expected to arise from the
continuing operation of the relevant asset until the licence expiry
date and the choice of a suitable discount rate in order to
calculate the present value.
Income Tax
In accordance with IAS 34 Interim Financial Reporting, the
Group's tax charge has been calculated by applying the forecast
annual effective corporate income tax rate on a jurisdictional
basis to the relevant pre-tax income for the 26 weeks to 29 July
2023. Adjusting items that occurred in the interim period have been
accounted for.
Tax provisions have been recognised in respect of uncertain tax
positions where there is a risk of an additional tax liability
arising. The effective tax rate was 25.7% for the 26 weeks to 29
July 2023. This is lower than the effective tax rate of 27.5% for
the 26 weeks to 30 July 2022. The prior period effective tax rate
was higher as a result of one-off adjusting items.
1. Basis of Preparation (continued)
Income Tax (continued)
The effective tax rate for the 26 weeks to 29 July 2023 was
higher than the UK mainstream hybrid rate of 24% (2022: 19%) due to
the non-qualifying impairment of assets held for sale +0.5% (2022:
+2.3%), the movement in unrecognised timing differences +1.2%
(2022: +0.5%), profits that have arisen in jurisdictions that have
a higher rate of corporate and local taxes than the UK +0.6% (2022:
+4.5%) and tax relief claims under government incentives including
R&D and enhanced capital expenditure -0.6% (2022: -0.4%). The
impact of these adjustments has fallen when compared to the prior
period because of the increase in the UK mainstream rate.
Risks and Uncertainties
The Board has considered the risks and uncertainties for the
remaining 27 week period to 3 February 2024 and determined that the
risks presented in the Annual Report and Accounts 2023 noted below,
remain relevant:
- Strategic risk
- Supply chain
- Environmental and social
- Governance
- Retail property factors
- Personnel
- Treasury and financial
- Technology
- Cyber risk/Data breach
- Cost of living crisis
- Expansion risk
A major variable, and therefore risk, to the Group's financial
performance for the remainder of the financial period is the sales
and margin performance in the retail fascias, particularly in
December and January.
Going Concern
The Directors have prepared the Group financial statements on a
going concern basis. At 29 July 2023, the Group had net cash (1)
balances of GBP1,276.5 million (28 January 2023: GBP1,469.3
million) with available committed UK borrowing facilities of GBP700
million (28 January 2023: GBP700 million) of which GBPnil (28
January 2023: GBPnil) has been drawn down and US facilities of
approximately $300 million of which $nil was drawn down (28 January
2023: $nil).
These facilities are subject to certain covenants. With a UK
facility of GBP700 million available up to 6 November 2026 and a US
facility of approximately $300 million available up until 24
September 2026, the Directors believe that the Group is well placed
to manage its business risks successfully despite the current
uncertain economic outlook. The Group had net cash (1) balances of
GBP1,209.2 million and GBPnil drawn down on the facilities as at 11
September 2023.
The Directors have prepared cash flow forecasts for the Group
covering a period of at least 12 months from the date of approval
of the Group financial statements, including specific consideration
of a range of impacts that could arise from geopolitical tensions
and the actual and potential impact on inflationary cost pressures.
These forecasts indicate that the Group will be able to operate
within the level of its agreed facilities and covenant compliance.
A reverse stress test has also been performed, which assumes a
reduction in revenue of 37% is required for the Group to run out of
cash and be fully drawn down on the available facilities / to
breach a covenant. This is not considered to be plausible.
For the purposes of Going Concern Reporting, the Directors have
prepared severe but plausible downside scenarios which cover the
same period as the base case, including specific consideration of a
range of impacts that could arise from a significant business
continuity event adversely impacting one of the Group's main
Distribution Centres and peak trading. Further, the Directors have
modelled the impact of a significant cyber-attack resulting in a
significant proportion of the Group's stores being unable to trade
for a period of one month, impacting the peak trading period of
December 2023. As part of this analysis, mitigating actions within
the Group's control, should these severe but plausible scenarios
occur, have also been considered, including reductions in capital
expenditure, discretionary spend and dividends. The Directors have
also considered the impact on the base case and severe but
plausible downside scenarios, of the acquisition activity recently
announced in respect of acquiring the remaining shares in the
Group's existing subsidiaries, Iberian Sports Retail Group S.L. and
Marketing Investment Group S.A. plus the proposed acquisition of
100% of Groupe Courir S.A.S which is conditional on the receipt of
merger control approval.
The forecast cash flows in the severe but plausible downside
scenarios indicate that there remains sufficient headroom for the
Group to operate within the committed facilities and to comply with
all relevant banking covenants during the forecast period.
The Directors have considered all of the factors noted above and
are confident that the Group has adequate resources to continue to
meet all liabilities as and when they fall due for a period of at
least 12 months from the date of approval of these financial
statements. Accordingly, the financial statements have been
prepared on a going concern basis.
1. Basis of Preparation (continued)
Other Accounting Policies
Government Support
Government support is recognised in the Consolidated Financial
Statements when it can be reliably measured, which the Group
considers to be on receipt. During the period ended 30 July 2022
(and 52 week period ended 28 January 2023), the Group repaid the
GBP24.4 million of furlough income that it received from the UK
Government in the 52 week period ended 29 January 2022. The
repayment was accrued for as at 29 January 2022 and was shown as an
expense within employed staff costs.
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 Chief Operating Decision
Maker to allocate resources to the segments and to assess their
performance. The Chief Operating Decision Maker is considered to be
the Chief Executive Officer of JD Sports Fashion Plc.
Information reported to the Chief Operating Decision Maker is
focused on the nature of the businesses within the Group. The
Group's reportable segments under IFRS 8 are Sports Fashion and
Outdoor. In accordance with IFRS 8.12, we have aggregated several
operating segments with similar economic characteristics into a
larger Sports Fashion operating 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 the larger Sports
Fashion operating segment, we have primarily taken into
consideration:
-- IFRS 8.12.a the nature of products or services;
-- IFRS 8.12.c type or class of customer; and
-- IFRS 8.12.d the methods used to distribute their products.
The entities included in the Sports Fashion operating segment
have similar characteristics as well-established, leading retailers
or wholesalers of footwear, apparel and accessories from a mix of
international sports fashion brands and private labels. When
determining what to include within the Sports Fashion segment, we
have considered that the fascias all target a similar demographic
in terms of both age range and an aspiration to achieve a certain
style, whether the product is to be used for lifestyle wear or
active sports participation. The entities typically have similar
economic characteristics in terms of sales metrics, long-term
average gross margins, levels of capital investment and operating
cash flows. The Outdoor segment differs from the Sports Fashion
segment in that Outdoor is focused on retailing specialist apparel,
footwear and technical products for outdoor pursuits. Further, the
Outdoor segment typically appeals to an older and/or
family-oriented demographic as compared with the younger and more
style-focused demographic targeted by the Sports Fashion
businesses.
The Chief Operating Decision Maker receives and reviews
segmental operating profit. Certain central administrative costs
including Group Directors' salaries are included within the Group's
Sports Fashion result. This is consistent with the results as
reported to the Chief Operating Decision Maker.
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.
