TIDMJD.
RNS Number : 2047V
JD Sports Fashion Plc
13 April 2021
13 April 2021
JD SPORTS FASHION PLC
FINAL RESULTS
FOR THE 52 WEEKSED 30 JANUARY 2021
JD Sports Fashion Plc (the 'Group'), the leading retailer of
sports, fashion and outdoor brands, today announces its Final
Results for the 52 weeks ended 30 January 2021 (2020: 52 weeks
ended 1 February 2020).
IFRS 16 Proforma IAS 17*
2021 2020 2021 2020
GBPm GBPm GBPm GBPm
Revenue 6,167.3 6,110.8 6,167.3 6,110.8
Gross profit % 48.0% 47.0% 48.0% 47.0%
EBITDA* before exceptional
items 990.2 979.8 649.3 623.6
Depreciation / amortisation (507.9) (462.9) (183.1) (151.8)
-------- -------- --------- --------
Operating profit (before
exceptional items*) 482.3 516.9 466.2 471.8
Net interest expense (61.0) (78.1) (6.1) (6.2)
--------- --------
Profit before tax and exceptional
items* 421.3 438.8 460.1 465.6
Exceptional items (97.3) (90.3) (104.8) (90.3)
-------- -------- --------- --------
Profit before tax 324.0 348.5 355.3 375.3
--------- --------
Basic earnings per ordinary
share 23.05p 25.29p 26.26p 27.44p
Adjusted earnings per ordinary
share* 32.19p 34.26p 36.19p 36.41p
Total dividend payable per
ordinary share 1.44p 0.28p 1.44p 0.28p
Net cash at period end (a) 795.4 429.9 795.4 429.9
--------- --------
a) Net cash consists of cash and cash equivalents less interest-bearing loans and borrowings
b) Throughout this release '*' indicates the first instance of
an alternative performance measure which are explained at the end
of these final results
Group Highlights
-- Significant retention of sales and profitability through an
unprecedented period of global uncertainty and multiple periods of
temporary store closures reflects:
o The strength and premium position of the JD brand and
consumers' affinity to it
o Relevance of product offer to style conscious consumers
o Agile multichannel ecosystem built up over a number of
years
o Infrastructure flexibility
-- Transformational developments in the United States:
o Exceptional trading performance in the Finish Line and JD
fascias in part driven by the enhanced consumer demand consequent
to the US Government stimulus
o First flagship store for JD opened in Times Square, New York
with a positive reaction from customers and international brand
partners
o A further 37 former Finish Line stores converted to JD with 49
stores trading as JD at the end of the year
o Acquisitions of Shoe Palace (based in California) and,
subsequent to the year end, DTLR (based in Maryland) complement the
strengths of the existing Finish Line and JD fascias and
significantly enhance the Group's exposure to key consumer
demographics on the West Coast and East Coast of the United
States
-- International development of JD in other markets continues to
progress positively although the number of new stores slowed
temporarily as a consequence of restrictions on construction and
fit out works with:
o Net increase of 31 JD stores across Mainland Europe
o Net increase of five JD stores in the Asia Pacific region
-- Outdoor business returned to profitability in the second half
of the year with a strong performance in key categories
-- Physical retail in England and Wales now re-opened
-- Physical retail in United States has largely traded free from
Covid related restrictions in the new financial year to date
-- Net cash at the period end of GBP795.4 million reflects the
high point of the working capital cycle and is stated before:
o Completed acquisitions in the new year to date with aggregate
cash consideration paid of approximately GBP380 million
o Reversal of temporary factors, including agreed tax deferrals
and rent deferrals across our global businesses, totaling in excess
of GBP125 million
-- Ongoing significant investments in logistics to mitigate against the risks associated with:
o Requirement to operate with social distancing
o Duties payable consequent to the form of the UK's trade
agreement with the European Union
-- Dividend payments resumed with final dividend of 1.44p per
share proposed which recognises the significant contribution to
profitability from the Group's international operations,
particularly those in the United States
-- Key financial information of the two business segments is tabulated below:
Period to 30 January 2021
Sports Fashion Outdoor Unall(2) Total
IFRS 16 IAS 17 IFRS 16 IAS 17 IFRS 16 IAS 17
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 5,808.0 5,808.0 359.3 359.3 - 6,167.3 6,167.3
-------- -------- -------- -------- --------- -------- --------
Gross profit % 48.4% 48.4% 42.2% 42.2% - 48.0% 48.0%
-------- -------- -------- -------- --------- -------- --------
EBITDA before
exceptional items 955.1 636.2 35.1 13.1 - 990.2 649.3
Depreciation (454.9) (151.2) (32.9) (11.8) - (487.8) (163.0)
Amortisation(1) (15.5) (15.5) (4.6) (4.6) - (20.1) (20.1)
-------- -------- -------- -------- --------- -------- --------
Operating profit
/ (loss) before
exceptional items 484.7 469.5 (2.4) (3.3) - 482.3 466.2
Net interest expense (51.2) - (3.7) - (6.1) (61.0) (6.1)
-------- -------- -------- -------- --------- -------- --------
Profit / (loss)
before tax and
exceptional items 433.5 469.5 (6.1) (3.3) (6.1) 421.3 460.1
Exceptional items (76.9) (76.9) (20.4) (27.9) - (97.3) (104.8)
-------- -------- -------- -------- --------- -------- --------
Profit / (loss)
before tax 356.6 392.6 (26.5) (31.2) (6.1) 324.0 355.3
-------- -------- -------- -------- --------- -------- --------
(1) This is a non-trading charge relating to the amortisation of
various fascia names and brand names which arise consequent to the
accounting of acquisitions made over a number of years. These
charges are as follows:
-- Sports Fashion: GBP15.5 million (2020: GBP5.4 million)
-- Outdoor: GBP4.6 million (2020: GBP4.5 million)
(2) The Group considers that net funding costs are cross
divisional in nature and cannot be allocated between the segments
on a meaningful basis.