The Board considers that certain items are cross-divisional in
nature and cannot be allocated between the segments on a meaningful
basis. Certain net funding costs are treated as unallocated,
reflecting the nature of the Group's syndicated borrowing
facilities. The eliminations remove intercompany transactions and
balances between different segments which primarily relate to the
net drawdown of long-term loans and short-term working capital
funding provided by JD Sports Fashion Plc (within Sports Fashion)
to other companies in the Group, and intercompany trading between
companies in different segments. Inter-segment transactions are
undertaken in the ordinary course of business on arm's length
terms.
2. Segmental Analysis (continued)
Business Segments
Information regarding the Group's reportable operating segments
for the 26 weeks to 29 July 2023 is shown below:
Income statement
Sports
Fashion Outdoor Unallocated Total
GBPm GBPm GBPm GBPm
Revenue 4,511.9 272.0 - 4,783.9
----------- ------------ ---------------- ------------
Gross profit % 48.4% 43.3% 48.0%
Operating profit / (loss)
before adjusted items 398.6 (0.2) - 398.4
Adjusted items 1.7 - - 1.7
----------- ------------ ---------------- ------------
Operating profit / (loss) 400.3 (0.2) - 400.1
Financial income - - 16.1 16.1
Financial expenses (35.5) (1.3) (4.2) (41.0)
----------- ------------ ---------------- ------------
Profit / (loss) before tax 364.8 (1.5) 11.9 375.2
Income tax expense (96.2)
----------- ------------ ---------------- ------------
Profit for the period 279.0
----------- ------------ ---------------- ------------
Sports Fashion Outdoor Eliminations Total
GBPm GBPm GBPm GBPm
Total assets 7,733.8 397.5 (214.0) 7,917.3
Total liabilities (5,288.5) (338.9) 214.0 (5,413.4)
--------------- -------- ------------- ----------
Total segment net assets 2,445.3 58.6 - 2,503.9
--------------- -------- ------------- ----------
2. Segmental Analysis (continued)
The comparative segmental results for the 26 weeks to 30 July
2022 are as follows:
Income statement
Sports
Fashion Outdoor Unallocated Total
GBPm GBPm GBPm GBPm
Revenue 4,143.4 274.7 - 4,418.1
----------- ------------ ---------------- ------------
Gross profit % 49.0% 42.2% - 48.5%
Operating profit before adjusted
items 412.7 5.4 - 418.1
Adjusted items (85.2) - - (85.2)
----------- ------------ ---------------- ------------
Operating profit 327.5 5.4 - 332.9
Financial income - - 1.1 1.1
Financial expenses (30.7) (1.4) (3.6) (35.7)
----------- ------------ ---------------- ------------
Profit / (loss) before tax 296.8 4.0 (2.5) 298.3
Income tax expense (82.0)
----------- ------------ ---------------- ------------
Profit for the period 216.3
----------- ------------ ---------------- ------------
Sports Fashion Outdoor Unallocated Eliminations Total
GBPm GBPm (i) GBPm GBPm
GBPm
Total assets 7,265.5 483.1 - (36.3) 7,712.3
Total liabilities (4,818.7) (268.7) - 36.3 (5,051.1)
--------------- -------- ------------ ------------- ----------
Total segment net
assets 2,446.8 214.4 - - 2,661.2
--------------- -------- ------------ ------------- ----------
(i) Certain prior period amounts have been reclassified for
consistency with the current period presentation. These
reclassifications had no effect on the reported results of
operations. A presentational adjustment was made between
Unallocated, Sports Fashion and Outdoor, with amounts reported in
the 2022 unaudited interim results previously designated as
Unallocated now designated to either Sports Fashion or Outdoor.
These items were a deferred tax asset of GBP69.9 million, a
deferred tax liability of GBP124.6 million and an income tax
liability of GBP4.3 million.
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, South Korea, Spain
and the Canary Islands, Sweden, Thailand, the UAE and the US.
Revenue analysis
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
29 July to
2023 30 July
GBPm 2022
GBPm
UK & ROI 1,608.1 1,748.0
Europe 1,399.8 1,152.5
North America 1,520.4 1,300.4
Rest of
world 255.6 217.2
----------------- ------------ ---------
4,783.9 4,418.1
--------------- ------------ ---------
The revenue from any individual country, with the exception of
the UK & US, is not more than 10% of the Group's total
revenue.
The following table provides analysis of the Group's revenue by
channel:
26 weeks to 26 weeks
29 July to
2023 30 July
GBPm 2022
GBPm
Retail
stores 3,634.4 3,233.5
Multichannel 1,006.7 1,033.4
Other (ii) 142.8 151.2
---------------- -------------- -----------
4,783.9 4,418.1
-------------- -------------- -----------
(ii) Other relates to revenue from leisure club memberships and
wholesale revenue.
The following table provides analysis of the Group's revenue by
product type:
26 weeks to 26 weeks
29 July to
2023 30 July
GBPm 2022
GBPm
Footwear 2,743.9 2,397.3
Apparel 1,490.2 1,533.1
Accessories 298.9 270.0
Other (iii) 250.9 217.7
--------------- -------------- -----------
4,783.9 4,418.1
------------- -------------- -----------
(iii) Other relates to revenue from sales of outdoor living
equipment, delivery income and revenue from leisure club
memberships.
2. Segmental Analysis (continued)
Non-current assets analysis
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 to 26 weeks
29 July to
2023 30 July
GBPm 2022
GBPm
UK & ROI 1,208.8 1,314.0
Europe 1,538.5 1,387.0
North America 1,672.1 1,791.8
Rest of world 96.7 155.4
Unallocated - -
(iv)
------------------ ------- -------------- -----------
4,516.1 4,648.2
----------- ----------------- -------------- -----------
(iv) Certain prior period amounts have been reclassified for
consistency with the current period presentation. These
reclassifications had no effect on the reported results of
operations. A presentational adjustment was made between
Unallocated and the geographical areas listed above with the
deferred tax asset of GBP69.9 million reported in the 2022
financial statements previously designated as Unallocated now
designated to the appropriate geographical area.
3. Adjusted Items
The Group exercises judgement in assessing whether items should
be classified as adjusted 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 intangible assets and investments recognised on acquisition.
-- It is unusual in nature or outside the normal course of
business (for example, the movement in the present value of put and
call options).
-- Items directly incurred as a result of either an acquisition
or a divestment or arising from a major business change or
restructuring programme.
The separate reporting of items, which are presented as adjusted
items within the relevant category in the Consolidated Income
Statement, helps provide an indication of the Group's trading
performance.
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Impairment of intangible assets
and investments (1) 7.9 36.5 137.2
Items that are unusual in nature
or outside of the normal course of
business:
Movement in present value of put
and call options (2) (25.0) 40.2 296.2
Items as a result of acquisitions,
divestments, major business changes
or restructuring:
Divestment and restructuring (3) 15.4 8.5 129.6
Deferred consideration release (4) - - (12.5)
Administrative expenses - adjusted
items (1.7) 85.2 550.5
--------- --------- ------------
1. The impairment in the current period relates to the
impairment of goodwill arising in a prior period on the acquisition
of GymNation (GBP7.9 million) which has been classified as
held-for-sale as at 29 July 2023 (see Note 8). The impairment in
the prior period primarily relates to the impairment of goodwill
and fascia name arising in a prior period on the acquisition of
Missy Empire (GBP10.2 million) and Hairburst (GBP12.7 million).
Also included in the prior period is an impairment charge for the
investment in the Group's joint venture, Gym King (GBP13.6
million).