Period to 1 February 2020
Sports Fashion Outdoor Unall(2) Total
IFRS 16 IAS 17 IFRS 16 IAS 17 IFRS 16 IAS 17
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 5,696.8 5,696.8 414.0 414.0 - 6,110.8 6,110.8
-------- -------- --------- --------- --------- -------- --------
Gross profit % 47.4% 47.4% 41.9% 41.9% - 47.0% 47.0%
-------- -------- --------- --------- --------- -------- --------
EBITDA before
exceptional items 952.4 629.6 27.4 (6.0) - 979.8 623.6
Depreciation (413.8) (132.0) (39.2) (9.9) - (453.0) (141.9)
Amortisation(1) (5.4) (5.4) (4.5) (4.5) - (9.9) (9.9)
-------- -------- --------- --------- --------- -------- --------
Operating profit
/ (loss) before
exceptional items 533.2 492.2 (16.3) (20.4) - 516.9 471.8
Net interest expense (64.7) - (7.2) - (6.2) (78.1) (6.2)
-------- -------- --------- --------- --------- -------- --------
Profit / (loss)
before tax and
exceptional items 468.5 492.2 (23.5) (20.4) (6.2) 438.8 465.6
Exceptional items (40.6) (40.6) (49.7) (49.7) - (90.3) (90.3)
-------- -------- --------- --------- --------- -------- --------
Profit / (loss)
before tax 427.9 451.6 (73.2) (70.1) (6.2) 348.5 375.3
-------- -------- --------- --------- --------- -------- --------
Peter Cowgill, Executive Chairman, said:
"The global COVID-19 pandemic and, more recently, the UK's
formal exit from the European Union have presented a series of
unprecedented challenges which have severely tested all aspects of
our business including our multichannel capabilities, the
robustness of our operational infrastructure and the resilience of
our colleagues. However, at all times, the Group has strived to do
the right thing for all stakeholders.
"Notwithstanding these well publicised challenges, a number of
positive themes have been increasingly apparent through the year
which gives us confidence that, as we begin to emerge from the
worst of the disruption, JD is at the pinnacle of the global sports
fashion industry. We have a market leading multichannel proposition
which continues to enhance its relevance to consumers and has the
necessary agility to progress in an environment where the retailing
of international brands may see permanent global structural
change.
"Our positive outlook is reflected by the fact that, even with
the unique circumstances of store closures for a substantial period
of the year, the Group has retained substantially all of its record
profitability from the prior year with a profit before tax and
exceptional items of GBP421.3 million (2020: GBP438.8 million). We
are indebted to all of our teams in our different territories for
their determination and resilience in dealing with the potentially
life changing challenges of the past year and we fully acknowledge
the contribution from all of our colleagues in the delivery of this
excellent result.
"Our recent completed acquisitions of Shoe Palace and DTLR in
the United States together with the conditional acquisition of
Sizeer in Central and Eastern Europe are important steps in our
evolution which will transform our consumer connection in these
markets and further develop our key brand relationships.
"Whilst we must recognise the substantial level of temporary
store closures to date and ongoing, we remain confident that we are
well placed to benefit from the opportunities that prevail and, at
this early stage, our current best estimate is that the Group
headline profit before tax for the full year to 29 January 2022
will be in the range of GBP475 million to GBP500 million."
Enquiries:
JD Sports Fashion Plc Tel: 0161 767 1000
Peter Cowgill, Executive Chairman
Neil Greenhalgh, Chief Financial Officer
Jennifer Iveson, Investor Relations
MHP Communications Tel: 0203 128 8788
Andrew Jaques
Giles Robinson
Charles Hirst
Catherine Chapman
Executive Chairman's Statement
Group Developments
Introduction
The global COVID-19 pandemic and, more recently, the UK's formal
exit from the European Union have presented a series of
unprecedented challenges which have severely tested all aspects of
our business including our multichannel capabilities, the
robustness of our operational infrastructure and the resilience of
our colleagues. However, at all times, the Group has strived to do
the right thing for all stakeholders.
Notwithstanding these well publicised challenges, a number of
positive themes have been increasingly apparent through the year
which gives us confidence that, as we begin to emerge from the
worst of the disruption, JD is at the pinnacle of the global sports
fashion industry. We have a market leading multichannel proposition
which continues to enhance its relevance to consumers and has the
necessary agility to progress in an environment where the retailing
of international brands may see permanent global structural
change.
-- Deep consumer connection : The deep bond between JD and its
consumers is one that has been nurtured over a number of years.
Regardless of the events of the past year, our loyal customers
expect to engage with us through any channel and be presented with
an innovative and exciting product mix that meets their style
aspirations. Our teams have risen to the challenges associated with
the frequent shift in demand between channels resulting in a strong
retention of sales across our various markets, but particularly in
the UK and United States. We also continue to invest in data
analytics to further enhance our insight of the consumer.
-- Benefit of width in the category offer : Apparel sales,
principally casualwear and sportswear, performed strongly in the
year with sales of apparel ranges representing more than 50% of
revenues in the UK. Whilst we must obviously acknowledge the
increased levels of working and exercising at home, it is our
belief that the growth in casualwear and sportswear is not a
temporary phenomenon with the culture of casual attire in working
and social environments gathering momentum over a number of
years.
-- Multichannel approach provides a competitive advantage :
Regardless of the fact that stores in a number of markets have been
closed for extended periods of time, we believe it is clear that we
will build the strongest connection with consumers and gain
competitive advantage by operating stores in tandem with a strong
online offer. Stores provide a platform to physically showcase
product, offer consumers the opportunity to see and try the
product, and give us the operational flexibility and agility to
offer an enhanced speed of service for online orders.
-- JD is highly regarded by the brands : JD has a positive
relationship and is of increasing relevance to a significant number
of international brands who recognise that we share their vision of
an elevated marketplace and that we look to nurture collaborative
affiliations over the long term. They also acknowledge that we
actively seek to enhance the equity of a brand through a compelling
and differentiated proposition in stores and online which gives a
rich experience consistent with the premium nature of the product
mix. These brands particularly value the fact that we have a unique
relationship with our customer base that helps give immediate
credibility to new styles and ranges.
-- Strong awareness comes from international momentum: The
COVID-19 pandemic is likely to be the catalyst that will drive
further consolidation within the global retailing of the
international sports brands. The Group is in a strong position to
play a full part in this process with the Group's acquisition of
Finish Line in the United States in 2018, combined with the rapid
progress that we have made across a number of other international
markets, transforming both the awareness of the Group and our
reputation with potential partners. We are already seeing positive
consequences of this with the Group complementing its existing
fascias in the United States with the acquisition of the Shoe
Palace business, which completed in December 2020, and the DTLR
business, which completed after the year end in March 2021.
Recognising the importance of being able to offer sellers certainty
on execution in future competitive deal processes, the Group
undertook a successful placing shortly after the end of the
financial year with 58.4 million new shares admitted to the market
on 8 February 2021, a process which has raised approximately
GBP456.0 million (after costs).
Our positive outlook is reflected by the fact that, even with
the unique circumstances of store closures for a substantial period
of the year, the Group has retained substantially all of its record
profitability from the prior year with a profit before tax and
exceptional items of GBP421.3 million (2020: GBP438.8 million). On
a proforma basis under IAS 17 'Leases', with rents recognised
according to contractual terms, the headline profit before tax and
exceptional items would have been GBP38.8 million higher at
GBP460.1 million (2020: GBP26.8 million higher at GBP465.6
million).
This is a pleasing result although it should be recognised that
transitioning multichannel businesses to operate purely online for
a large part of the year necessitated additional costs principally
from customer acquisition marketing and operating a more manual
fulfilment process in our warehouses; a process which is even more
challenging with strict rules on social distancing. Additional
costs were also incurred in providing enhanced health and safety
measures at all locations, including stores, and catering for
flexible working arrangements for colleagues.
Significant M&A Transactions
Livestock
At the beginning of the period, we acquired Onepointfive
Ventures Limited in Canada which consists of four stores trading as
Livestock and a website trading as Deadstock. Based in Vancouver,
this business and its management team will provide the platform to
develop JD group fascias in Canada with the first Size? store
expected to open later in the Spring.
Xercise4Less
During the year we significantly increased our critical mass and
national presence with the acquisition, out of administration, of
an initial 50 gyms which had previously traded as Xercise4Less for
a total consideration of GBP24.2 million. We have subsequently
returned 11 of the acquired sites back to the relevant landlords
and currently anticipate retaining at least 36 of the remaining
gyms longer term, although negotiations on new leases are still
ongoing on a small number of sites. The programme of works to
convert these gyms to the JD fascia was accelerated through the
most recent temporary closure period with a total of 19 clubs now
converted to the JD format.
Shoe Palace
The transaction to acquire the Shoe Palace business completed on
14 December 2020. Based in San Jose, California, Shoe Palace was
established in 1993 by the Mersho family and, on acquisition, had
167 stores, the vast majority of which trade under the Shoe Palace
banner. More than half of the stores are located in California,
although there is also an established retail presence in Texas,
Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii, with the
store network supported by a developing e-commerce platform.
The acquisition of Shoe Palace significantly enhances our
connection with the Spanish speaking communities on the West Coast
and in the Southern border states and is therefore an excellent
complementary fit with our existing Finish Line and JD businesses
whose consumer connection is at its strongest in the industrial
states in the North and East of the United States.
DTLR
On 31 January 2021, we exchanged contracts on the conditional
acquisition of DTLR Villa LLC which is based in Baltimore,
Maryland. At exchange, this business had 247 stores trading
primarily as DTLR across 19 states. The transaction was subject to
certain conditions, including those related to the
Hart-Scott-Rodino Antitrust Improvements Act, with formal
completion taking place on 17 March 2021.
As with Shoe Palace, we fully recognise and appreciate the rich
connection that DTLR has with the communities where its stores are
located. Therefore, this is another excellent complementary fit to
our existing businesses, strengthening our connection with the
African American communities in the North and East of the United
States.
Sizeer
On 11 March 2021, we exchanged contracts on the conditional
acquisition of a 60% stake in Marketing Investment Group SpĆ³ ka
Akcyjna which is based in Krakow, Poland. At exchange, this
business had 410 stores trading as either Sizeer or 50 Style across
nine countries in Central and Eastern Europe. Completion of this
acquisition is subject to receiving clearance from the relevant
competition authorities which is anticipated before the end of May
2021. Once completed, this acquisition will provide us with an
infrastructure and management team for the future development of JD
in Central and Eastern Europe.