2. Movement in the present value of the liabilities in respect
of put and call options as re-measured at each reporting date is a
net credit of GBP25.0 million, comprising Genesis Topco Inc credit
of GBP35.8 million of which GBP29.0 million relates to foreign
exchange differences driven by improvements in USD:GBP as the
option is denominated in USD (2022: charge of GBP28.7 million),
Iberian Sports Retail Group charge of GBPnil (2022: charge of
GBP16.8 million), Marketing Investment Group S.A charge of GBP14.3
million (2022: GBPnil) and a credit of GBP3.5 million (2022: credit
of GBP5.3 million) in relation to the other put and call options
held by non-controlling interests.
3. The divestment and restructuring loss of GBP15.4 million
primarily relates to the loss on disposal of 80s Casual Classics of
GBP9.5 million. The balance comprises further losses in respect of
the disposal of the non-core fashion businesses to Frasers, which
were completed in the current financial period (see Note 7 for
divestments). The divestment and restructuring charge in the prior
period relates to the divestment of Footasylum (GBP8.5
million).
4. Acquisition related release of contingent consideration for
Leisure Lakes (GBP10.5 million) and Total Swimming Holdings Limited
(GBP2.0 million).
4. Dividends
Dividend distribution to the Company's shareholders is
recognised as a liability in the financial statements in the period
in which it is approved. After each reporting date, the following
dividends were proposed by the Directors. The dividends were not
provided for at each reporting date.
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
0.30 pence per ordinary share (30
July 2022: 0.13 pence, 28 January
2023: 0.67 pence) 15.5 6.7 34.6
----------- ----------- -------------
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
Dividends on Issued Ordinary Share 2023 2022 2023
Capital GBPm GBPm GBPm
Final dividend of 0.67 pence (30
July 2022: nil pence, 28 January
2023: 0.35 pence) per qualifying
ordinary share paid in respect of
prior period but not recognised
as a liability in that period 34.6 - 18.1
Interim dividend of nil pence (30
July 2022: nil, 28 January 2023:
0.13 pence) - - 6.7
----------- ----------- -------------
34.6 - 24.8
----------- ----------- -------------
5. Earnings per Ordinary Share
Basic and Adjusted Earnings per Ordinary Share
On 20 December 2022, JD Sports Fashion Plc completed the placing
of new ordinary shares in the capital of the Company. A total of
25,000,000 new ordinary shares were issued, increasing the total
ordinary shares in issue to 5,183,135,745.
The calculation of basic earnings per ordinary share at 29 July
2023 is based on the profit for the period attributable to equity
holders of the parent of GBP239.9 million (26 weeks to 30 July
2022: GBP184.5 million ; 52 weeks to 28 January 2023: GBP142.5
million ) and a weighted average number of ordinary shares
outstanding during the 26 week period ended 29 July 2023 of
5,158,497,877 ( 26 weeks to 30 July 2022 of 5,158,135,745; 52 weeks
to 28 January 2023 of 5,158,497,877 ). Adjusted 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 certain adjusted items.
The Directors consider that this gives a more useful measure of the
trading performance and profitability of the Group.
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
Number Number Number
millions millions millions
Issued ordinary shares at beginning
of period 5,183.1 5,158.1 5,158.1
Ordinary shares issued on 20
December 2022 - - 25.0
----------- ----------- -------------
Issued ordinary shares at end
of period 5,183.1 5,158.1 5,183.1
----------- ----------- -------------
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
Note 2023 2022 2023
GBPm GBPm GBPm
Profit for the period attributable
to equity holders of the parent 239.9 184.5 142.5
Adjusted items 3 (1.7) 85.2 550.5
Tax relating to adjusted items - (0.1) (2.4)
Profit for the period attributable
to equity holders of the parent
excluding adjusted items 238.2 269.6 690.6
------------ ------------ ------------
Adjusted earnings per ordinary
share 4.62p 5.23p 13.39p
------------ ----------- -------------
Basic earnings per ordinary share 4.65p 3.58p 2.76p
-------- ------- ------
5. Earnings per Ordinary Share (continued)
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
Number Number Number
millions millions millions
Weighted average number of ordinary
shares at beginning of period 5,158.5 5,158.1 5,158.1
Effect of ordinary shares issued
on 20 December 2022 - - 2.8
Effect of ordinary shares held
by the JD Sports Employee Benefit
Trust as treasury shares [1] - - (2.4)
Issued ordinary shares at end
of period 5,158.5 5,158.1 5,158.5
----------- ----------- -------------
Diluted Earnings per Ordinary Share
Diluted earnings per ordinary share for the 26 weeks to 29 July
2023 is 4.65p ( 26 weeks to 30 July 2022: 3.58p; 52 weeks to 28
January 2023: 2.76p ). Diluted adjusted earnings per share is 4.62p
( 26 weeks to 30 July 2022: 5.23p; 52 weeks to 28 January 2023:
13.39p ).The calculation of diluted earnings per ordinary share at
29 July 2023 is based on the profit for the period attributable to
equity holders of the parent of GBP239.9 million ( 26 weeks to 30
July 2022: GBP184.5 million ; 52 weeks to 28 January 2023: GBP142.5
million ) and a weighted average number of ordinary shares
outstanding during the period after adjusted for the effects of all
dilutive potential ordinary shares calculated as follows:
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
Number Number Number
millions millions millions
Weighted average number of ordinary
shares at beginning of period
(diluted) 5,158.6 5,158.2 5,158.2
Effect of ordinary shares issued
on 20 December 2022 - - 2.8
Effect of ordinary shares held
by the JD Sports Employee Benefit
Trust as treasury shares1 - - (2.4)
Issued ordinary shares at end
of period 5,158.6 5,158.2 5,158.6
----------- ----------- -------------
6. Acquisitions
Current Period Acquisitions
There were no acquisitions during the 26 week period ended 29
July 2023.
Acquisition of Non-Controlling Interests
JD Sports Fashion Germany GmbH
On 25 April 2023, JD Sports Fashion Plc acquired the remaining
20% of the issued share capital in its existing subsidiary JD
Sports Fashion Germany GmbH for cash consideration of EUR7.1
million (GBP6.4 million). The Group now owns 100% of the issued
share capital of JD Sports Fashion Germany GmbH. In accordance with
IFRS 10, the Group had previously assessed and concluded that it
controlled the subsidiary. As the acquisition on 25 April 2023 did
not result in a change of control, this has been accounted for as
an equity transaction.
Other Acquisitions of Non-Controlling Interests
During the period, the Group made four other acquisitions of
non-controlling interests which were not material:
- On 8 March 2023 the Group acquired a further 0.341% of the
issued share capital of DTLR Villa LLC via its existing
intermediate holding company in the US. The Group now owns an
effective shareholding of 79% of the issued share capital of DTLR
Villa LLC.
- On 28 March 2023 the Group acquired the remaining 40% of the
issued share capital in its existing subsidiary Tiso Group Limited.
The Group now owns 100% of the issued share capital of Tiso Group
Limited.
- On 11 April 2023 the Group acquired a further 1% of the issued
share capital in its existing subsidiary JD Sports Gyms Limited.
The Group now owns 95% of the issued share capital of JD Sports
Gyms Limited.
- On 27 April 2023 the Group acquired the remaining 20% of the
issued share capital in its existing subsidiary NQ Retail Limited
(formerly Oi Polloi Limited). The Group now owns 100% of the issued
share capital of NQ Retail Limited.
In accordance with IFRS 10, the Group had previously assessed
and concluded that it controlled these subsidiaries. As the
acquisitions did not result in a change of control, they were
accounted for as equity transactions.
6. Acquisitions (continued)
Prior Period - Non-Significant Acquisitions
Fair values
acquired
GBPm
Acquiree's net assets at acquisition date:
Intangible assets 6.6
Property, plant and equipment 19.3
Right-of-use assets 9.2
Inventories 0.4
Cash and cash equivalents 1.1
Trade and other receivables 3.3
Trade and other payables (11.6)
Bank loans and overdrafts (3.8)
Deferred tax liability (3.7)
Lease liabilities (6.7)
Provisions (0.5)
Net identifiable assets 13.6
------------
Non-controlling interests (various) (1.6)
Goodwill on acquisition 12.6
21.1
3.5
------------
Consideration - satisfied in cash
Consideration - deferred
Total consideration 24.6
------------
Total Swimming Holdings Ltd
On 27 May 2022, JD Sports Fashion Plc completed, via its
existing subsidiary JD Sports Gyms Limited, the acquisition of 60%
of the issued share capital of Total Swimming Holdings Limited for
an initial cash consideration of GBP11.1 million. Total Swimming
Holdings was founded by former Olympic swimmers Steve Parry,
Rebecca Adlington and Adrian Turner to make swimming more
accessible and includes Swim!, the first multi-site operator of
dedicated children's 'learn to swim' centres in the UK. The
acquisition provides a broadening of the Group's leisure interests,
which now includes gyms and pools.
Additional deferred contingent consideration of up to GBP4.0
million was payable if certain targets and performance criteria are
achieved. The fair value of the contingent consideration as at the
acquisition date was determined to be GBP3.5 million. During the
financial period ended 28 January 2023, one of the performance
criteria for receiving the deferred consideration was not met.
Since this was as a result of a post-acquisition event, the release
of GBP2.0 million of contingent consideration was taken through the
Consolidated Income Statement (Note 3, Adjusted Items) for the
period ended 28 January 2023. The fair value of the remaining
contingent consideration as at 29 July 2023 was determined to be
GBP1.5 million.
Put and call options, to enable future exit opportunities for
the management team, have also been agreed and become exercisable
from 2026 onwards. We assessed the substance of the put and call
option agreement, taking into account the management leaver terms,
and concluded that an element of the future option payment is
linked to continued future service and is therefore expensed on a
straight-line basis over the service period. A valuation of the
remaining put and call option liability has been performed using an
earnings multiple, a suitable discount rate and Board approved
forecasts, and the initial liability of GBP9.2 million was
recognised with the corresponding entry to Other Equity in
accordance with the present value method of accounting. The present
value of these options is required to be estimated at each
accounting period date.
Included within the fair value of the net identifiable assets on
acquisition was an intangible asset of GBP5.5 million representing
the fascia names acquired on acquisition and GBP1.1 million
representing the customer relationships. The Board believes that
the excess of consideration paid over net assets on acquisition of
GBP12.4 million is best considered as goodwill on acquisition
representing the market position of the business, the assembled
workforce and the potential future growth opportunities from
opening new sites under the Swim! concept. As at the date of this
report, the period in which measurement adjustments could be made
has now closed on this acquisition and no further fair value
measurement adjustments have been made.
Included in the 52 week period ended 28 January 2023 was revenue
of GBP15.4 million and a profit before tax of GBP0.1 million in
respect of Total Swimming Holdings.
6. Acquisitions (continued)
Other Acquisitions
During the period, the Group made two other acquisitions which
were not material. The acquiree's net assets at acquisition related
to these acquisitions are also included in the fair value table
above.
Full Period Impact of Acquisitions
Had the acquisitions of the entities acquired been affected at
30 January 2022, the revenue and profit before tax of the Group for
the 52 week period to 28 January 2023 would have been GBP10.1
billion and GBP227.1 million respectively.
Acquisition Costs
Acquisition related costs amounting to GBP0.1 million have been
excluded from the consideration transferred and have been
recognised as an expense in the period, within administrative
expenses in the Consolidated Income Statement.
Acquisition of Non-Controlling Interests
JD Sports Fashion Korea Inc
On 6 September 2022, JD Sports Fashion Plc acquired the
remaining 50% of the issued share capital in its existing
subsidiary JD Sports Fashion Korea Inc for cash consideration of
26.1 billion KRW (GBP16.4 million). The Group now owns 100% of the
issued share capital of JD Sports Fashion Korea Inc. In accordance
with IFRS 10, the Group had previously assessed and concluded that
it controlled the subsidiary. As the acquisition on 6 September
2022 did not result in a change of control, this has been accounted
for as an equity transaction. During the period ended 28 January
2023, the Group announced that JD would be withdrawing from the
South Korean market.
Deporvillage S.L.
On 14 October 2022, Iberian Sports Retail Group S.L. ('ISRG'),
the Group's existing intermediate holding company in Spain,
acquired a further 18% of the issued share capital in its existing
subsidiary Deporvillage S.L. for cash consideration of EUR14.8
million (GBP12.9 million) and deferred consideration of EUR5.0
million (GBP4.3 million) subject to the non-controlling interests
abiding by certain non-compete obligations. 50% of the deferred
consideration is due within one year of the completion date of 14
October 2022 with the remaining 50% due on the second anniversary
of the completion date. ISRG now owns 98% of the issued share
capital and the Group now owns an effective shareholding of 49% of
the issued share capital of Deporvillage S.L. In accordance with
IFRS 10, the Group had previously assessed and concluded that it
controlled the subsidiary. As the acquisition on 14 October 2022
did not result in a change of control, this was accounted for as an
equity transaction.
7. Divestments
Current Period - Non-Significant Divestments
On 16 December 2022, the Group announced its plan to
significantly simplify its business offering through the divestment
of a number of non-core businesses in order to focus more fully on
the opportunities across the rest of the Group. As a result, during
the 26 week period to 29 July 2023 12 businesses were divested for
total cash consideration of GBP14.7 million:
- Rascal Clothing Limited (75% equity interest);
- Tessuti Group Limited (100% equity interest) - including its
subsidiaries Tessuti Limited (87.5% equity interest), Tessuti
(Ireland) Limited (87.5% equity interest), Tessuti Retail Limited
(100% equity interest) and Prima Designer Limited (100% equity
interest);
- Choice Limited (87.5% equity interest) - including its
subsidiary Choice 33 Limited (87.5% equity interest);
- Giulio Limited (87.5% equity interest) - including its
subsidiaries Giulio Fashion Limited (87.5% equity interest) and
Giulio Woman Limited (87.5% equity interest);
- R.D. Scott Limited (100% equity interest);
- Catchbest Limited (80% equity interest).
- Source Lab Limited (85% equity interest);
- Topgrade Sportswear Holdings Limited including its
subsidiaries Topgrade Sportwear Limited and GetTheLabel.com Limited
(80% equity interest);
- Woodlandslove Limited (80% equity interest);
- 80s Casual Classics Limited including its subsidiary Modern
Casuals Limited (70% equity interest);
- Bernard Esher Limited (80% equity interest); and
- Hairburst Holding Group Limited including its subsidiaries
Hair Burst Limited, JMH Cosmetics Limited and Mrblancteeth Limited
(75% equity interest).