Update on Footasylum
The Competition and Markets Authority ('CMA') announced in its
Final Report in May 2020 that it had decided to prohibit the merger
with Footasylum and that, consequently, it required the Group to
fully divest its investment. This decision was subsequently quashed
on appeal in November 2020 by the Competition Appeal Tribunal
('CAT') who determined that the case should be passed back to the
CMA for full reconsideration. Subsequently, the CMA asked both the
CAT and the Court of Appeal for leave to appeal the CAT's decision
but, on each occasion, this was refused. Accordingly, the merger
with Footasylum will now be re-examined by the CMA; a process
expected to take several months.
The continuation of the temporary store closures into the new
financial year together with the reduction in the support available
for local authority rates have inevitably had a negative impact on
the expectations for the performance of Footasylum in the year to
29 January 2022. Furthermore, there is inevitably considerable
uncertainty as to whether levels of footfall into the Footasylum
stores, which attract an older demographic than JD, will recover to
historic levels which could adversely impact the longer term
viability of certain stores. As a consequence, the financial
projections no longer support the carrying value of the fascia name
and goodwill which arose on the acquisition with a charge of
GBP55.6 million recognised in relation to the impairment of these
assets.
In the meantime, whilst the results of Footasylum continue to be
consolidated within the Group's financial statements, we continue
to observe the CMA's ongoing enforcement undertakings which oblige
us to operate the Footasylum business separately from the rest of
the Group.
Supply Chain Developments & Brexit
We successfully kept our warehouses running throughout the
pandemic by adopting new operating procedures and investing in the
necessary modifications which ensured the safety of our colleagues
whilst on site. However, given that sales through online channels
will, in all probability, remain at an elevated level and that our
warehouses may need to operate with social distancing restrictions
for the foreseeable future, we have concluded that we require
additional warehousing capacity in the UK which can be dedicated to
the fulfilment of online orders. In this regard, we have signed a
Letter of Intent with Clipper Logistics Plc for Clipper to provide
a range of logistics operations, including warehousing and
e-fulfilment. These new services are planned to commence later in
the year. At this point, our warehouse at Kingsway will largely
focus on the supply of product for physical stores which better
suits the current automation equipment at the site.
Further, the terms of the UK's trading agreement with the
European Union mean that we no longer enjoy 'tariff free'
frictionless trading with our former European partners. As a
consequence, we are now incurring some duties and disruption from
Customs checks on the transfer of goods from the UK into EU
countries. We have been able to reduce our exposure to the adverse
consequences of Brexit by opening an 80,000 sqft warehouse in
Belgium in Autumn 2020 which is fulfilling a large proportion of
our core ranges and fastest moving lines required for stores in
Mainland Europe. This site is functioning very well but it does not
provide a solution for either online orders or product destined for
the Republic of Ireland. In this regard, we are currently fitting
out a 65,000 sqft warehouse near Dublin which will become
operational in the second half of this year. We also continue to
review opportunities for a larger permanent facility in Europe
which can process substantially all of the volume required for
stores and online orders in Mainland Europe although it will likely
be Autumn 2022 before an enlarged facility would be available for
use.
COVID-19 Lease Negotiations
It has been well publicised that we have withheld the payment of
some rents across our global retail estate this year where we have
been forced to close stores as a result of the pandemic. We have
worked tirelessly with our landlord partners in all markets to find
solutions to support the business through these closure periods. We
have now reached agreement in the vast majority of cases and
continue to engage with the small number of those landlords who, to
date, have not been prepared to share any of the financial burden
during this challenging time when our stores have not been
trading.
Government Support
The Group acknowledges the various public sector initiatives
which were put in place in a number of territories where it
operates to provide support to businesses on taxation, including
those related to property occupation, and the costs of employment.
This support included the furlough scheme, and its equivalents in
other countries, which achieved their objectives of conserving jobs
as, without this support, it is likely we would have had to make
tens of thousands of our colleagues, particularly those who work in
stores, redundant. To help minimise the financial impact on
affected colleagues, the Group has voluntarily enhanced the
furlough payments in the UK for those colleagues paid above the
GBP2,500 monthly cap.
During the year, the Group was granted a GBP300 million facility
under the UK Government's Covid Corporate Financing Facility
Scheme. The Group did not access this facility at any time with the
scheme closing on 22 March 2021.
Sports Fashion
UK and Republic of Ireland
JD & Size?
We are encouraged by the resilient nature of trading in our core
UK and Republic of Ireland market throughout the year. During the
initial closure period in the Spring approximately 70% of the
combined store and online revenues from the prior year were
retained through solely digital channels. This retention rate
increased to 100% through November when stores in the UK were
closed again. There is cause for optimism in the future of our
store estate though as, even with materially lower footfall into
many city centres and major shopping malls, sales in like for like
stores grew by more than 4% in the Q3 period from August to
October, which was largely a period free from restrictions.
Recognising the benefits that accrue from investing in our
retail estate in terms of consumer engagement, we have continued
with our programme of upsizes in key locations with bigger stores
opened during the year in Exeter, Plymouth and Brighton. We intend
to continue with this programme in the new financial year with new
larger format stores scheduled to open in a number of key locations
including Belfast, Edinburgh and Stratford, East London.
Premium Fashion
Our premium brand Fashion businesses are an important part of
our Group, further elevating our overall proposition. Mainline
Menswear, which to all extents is a pureplay online business, had a
very strong year in particular with new customers attracted by its
reputation for a high quality digital and customer service
experience. Elsewhere, in those businesses which have both physical
and digital offers, we are reassured by the fact that the retention
of sales through the various temporary closure periods was broadly
consistent with that seen in JD. We continue to make selective
complementary acquisitions in this area where they expand our
geographical presence or brand relationships.
Gyms
The lockdowns in the year have brought into sharper focus the
physical and mental health benefits of regular exercise. Therefore,
we are pleased to welcome our members back to our clubs in England
which have now re-opened and look forward to re-opening in the
other nations shortly. We are confident that our JD and X4L clubs
offer a safe environment for our members, with significant
investments made in reconfiguring the space in our clubs to
facilitate social distancing and providing sanitisation
stations.
It is inevitable that the COVID-19 pandemic resulted in a
temporary slowing of the organic club opening programme with only
one new gym, being a second club in Glasgow, opening during the
year. We are optimistic that we will return to previous levels of
activity in the new financial year with at least five further
organic clubs opening this year complementing further conversions
of the acquired X4L clubs.
Europe
JD & Size?
Across Europe, the average retention of sales through the period
of the temporary store closures in the Spring was approximately 35%
with a stronger retention in Northern Europe where online is more
mature. Footfall was initially slow to recover as stores re-opened
although it progressively improved through the Summer and early
Autumn. Like for like store sales were positive in Q3 in many
markets although the significant exception to this were the stores
in Iberia where a large part of employment, and consequently the
wider economy, is linked to tourism. Restrictions were reintroduced
before Christmas in a number of markets including the closure of
all stores in Germany and the Netherlands. The retention of sales
through this closure period in these countries was approximately
60%, which is slightly ahead of the retention that we saw in the
Spring. There continue to be partial closures or restricted trading
hours elsewhere including Italy, France and Spain.
As would be expected, as a direct result of the COVID-19
outbreak, the number of new store openings this year was reduced
with 31 net new stores opened during the year, which included a
flagship style store on the key shopping street of Rue de Rivoli in
the centre of Paris. We expect to increase the number of new stores
in the new financial year with openings closer to our previously
stated ambition of one new store per week on average.
Sprinter & Sport Zone
As with JD, online trading is less mature for Sprinter and Sport
Zone across Iberia and, consequently, only 20% of the combined
physical and digital revenues in the prior year were retained
online in the period of the national store closures in the
Spring.
We were encouraged though with trading through the second half
of the year, prior to the second national closure in Portugal in
early January 2021, with total growth across the region of around
10%. There have also been further temporary closure periods in
Spain although these have been at the local rather than national
level with some restrictions limited to weekends only. Restrictions
across both Spain and Portugal have now begun to ease and we are
confident that we are well placed to progress positively.
Asia Pacific
JD
We are pleased with the further positive developments in
Australia with 30 stores now trading (2020: 24) after six stores
were opened in the year. Other than the temporary closure of seven
stores in the Melbourne area through September and October, the
stores in Australia were largely able to remain open throughout the
year.
Elsewhere, the performance in our other territories was
negatively impacted by the lack of tourism from China which is a
strong driver of footfall in Malaysia and South Korea in
particular. We would not expect the performance in these markets to
materially improve until there is a re-opening of the tourist
sector.
North America
Finish Line & JD
The Finish Line and JD businesses have had an exceptional year.
There are a number of reasons for this:
-- The United States is widely regarded as the most mature
market in the world for online trading with our digital team at
Finish Line highly regarded within the industry. As such, it is not
surprising that, of all our global businesses, it was Finish Line
and JD in the United States that saw the greatest retention rate
through the temporary closure period in the first half with online
revenues equivalent to approximately 75% of the combined physical
and digital revenues in the prior year.
-- Consistent with other national retailers in the United
States, our businesses benefitted significantly from May to July
from the fiscal stimulus made available by the Federal Government.
Total revenues across physical and digital channels increased by
nearly 50% in this period. This strong demand resulted in sector
wide lower inventory levels which are not expected to normalise
until later in 2021. Consequently, there was less promotional
activity through the rest of the year than might have been expected
which has benefitted gross margins in the second half of the
year.
-- We are encouraged by the development of JD in the United
States with 49 stores trading at the end of the year (2020: 11)
including the conversion of 37 former Finish Line stores, the
majority of which were converted in the lower cost 'badge flip'
style, complementing the opening of our first flagship store in
Times Square, New York. It is our intention to convert up to 50
more Finish Line stores to JD in the current financial year.
Financial Performance
Whilst COVID-19 has inevitably constrained our short term
progress, we firmly believe that we have a robust premium branded
multichannel proposition with our loyal consumers comfortable
engaging with us in any channel. The resilience of our businesses
is reflected in the fact that, despite the challenges of the year,
the profitability in Sports Fashion has largely been maintained
with a profit before tax and exceptional items of GBP433.5 million
(2020: GBP468.5 million). On a proforma basis under IAS 17 'Leases'
the profit before tax and exceptional items would have been
GBP469.5 million (2020: GBP492.2 million).
Included within the result is a very positive performance from
the Finish Line and JD businesses in the United States with the
Government stimulus in the first half of the year driving a
material, but short term, impact on performance with total revenues
from these businesses increasing to GBP1,704.3 million (2020:
GBP1,601.5 million) and the profit before tax and exceptional items
increasing significantly to GBP156.6 million (2020: GBP94.2
million). Elsewhere in North America, in the six week period after
completion, the Shoe Palace business has contributed a profit
before tax and exceptional items of GBP13.9 million with revenues
of GBP56.1 million.