7. Divestments (continued)
Current Period - Non-Significant Divestments (continued)
In addition, on 23 May 2023, the Group disposed of Brand Stable
Limited (49% equity interest) a fixed asset investment in a joint
venture for cash consideration of GBP0.5 million.
The consideration was received fully in cash during the period.
Costs to sell amounted to GBP0.3 million. At the date of disposal,
the carrying amounts of the 13 divested businesses (including one
joint venture) net assets were as follows:
GBPm
Intangible assets 20.4
Property, plant and equipment 17.0
Right-of-use assets 30.8
Deferred tax assets 0.6
Other non-current assets 0.4
Investments 1.3
------------------------------------------- --------
Total non-current assets 70.5
------------------------------------------- --------
Inventories 59.7
Trade and other receivables 14.5
Cash and cash equivalents 76.5
------------------------------------------- --------
Total current assets 150.7
------------------------------------------- --------
Trade and other payables (89.7)
Provisions (0.8)
Borrowings (74.4)
Lease liabilities (5.2)
Total current liabilities (170.1)
------------------------------------------- --------
Deferred tax liabilities (1.1)
Other payables and accrued expenses (1.2)
Lease liabilities (27.6)
------------------------------------------- --------
Total non-current liabilities (29.9)
------------------------------------------- --------
Total assets less total liabilities 21.2
------------------------------------------- --------
Total consideration received in cash 15.2
Total deferred consideration receivable 1.5
Provision for onerous agreements (3.8)
Provision for intercompany balances (7.1)
Net assets disposed of (21.2)
------------------------------------------- --------
Loss on disposal (15.4)
------------------------------------------- --------
Total consideration received in cash 15.2
Cash and cash equivalents disposed of (76.5)
------------------------------------------- --------
Net cash (61.3)
------------------------------------------- --------
7. Divestments (continued)
Prior period divestments
Footasylum
On 5 August 2022, the Group disposed of its 100% equity interest
in Footasylum and its associated subsidiaries to Aurelius Group for
cash consideration of GBP37.5 million. The subsidiary was
classified as held-for-sale as at 30 July 2022 (see Note 8). The
consideration was received fully in cash in 2022. At the date of
disposal, the carrying amounts of Footasylum's net assets were as
follows:
GBPm
Intangible assets 6.7
Property, plant and equipment 27.0
Right-of-use assets 79.1
Deferred tax assets 0.2
----------------------------------------- -------
Total non-current assets 113.0
----------------------------------------- -------
Inventories 36.4
Trade and other receivables 24.9
Cash and cash equivalents 6.0
----------------------------------------- -------
Total current assets 67.3
----------------------------------------- -------
Trade and other payables (24.7)
Other tax and social security (3.7)
Accruals and deferred income (19.1)
Borrowings (3.5)
Lease liabilities (15.6)
Income tax liabilities (1.0)
----------------------------------------- -------
Total current liabilities (67.6)
----------------------------------------- -------
Accruals and deferred income (5.6)
Lease liabilities (59.8)
----------------------------------------- -------
Total non-current liabilities (65.4)
----------------------------------------- -------
Total assets less total liabilities 47.3
----------------------------------------- -------
Total consideration received in cash 37.5
----------------------------------------- -------
Net assets disposed of (47.3)
----------------------------------------- -------
Costs to sell (5.0)
----------------------------------------- -------
Loss on disposal (14.8)
----------------------------------------- -------
Total consideration received in cash 37.5
----------------------------------------- -------
Cash and cash equivalents disposed of (6.0)
----------------------------------------- -------
Net cash received 31.5
----------------------------------------- -------
In the 26 weeks to 30 July 2022, an impairment of GBP8.5 million
was recognised in order to present the Footasylum assets
held-for-sale at the lower of carrying value and fair value less
costs to sell in accordance with IFRS 5. A further GBP6.3 million
loss was recognised following the reversal of GBP8.3 million of
right-of-use assets depreciation in order to cease depreciating
these assets at the point of classification as held-for-sale in
accordance with IFRS 5 and the release of a GBP2.0 million
provision for costs to sell that were no longer required. This
resulted in a higher loss on disposal of the assets of GBP14.8
million when compared to the impairment of GBP8.5 million
recognised in the 26 week period ended 30 July 2022.
Other non-core fashion businesses
On 16 December 2022, the Group announced its plan to
significantly simplify its fashion branded offer through the
divestment of 15 UK-based non-core fashion businesses ('Divested
Businesses') to Frasers Group Plc ('Frasers'), for cash
consideration of GBP44.5 million, in order to focus more fully on
the opportunities across the rest of the Group, in particular the
international and digital expansion of the Group's core premium
Sports Fashion fascias.
7. Divestments (continued)
Prior period divestments (continued)
Other non-core fashion businesses (continued)
Completion on the acquisition of shares in eight of the Divested
Businesses, and on the acquisition of all of the debt owing to JD
by the Divested Businesses, took place immediately on exchange. The
initial eight divested businesses were:
- Base Childrenswear Limited (80% equity interest);
- Dantra Limited (75% equity interest);
- PG2019 Limited (100% equity interest);
- Prevu Studio Limited (100% equity interest);
- Nicholas Deakins Limited (100% equity interest);
- Uggbugg Fashion Limited - including its subsidiary Missy Empire Limited (51% equity interest);
- Clothingsites Holdings Limited - including its subsidiaries
Clothingsites.co.uk Limited and Old Brown Bag Clothing Limited
(100% equity interest); and
- WHCO Limited - including its subsidiaries The Watch Shop
Holdings Limited and Watch Shop Logistics Limited (100%
equity interest).
The consideration was received fully in cash during the period.
At the date of disposal, the carrying amounts of the initial eight
divested businesses net assets were as follows:
GBPm
Intangible assets 22.6
Property, plant and equipment 3.9
Right-of-use assets 6.5
Total non-current assets 33.0
----------------------------------------------- --------
Inventories 29.8
Trade and other receivables 8.5
Cash and cash equivalents 16.4
----------------------------------------------- --------
Total current assets 54.7
----------------------------------------------- --------
Trade and other payables (19.7)
Provisions (0.1)
Borrowings (11.6)
Lease liabilities (7.4)
Income tax liabilities (0.3)
----------------------------------------------- --------
Total current liabilities (39.1)
----------------------------------------------- --------
Other payables and accrued expenses (1.5)
Total non-current liabilities (1.5)
----------------------------------------------- --------
Total assets less total liabilities 47.1
----------------------------------------------- --------
Total consideration received in cash 44.5
----------------------------------------------- --------
Intercompany debt (86.0)
----------------------------------------------- --------
Net assets disposed of (47.1)
----------------------------------------------- --------
Costs to sell (0.6)
----------------------------------------------- --------
Impairment of assets held-for-sale (note 3) (17.5)
----------------------------------------------- --------
Loss on disposal (106.7)
----------------------------------------------- --------
Total consideration received in cash 44.5
----------------------------------------------- --------
Cash and cash equivalents disposed of (16.4)
----------------------------------------------- --------
Net cash received 28.1
----------------------------------------------- --------
The assets and liabilities of the remaining seven Divested
Businesses were classified as held-for-sale at 28 January 2023 (see
Note 8). Subsequent to the period end, the Group completed the
disposal of the remainder of these Divested Businesses (see page 36
and 37).