Overall gross margins increased within Sports Fashion by 1.0% to
48.4% (2020: 47.4%). This is largely due to a stronger margin in
the United States with strong demand resulting in lower levels of
promotional activity in the overall market compared to previous
years.
After recognising exceptional items in the period of GBP76.9
million (2020: GBP40.6 million) principally relating to the
impairment of intangible assets arising on the acquisition of the
Footasylum business in previous years, the profit before tax in
Sports Fashion was GBP356.6 million (2020: GBP427.9 million).
Outdoor
We acknowledge that the restructure of Go Outdoors in the first
half of the year was a difficult process. However, we believe that
it was a necessary exercise as the inflexible and uncompetitive
terms of the historic property leases in the business meant that Go
Outdoors was in danger of becoming a material drain on Group
profitability for the foreseeable future. The Group protected the
interests of creditors in this process by honouring all liabilities
with regards to branded stock suppliers, employees, HMRC taxation,
customer returns and historic gift card sales. Further, all pre --
existing Go Outdoors employees transferred across to the new
business with their previous terms and conditions of employment
preserved. To date, two significantly loss-making stores have been
closed with new terms either completed or substantially agreed on a
further 53 stores. Dialogue continues with landlords on the
remaining stores.
This restructure has given Go Outdoors a positive platform from
which to develop and we intend to invest in all aspects of the
business to provide an instore and digital experience which
inspires consumers to get outdoors. We will do this by presenting
authoritative product offers in key categories. This includes
fishing where we have now started to integrate the Fishing Republic
business into larger Go Outdoors stores by creating specialist
areas for fishing products. In December 2020, we further delivered
on this approach through the acquisition of the highly regarded
Naylors equestrian business which, on acquisition, had three
standalone stores. As with Fishing Republic, it is our intention to
include Naylors branded equestrian areas in Go Outdoors stores
where space allows.
The Go Outdoors, Blacks, Millets and Ultimate Outdoors
businesses now operate on common merchandising systems with shared
commercial resources. Further, all stock is now fulfilled from a
separate dedicated warehouse at Middlewich. This operational
integration provides the most cost efficient platform for these
businesses to develop.
We are encouraged by the performance of all of our Outdoor
businesses in the second half of the year. In the Q3 period, which
was largely a period free from trading restrictions, we saw sales
growth across the combined physical and digital channels of more
than 10%. Many of our stores had to be closed again at various
times through Q4 with total sales retention through the closure
periods of approximately 80%, which was ahead of the retention
rates that we saw in the initial closure period in the Spring.
Financial Performance
The positive consequences of the restructuring of the Outdoor
businesses is reflected in the fact that, even with the stores
closed for a number of months, Outdoor reduced its loss before
exceptional items for the full year to GBP6.1 million (2020: loss
of GBP23.5 million). The positive performance through the second
half is reflected in the fact that our businesses made a profit
before exceptional items in this period of GBP10.7 million (2020:
loss of GBP3.4 million).
Overall gross margins within Outdoor for the full year increased
by 0.3% to 42.2% (2020: 41.9%).
After recognising exceptional items in the period of GBP20.4
million (2020: GBP49.7 million) principally relating to the
restructure of the Go Outdoors business in the first half of the
year, the loss before tax in Outdoor reduced to GBP26.5 million
(2020: GBP73.2 million).
Financial Summary
Revenue, Gross Margin and Overheads
Notwithstanding the temporary closure of stores in a number of
countries at various times in the year, total revenue for the Group
increased by approximately 1% in the year to GBP6,167.3 million
(2020: GBP6,110.8 million). This includes total revenues of
GBP1,760.4 million from our combined businesses in the United
States (2020: GBP1,601.5 million) of which Shoe Palace, which was
only part of the Group for approximately six weeks following its
acquisition on 14 December 2020, contributed GBP56.1 million. Given
the temporary closure periods in the year, it would not be
meaningful to present sales on a like for like basis.
Total gross margin in the year of 48.0% was slightly ahead of
the prior year (2020: 47.0%) largely due to a stronger margin in
the United States with strong demand consequent to the federal
fiscal stimulus driving lower levels of promotional activity in the
overall market compared to previous years.
Profit Before Tax
Profit before tax and exceptional items decreased slightly to
GBP421.3 million (2020: GBP438.8 million).
The profit before tax and exceptional items includes a profit of
GBP170.5 million (2020: GBP94.2 million) from our combined
businesses in the United States of which Shoe Palace contributed
GBP13.9 million in the six weeks post acquisition.
There were exceptional items in the year of GBP97.3 million
(2020: GBP90.3 million). These exceptional items comprised:
IFRS 16 Proforma IAS
17
2021 2020 2021 2020
GBPm GBPm GBPm GBPm
Impairment of goodwill and fascia
names (1) 56.2 43.1 56.2 43.1
Movement in fair value of put and
call options (2) 20.7 31.4 20.7 31.4
Restructuring of Go Outdoors (3) 20.4 - 27.9 -
Integration of Outdoor systems and
warehousing (4) - 7.2 - 7.2
Integration of Sport Zone into Sprinter
infrastructure (5) - 8.6 - 8.6
------ ------ ------- ------
Total exceptional charge 97.3 90.3 104.8 90.3
====== ====== ======= ======
1. The impairment in the current period principally constitutes
a charge of GBP55.6 million relating to the impairment of the
goodwill and fascia name arising in prior years on the acquisition
of Footasylum. The impairment in the prior period relates to the
impairment of the goodwill arising in prior years on the
acquisition of Go Outdoors Topco Limited and Choice Limited.
2. Movement in the fair value of the liabilities in respect of the put and call options.
3. The net impact consequent to the restructuring of Go Outdoors
in the period including a charge of GBP33.3 million in relation to
the impairment of intangible assets, a charge of GBP4.9 million in
relation to the impairment of leasehold improvements and a credit
of GBP17.8 million in relation to the extinguishment of lease
commitments (the credit in relation to the extinguishment of lease
commitments under IAS 17 'Leases' was GBP10.3 million).
4. Costs arising from the integration and consolidation of the
principal IT systems, warehousing and other infrastructure in Go
Outdoors.
5. Costs associated with transferring the stocks and other
operations of Sport Zone into the Sprinter infrastructure.
Group profit before tax decreased by approximately 7% to
GBP324.0 million (2020: GBP348.5 million).
Proforma Results Under IAS17 'Leases'
On a proforma basis under IAS 17 'Leases', with rents recognised
according to contractual terms, the headline profit before tax and
exceptional items for the Group would have been GBP38.8 million
higher at GBP460.1 million (2020: GBP26.8 million higher at
GBP465.6 million). After exceptional items totalling GBP104.8
million (2020: GBP90.3 million), the profit before tax on the same
proforma basis would have been GBP355.3 million (2020: GBP375.3
million).
Cash and Working Capital
The net cash balance at the end of the period was GBP795.4
million (2020: GBP429.9 million) with very strong cash generation
in the United States reflecting the exceptional trading in that
country, particularly through the first half. The net cash at 30
January 2021 is stated net of GBP68.9 million ($94.9 million) in
relation to deferred consideration on the acquisition of Shoe
Palace which is due to be paid, with no conditionality or
dependence on performance criteria, to the Mersho Brothers on
various dates through 2021. The net cash position at the period end
is also stated before the cash consideration paid on completed
acquisitions in the new year to date, which total approximately
GBP380 million. The net cash also includes a number of temporary
factors which, in aggregate across the Group, total in excess of
GBP125 million and will likely reverse in the first half of the
year to 29 January 2022. This total principally relates to deferred
rents as we continue to reach agreements with the relevant
landlords.
Stocks at the end of the period of GBP813.7 million are broadly
consistent with the prior year (2020: GBP811.8 million). However,
this includes GBP50.9 million of stocks in businesses which were
acquired in the year. Therefore, stocks in the like for like
businesses of GBP762.8 million are GBP49.0 million lower than the
previous year largely as a result of lower stocks in the combined
Finish Line and JD business in the United States where the period
end stocks of $167.7 million were approximately 40% lower than the
previous year (2020: $282.2 million). As with other retailers in
the United States, we have recently experienced some minor delays
in receiving product due to delays at ports. To date, this is not
materially constraining the overall financial performance with
margins ahead of prior year levels. Some new product launches have
had to be pushed back though and we continue to work with our
international brand partners to ensure the timely flow of
product.
COVID-19 has inevitably had a significant impact on the projects
which we have undertaken in the period with gross capital
expenditure (excluding disposal costs) decreased to GBP132.0
million (2020: GBP177.2 million) as construction activity,
including the fitting out of stores, was temporarily paused on
occasions in a number of countries. Despite these challenges, the
primary focus of our capital expenditure remains our physical
retail fascias with a spend in the period of GBP73.5 million (2020:
GBP106.5 million). It is significant that whilst the overall spend
on our retail fascias may have reduced, the spend across our
combined retail fascias in North America actually increased
slightly to GBP21.0 million (2020: GBP20.4 million).
The Group's principal bank facilities continue to comprise a
GBP700 million committed syndicated Revolving Credit Facility
('RCF') in the UK, which expires on 6 November 2024 and a
syndicated Asset Based Lending Facility ('ABL') in the United
States which has a maximum revolving advance amount of
approximately $300 million and expires on 18 June 2023. Neither
facility was drawn down at the period end (2020: UK RCF GBPnil; US
ABL $nil).
Subsequent to the period end, the Group undertook a successful
placing with 58.4 million new shares admitted to the market on 8
February 2021, a process which has raised approximately GBP456.0
million (after costs).
We will continue to use our cash resources to make selective
acquisitions and investments where they benefit our strategic
development.
Dividends and Earnings per Share
Given the significant contribution to profitability from the
Group's international operations, particularly those in the United
States, the Board has concluded, after a careful and considered
review, that it is appropriate to resume the payment of dividends.
However, the Board also recognises that, in the current situation,
dividends should be modest with funding retained for our ongoing
development opportunities. Accordingly, the Board proposes paying a
final dividend of 1.44p (2020: nil) per ordinary share which is at
the same level as the final dividend made after the year to 2
February 2019. Subject to shareholder approval at our AGM, the
proposed final dividend will be paid on 2 August 2021 to all
shareholders on the register at 25 June 2021.
The basic earnings per ordinary share decreased by 8.9% to
23.05p (2020: 25.29p).
The adjusted earnings per ordinary share before exceptional
items decreased by 6.0% to 32.19p (2020: 34.26p).
Store Portfolio
During the period, store numbers have moved as follows:
Sports Fashion
Period New Stores Transfers Acquired Closures Period
Start End
JD & Size?