8. Held-For-Sale
As at As at As at
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Intangible assets 34.5 6.7 9.2
Property, plant and equipment 6.8 26.9 17.2
Trade and other receivables 5.1 27.9 13.1
Inventories 21.0 36.5 52.7
Cash and cash equivalents 12.2 - -
Right-of-use assets 19.5 71.0 30.8
Income tax asset 1.4 - -
Deferred tax assets 0.3 0.2 -
Impairment recognised in accordance
with IFRS 5 (7.9) (3.5) -
Assets held-for-sale 92.9 165.7 123.0
---------- ---------- -------------
As at As at As at
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Trade and other payables (18.1) (63.4) (133.1)
Lease liabilities (21.2) (74.8) (32.1)
Provisions - - (0.4)
Income tax liability - (1.0) -
Liabilities held-for-sale (39.3) (139.2) (165.6)
---------- ---------- -------------
Held-for-sale - current period
Other Businesses Held-for-sale
On 16 December 2022, the Group announced its plan to
significantly simplify its business offering through the divestment
of a number of non-core businesses in order to focus more fully on
the opportunities across the rest of the Group. Further details of
this strategy change were provided at the Group's Capital Market
Event on 2 February 2023 and disclosed in the Group's strategic
report within the 2023 Annual Report and Accounts. As a result,
during the 26 week period to 29 July 2023 a further three
businesses were classified as being held-for-sale.
The businesses have been classified as held-for-sale as at 29
July 2023 as:
- the carrying amount of the businesses will be recovered through the sale transaction;
- the businesses are available for sale in their present condition;
- the Group has committed to sell the businesses and this sale plan has been initiated;
- the businesses are being actively marketed at a price that is
reasonable in relation to its fair value; and
- there is an expectation that the sale process would be
completed within 12 months of the classification as
held-for-sale.
Discontinued Operations
The presentation of an operation as a discontinued operation is
limited to a component of an entity that either has been disposed
of or is classified as held-for-sale, and:
- represents a separate major line of business or geographic area of operations; and
- is part of a single co-ordinated plan to dispose of a separate
major line of business or geographic area of operations, or is a
subsidiary acquired exclusively with a view to resale.
The businesses held-for-sale as at 29 July 2023 are subject to
individual plans and can be distinguished operationally and for
financial reporting purposes. However, the Group has other
subsidiaries and operations which continue to operate within the
same segment and geographic territories as the three businesses
that were classified as held-for-sale. Therefore, these entities do
not represent a separate major line of business or geographic area
for the Group and were not classified as discontinued operations as
at 29 July 2023.
8. Assets Held-For-Sale (continued)
Assets and Liabilities of Other Businesses Held-for-Sale
As at 29 July 2023, Mainline Menswear Holdings Limited, Kukri
Sports Limited, Gymnation Holding Limited and their associated
subsidiaries were held at the lower of carrying value or fair value
less costs to sell (excluding cash and cash equivalents). A
reconciliation is provided in the table below. Cash and cash
equivalents as at 29 July 2023 of GBP8.9 million has been presented
within the Group's cash and cash equivalents in accordance with
IFRS 5 representing the amount not included within held-for-sale
for businesses sold on a cash free basis. Cash and cash equivalents
as at 29 July 2023 of GBP12.2 million has been included within
held-for-sale for those businesses not due to be sold on a
cash-free basis:
As at
29 July
2023
GBPm
Intangible assets 34.5
Property, plant and equipment 6.8
Trade and other receivables 5.1
Inventories 21.0
Cash and cash equivalents 12.2
Right-of-use assets 19.5
Income tax asset 1.4
Deferred tax assets 0.3
Impairment recognised in accordance
with IFRS 5 (7.9)
----------------------------------------------------------------------- -------------------
Assets held-for-sale 92.9
----------------------------------------------------------------------- -------------------
As at
29 July
2023
GBPm
Trade and other payables (18.1)
Lease liabilities (21.2)
----------------------------------------------------------------------- -------------------
Liabilities held-for-sale (39.3)
----------------------------------------------------------------------- -------------------
Held-for-sale - previous period ended 30 July 2022
Footasylum
Following a review by the Competition and Markets Authority
('CMA'), a final ruling was issued on 4 November 2021 to prohibit
the Group's acquisition of Footasylum. The final CMA undertakings
were issued on 14 January 2022 which was effectively the start date
for the Footasylum sale process. Footasylum was classified as
held-for-sale as at 29 January 2022 as:
- the carrying amount of Footasylum was expected to be recovered
through the sale transaction;
- it was available for sale in its present condition;
- the Group had committed to sell Footasylum and this sale plan had been initiated;
- Footasylum was being actively marketed at a price that was
reasonable in relation to its fair value; and
- there was an expectation that the sale process would be
completed within 12 months of the classification as
held-for-sale.
8. Assets Held-For-Sale (continued)
Held-for-sale - previous period ended 30 July 2022
(continued)
Assets and Liabilities of Footasylum held-for-sale
As at 30 July 2022, Footasylum was stated at the lower of its
carrying value (excluding cash and cash equivalents) and fair value
less costs to sell in accordance with IFRS 5. Cash and cash
equivalents as at 30 July 2022 of GBP6.0 million were presented
within the Group's cash and cash equivalents.
As at
30 July
2022
GBPm
Intangible assets 6.7
Property, plant and equipment 26.9
Deferred tax assets 0.2
Right-of-use assets 71.0
Inventories 36.5
Trade and other receivables 27.9
Impairment recognised in accordance
with IFRS 5 (3.5)
-----------------------------------------
Assets held-for-sale 165.7
----------------------------------------- ----------
As at
30 July
2022
GBPm
Trade and other payables (63.4)
Lease liabilities (74.8)
Income tax liability (1.0)
-------------------------------
Liabilities held-for-sale (139.2)
------------------------------- ----------
Footasylum was classified as held-for-sale as at 30 July 2022
and was subject to an individual plan and could be distinguished
operationally and for financial reporting purposes. However, the
Group had other subsidiaries and operations within the Sports
Fashion segment in the UK. Therefore, Footasylum did not represent
a separate major line of business or geographic area for the Group
and was not classified as a discontinued operation as at 30 July
2022.
On 29 July 2022, JD Sports Fashion Plc exchanged contracts to
sell Footasylum and its associated subsidiaries to Aurelius Group
for cash consideration of GBP 37.5 million. The transaction
subsequently completed on 5 August 2022.
Held-for-sale - previous period ended 28 January 2023
Assets and Liabilities of Non-Core Businesses Held-for-Sale
As at 28 January 2023, eight non-core businesses were held at
the lower of carrying value or fair value less costs to sell
(excluding cash and cash equivalents). A reconciliation is provided
in the table below. Cash and cash equivalents as at 28 January 2023
of GBP74.5 million were presented within the Group's cash and cash
equivalents in accordance with IFRS 5.
Subsequent to the period end, on 7 February 2023, the Group
completed the disposal of five of these businesses to Frasers Group
Plc as per the terms of the transaction agreed on 16 December
2022:
- Tessuti Group Limited (100% equity interest) - including its
subsidiaries Tessuti Limited (87.5% equity interest), Tessuti
(Ireland) Limited (87.5% equity interest), Tessuti Retail Limited
(100% equity interest) and Prima Designer Limited (100% equity
interest);
- Choice Limited (87.5% equity interest) - including its
subsidiary Choice 33 Limited (87.5% equity interest);
- Giulio Limited (87.5% equity interest) - including its
subsidiaries Giulio Fashion Limited (87.5% equity interest) and
Giulio Woman Limited (87.5% equity interest);
- R.D. Scott Limited (100% equity interest); and
- Catchbest Limited (80% equity interest).
8. Assets Held-For-Sale (continued)
Assets and Liabilities of Non-Core Businesses Held-for-Sale
(continued)
Rascal Clothing Limited ('Rascal') was withdrawn from the
transaction with Frasers as one of the founders exercised a pre-
emption right agreed as part of the Group's acquisition of Rascal
on 5 February 2019. The divestment of 75% equity interest in Rascal
completed on 6 February 2023.
On 28 February 2023, the Group completed the divestment of
Source Lab Limited to its non-controlling shareholder.
On 2 March 2023, the Group completed the disposal of 80% equity
interest in Topgrade Sportswear Holdings Limited (including
Topgrade Sportswear Limited and GetTheLabel.com Limited), the final
entity outstanding as part of the Frasers transaction.
As at
28 January
2023
GBPm
Intangible assets 9.2
Property, plant and equipment 17.2
Inventories 52.7
Trade and other receivables 13.1
Right-of-use assets 30.8
--------------------------------------------------------------------- -----------------
Assets held-for-sale 123.0
--------------------------------------------------------------------- -----------------
As at
28 January
2023
GBPm
Trade and other payables (133.1)
Provisions (0.4)
Lease liabilities (32.1)
---------------------------------------------------------------------
Liabilities held-for-sale (165.6)
--------------------------------------------------------------------- -----------------
52 weeks
Reconciliation to lower of fair to
value less costs to sell or carrying 28 January
value 2023
GBPm
Net liabilities held-for-sale (42.6)
Cash and cash equivalents 74.5
Intercompany liabilities eliminating
on consolidation (9.9)
Impairment to lower of fair value
less costs to sell (17.5)
--------------------------------------------------------------------------- --------------
Cash consideration due to be received
on completion 4.5
--------------------------------------------------------------------------- --------------
The businesses held-for-sale as at 28 January 2023 were subject
to individual plans and would be distinguished operationally and
for financial reporting purposes. However, the Group has other
subsidiaries and operations which continue to operate within the
same segment and geographic territories as the businesses that were
classified as held-for-sale. Therefore, these entities do not
represent a separate major line of business or geographic area for
the Group and were not classified as discontinued operations as at
28 January 2023.
9. Provisions
A provision is recognised in the Consolidated Statement of
Financial Position when the Group has a present legal or
constructive obligation as a result of a past event, it is more
likely than not that an outflow of economic benefits will be
required to settle the obligation and the obligation can be
estimated reliably.
Property Provision
Within the property provision, management has provided for
expected dilapidations on stores and warehouses. This provision
covers expected dilapidation costs for any lease considered
onerous, any related to stores recently closed, stores which are
planned to close or are at risk of closure and those under contract
but not currently in use. Management maintains all properties to a
high standard and carry out repairs whenever necessary during the
Group's tenure. Therefore, if there is no risk of closure, any
provision would be minimal and management does not consider it
necessary to hold dilapidation provisions for these properties.
Other Provisions
Other provisions comprises various other trade provisions and
legal costs. The provisions are estimated based on accumulated
experience, supplier communication and management approved
forecasts.
Onerous Contract Provision
Within the onerous contract provision, management has provided
against the minimum contractual cost for the remaining term on a
non-cancellable logistics services contract for the Azambuja
warehouse in Portugal within the SportZone division. The provision
will be unwound over the remaining seven years to the period ending
30 September 2030. During the period ended 29 July 2023 management
have also provided for contracts now considered to be onerous
following the disposal of the non-core fashion businesses.
Onerous
Property Other provisions contract
provision GBPm provision Total
GBPm GBPm GBPm
Balance at 30 July 2022 21.7 9.3 4.7 35.7
Provisions reclassified from accruals 0.2 - - 0.2
Provisions released during the
period (1.4) (5.1) (0.4) (6.9)
Provisions created during the period 2.1 1.7 - 3.8
Provisions utilised during the
period (0.7) (0.8) - (1.5)
Provisions transferred to held
for sale (0.4) - - (0.4)
Provisions divested in the period (0.1) - - (0.1)
------------ ------------------- ------------ --------
Balance at 28 January 2023 21.4 5.1 4.3 30.8
Provisions released during the
period (0.2) - (0.4) (0.6)
Provisions created during the period - 0.8 5.0 5.8
Provisions utilised during the
period - (2.1) (0.7) (2.8)
Provisions divested in the period
(Note 7)* (0.2) - (0.2) (0.4)
------------
Balance at 29 July 2023 21.0 3.8 8.0 32.8
------------
*The total value of divestments detailed in the table above for
the period ended 29 July 2023 is in relation to the non-core
fashion businesses. A total of GBP0.8m was divested as per note 7
where GBP0.4m was held-for-sale in the 52 week period ended 28
January 2023.
Provisions have been analysed between current and non-current as
follows:
26 weeks 26 weeks 52 weeks
to to to
29 July 30 July 28 January
2023 2022 2023
GBPm GBPm GBPm
Current 7.7 13.0 9.7
Non-current (within 10 years) 25.1 22.7 21.1
Total provisions 32.8 35.7 30.8
----------- -----------
10. Related party transactions
Transactions and balances with related parties during the period
are shown below. Transactions were undertaken in the ordinary
course of business on an arm's length basis. Outstanding balances
are unsecured (unless otherwise stated) and will be settled in
cash.
Transactions with Related Parties Who Are Not Members of the
Group
Pentland Group Limited
During the period, Pentland Group Limited owned 51.6% (2022:
51.9%) of the issued ordinary share capital of JD Sports Fashion
Plc. The Group made purchases of inventory from Pentland Group
Limited in the period and the Group also sold inventory to Pentland
Group Limited. The Group also paid royalty costs to Pentland Group
Limited for the use of a brand.
During the period, the Group entered into the following
transactions with Pentland Group Limited:
Transactions Transactions Transactions
with related with related with related
parties parties parties
26 weeks 26 weeks 52 weeks
to 29 July to 30 July to 28 January
2023 2022 2023
GBPm GBPm GBPm
Sale of inventory 0.2 0.5 1.2
Purchase of inventory (12.8) (14.2) (43.3)
Royalty costs (3.5) (8.1) (4.0)
Other costs (0.3) (0.7) (0.4)
Dividends paid - - (12.8)
At the end of the period, the following balances were
outstanding with Pentland Group Limited:
Amounts Amounts Amounts owed
owed to / owed to / to / by related
by related by related parties
parties parties 52 weeks
26 weeks 26 weeks to 28 January
to 29 July to 30 July 2023
2023 2022 GBPm
GBPm GBPm
Trade receivables - - 0.4
Trade payables (3.7) (5.4) (4.9)
Transactions with Associates and Joint Ventures
During the period, the Group entered into the following
transactions with its associates and joint ventures:
Transactions Transactions Transactions
with related with related with related
parties parties parties
26 weeks 26 weeks 52 weeks
to 29 July to 30 July to 28 January
2023 2022 2023
GBPm GBPm GBPm
Sale of inventory 0.6 0.2 0.1
Purchase of inventory (2.2) (5.1) (12.4)
Recharge of expenses - - 2.6
Dividends and distributions received - 3.0 3.4
10. Related party transactions (continued)
Transactions with Associates and Joint Ventures (continued)
At the end of the period, the Group had the following balances
outstanding with its associates and joint ventures:
Amounts Amounts Amounts owed
owed to / owed to / to / by related
by related by related parties
parties parties 52 weeks
26 weeks 26 weeks to 28 January
to 29 July to 30 July 2023
2023 2022 GBPm
GBPm GBPm
Trade receivables 3.1 0.2 2.9
Loans receivable in less than 1
year 0.1 - 0.2
Loans receivable in more than 1
year 8.4 - 7.6
Trade payables (0.3) (0.4) (1.0)
Transactions with Directors
Other than the remuneration of Directors, there have been no
other transactions with Directors in the period (26 week period
ended 30 July 2022: GBPnil).
11. 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.
12. Financial Instruments
The tables below show the carrying amounts and fair values of
financial assets and financial liabilities, including their levels
in the fair value hierarchy.
Fair Value Hierarchy
As at 29 July 2023, the Group held non-hedged foreign exchange
forward contracts which were carried at fair value on the
Consolidated Statement of Financial Position. With reference to the
put and call options, in the consolidated accounts the synthetic
forward is measured at the present value of the exercise price.
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instrument
by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities.
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either
directly or indirectly.
Level 3: techniques which use inputs that have a significant
effect on the recorded fair value that are not based on
observable
market data.
12. Financial Instruments (continued)
Carrying Level
amount 1 Level Level
GBPm GBPm 2 3
GBPm GBPm
At 29 July 2023
Financial assets at fair value
through profit or loss
Foreign exchange forward contracts
- non-hedged 1.5 - 1.5 -
---------- ------- ------- ----------
Financial liabilities at fair
value through profit or loss
Foreign exchange forward contracts
- non-hedged (15.7) - (15.7) -
---------- ------- ------- ----------
Other financial liabilities
Interest-bearing loans and borrowings
- current (82.2) - (82.2) -
Interest-bearing loans and borrowings
- non-current (32.4) - (32.4) -
Put and call options held by non-controlling
interests (1) (1,317.5) - - (1,317.5)
---------- ------- ------- ----------
1. During the period ended 29 July 2023 the Group announced its
intention to acquire the remaining 49.98% shares in ISRG for a
total cash consideration of GBP428.8 million following the exercise
of a Buy/Sell Option within the shareholders agreement. A
proportion of the Buy/Sell Option relates to the same shareholding
as the ISRG put option previously recognised by the Group as a
financial liability as at 28 January 2023 of GBP138.6 million and,
as a result, this previously recognised put option has expired
unexercised. The financial liability of GBP138.6 million has been
removed with the corresponding entry to the put and call option
reserve. In respect of the Buy/Sell Option, a financial liability
of GBP428.8 million has been recognised as at 29 July 2023
alongside a corresponding put and call option reserve entry for the
same amount on initial recognition of the option. This option was
not previously recognised as a financial liability as it did not
have a specified time period for execution and the acquisition or
sale of the option holding was at the Group's discretion.
Carrying Level
amount 1 Level Level
GBPm GBPm 2 3
GBPm GBPm
At 30 July 2022
Financial assets at fair value
through profit or loss
Foreign exchange forward contracts
- non-hedged 32.3 - 32.3 -
-------- -------------------- ------- --------
Financial liabilities at fair
value through profit or loss
Foreign exchange forward contracts
- non-hedged (11.3) - (11.3) -
-------- -------------------- ------- --------
Other financial liabilities
Interest-bearing loans and borrowings
- current (83.0) - (83.0) -
Interest-bearing loans and borrowings
- non-current (41.8) - (41.8) -
Put and call options held by non-controlling
interests (815.9) - - (815.9)
-------- -------------------- ------- --------
Carrying Level
amount 1 Level Level
GBPm GBPm 2 3
GBPm GBPm
At 28 January 2023
Financial assets at fair value
through profit or loss
Foreign exchange forward contracts
- non-hedged 14.5 - 14.5 -
---------- -------------------- ------- ----------
Financial liabilities at fair
value through profit or loss
Foreign exchange forward contracts
- non-hedged (30.4) - (30.4) -
---------- -------------------- ------- ----------
Other financial liabilities
Interest-bearing loans and borrowings
- current (75.2) - (75.2) -
Interest-bearing loans and borrowings
- non-current (38.0) - (38.0) -
Put and call options held by non-controlling
interests (1,061.2) - - (1,061.2)
---------- -------------------- ------- ----------
13. Post Balance Sheet Events
Acquisitions and divestments
Marketing Investment Group S.A. ('MIG')
On 8 August 2023, JD Sports Fashion Plc announced that it had
exercised its rights under a call option and entered into a
conditional agreement to acquire the outstanding 40% minority stake
of MIG from its non-controlling shareholders and will become the
100% sole owner. Completion of the acquisition is subject to
customary competition approval by the European Commission and
anticipated in the second half of the financial period.
JDSF Holdings (Canada)
On 26 August 2023, JD Sports Fashion Plc transferred its 80%
shareholding in JDSF Holdings (Canada) Inc into the Group's
existing 80% owned US sub-group for cash consideration of CAD $14.4
million (GBP8.4 million). As a result of the transfer, JD Sports
Fashion Plc now owns an effective shareholding of 64% of JDSF
Holdings (Canada) Inc. In accordance with IFRS 10, the Group had
previously assessed and concluded that it controlled the subsidiary
and the transfer on 26 August 2023 did not result in a change of
control.
JD Sports Fashion SDN BHD
On 30 August 2023, JD Sports Fashion Plc acquired the remaining
20% of the issued share capital in its existing subsidiary in
Malaysia, JD Sports Fashion SDN BHD, for cash consideration of
GBP35.5 million. The Group now owns 100% of the issued share
capital of JD Sports Fashion SDN BHD and its subsidiaries. In
accordance with IFRS 10, the Group had previously assessed and
concluded that it controlled the subsidiary. As the acquisition on
30 August 2023 did not result in a change of control, this has been
accounted for as an equity transaction.
SEA Sports Fashion
On 30 August 2023, JD Sports Fashion Plc disposed of its 60%
shareholding in its Malaysian subsidiary SEA Sports Fashion SDN.
BHD to the non-controlling interest. This transaction was not
material.
14. Interim Report
This interim report is available to download from www.jdplc.com
. Paper based copies will be available on application to the
Company Secretary, JD Sports Fashion Plc, Hollinsbrook Way,
Pilsworth, Bury, Lancashire, BL9 8RR.
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
21 September 2023
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.
[1] On 20 December 2022, a total of 25,000,000 ordinary shares
of 0.05 pence each were issued at par. The shares were delivered to
the JD Sports Employee Benefit Trust ('Trust') and were issued, in
part to satisfy a buyout award due to Régis Schultz, the Group's
Chief Executive Officer with an effective date of 5 September 2022.
The remainder of the new shares shall be held by the Trust in
connection with the Long-Term Incentive Plan 2022.
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END
IR FLFETATIIFIV
(END) Dow Jones Newswires
September 21, 2023 02:00 ET (06:00 GMT)
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