UK & Republic of
Ireland 402 9 - - (11) 400
Europe 304 35 1 - (5) 335
Asia Pacific 64 8 - - (3) 69
United States 11 1 37 - - 49
Size? 37 2 - - (6) 33
------- ----------- ---------- --------- --------- -------
818 55 38 - (25) 886
------- ----------- ---------- --------- --------- -------
Finish Line, Livestock & Shoe Palace
Finish Line (own) 508 - (37) - (7) 464
Finish Line (Macy's) 295 1 - - (6) 290
Livestock - - - 4 - 4
Shoe Palace (i) - - - 167 - 167
803 1 (37) 171 (13) 925
------- ----------- ---------- --------- --------- -------
Fashion: UK 153 2 - 4 (5) 154
Other Europe (ii) 427 8 (1) - (3) 431
Other Asia Pac 2 - - - (2) -
Total Sports Fashion 2,203 66 - 175 (48) 2,396
------- ----------- ---------- --------- --------- -------
(i) Includes four stores trading as Nice Kicks
(ii) Chausport (France), Sprinter (Spain & Canary Islands),
Sport Zone (Portugal) and Perry Sport / Aktiesport (the
Netherlands)
Outdoor
Period New Stores Acquired Closures Period
Start End
Blacks 57 - - - 57
Millets 97 1 - (5) 93
Ultimate Outdoors 6 - - (1) 5
Tiso 13 - - - 13
Go Outdoors 67 1 - (2) 66
Go Fishing 5 - - (2) 3
Naylors - - 3 - 3
------- ----------- --------- --------- -------
Total Outdoor 245 2 3 (10) 240
------- ----------- --------- --------- -------
People
We are indebted to all of our teams in our different territories
for their determination and resilience in dealing with the
potentially life changing challenges of the past year and we fully
acknowledge the contribution that our colleagues made in delivering
this excellent result. We particularly recognise the efforts of our
colleagues who work in our logistics and retail operations whose
roles do not lend themselves to working from home and who have
perhaps had to deal with the greatest amount of change in their
roles. Whilst there may be some cause for optimism at this time, we
are not complacent about the ongoing threat to health from COVID-19
and I want to assure all our colleagues that their safety, and that
of our consumers, has been and will always be our number one
priority.
In a rapidly changing global environment, our colleagues will
have both challenges and opportunities in the future. It is vital
therefore that we continue to attract the best talent for our
business. In this regard, we are delighted to be part of the UK
Government's 'Kickstart Scheme' and will be providing national work
placements across our Retail Stores, Distribution Centre and Head
Office throughout the year for 16-24 year olds on Universal Credit
who have been impacted by the negative effects of the pandemic on
the employment market. As retailers of the latest and most
exclusive sports fashion and outdoor clothing, footwear and
equipment we offer many different career opportunities for young
people who want to develop in a fast-paced and exciting company and
Kickstart is the perfect way for them to get a flavour of our
operations whilst being fully supported to gain the essential
skills that they will need in the future.
The Board welcomes the initiative and focus of the Parker Review
and will engage with the Parker Review as appropriate, just as it
did with the Alexander-Hampton Review in recent years. The Board
strives to build a diverse and inclusive team and to promote a
diverse and inclusive culture throughout the business. The success
of the Group is in its ability to speak to and identify with its
consumers and, as such, it is crucial that the employees of the
Group, at all levels, reflect the diverse nature of our consumers
and of our communities. It is the Board's strong belief that if all
colleagues of the Group feel supported and respected and are
inspired to grow and develop as individuals then this will
ultimately serve our business better and promote the long term
success of the Group.
The Group is absolutely committed to promoting policies which
ensure that colleagues and customers are treated equally regardless
of ethnicity, social origin, gender, sexual orientation, disability
or age. Following the tragic death of George Floyd in the United
States, we worked with our teams around the world and with both the
JD Foundation and the Finish Line Youth Foundation to ensure that,
across the Group, we play an integral part in what is hopefully a
united global approach to eradicate not just racism but all forms
of discrimination from society.
We have launched our Inclusivity Campaign which will support our
promise to educate and train our colleagues, with a focus on key
topics such as Equality, Diversity, Biases and Cultural
Intelligence. Alongside the introduction of our Diversity &
Inclusion forums for our colleagues, we are committed to engage,
learn and promote dialogue around potentially sensitive subjects in
order to improve understanding and awareness throughout the
business.
Environmental, Social and Governance Update
Prior to the Group's entry into the FTSE 100, the Group founded
a formal Environmental, Social and Governance ('ESG') Committee to
drive a step-change in the transparency and performance comparison
on ESG matters within the Group. The ESG Committee determines
ESG-related strategy, risk assessment and the monitoring of ESG
performance across the Group's respective fascias and territories.
The ESG Committee is also responsible for the assessment and
publication of our ESG-related principal risks and the
communication of our strategy to colleagues, customers and
investors.
Whilst our physical stores have seen significant interruption
during the year, our desire to continue making progress is
undiminished with the 2021 Annual Report and Accounts detailing our
further achievements in the year and our objectives for future
years. A key tool within the communication process is our corporate
website which has been re-purposed over the last two years to
provide detailed explanations and case studies highlighting our
progress on ESG matters.
Our achievements in the year include:
-- The Group achieved an 'A-' rating for our 2020 Carbon
Disclosure Project ('CDP') Climate Change assessment which
outperformed our sector benchmark by three grades.
-- We attained a 'B' rating for our first submission within the
CDPs 'Water Security' category which outperformed our sector
benchmark by two grades.
-- The Group achieved recognition as a 'Committed' supporter by
the Science Based Targets initiative (SBTi) board in December
2020.
-- We launched our '#IAmSustainable' learning programme, with
the aim of helping our colleagues become better protectors of the
planet, whilst also achieving valuable skills accreditation.
-- The Group achieved an independently audited 'zero to
landfill' accreditation for our largest directly operated site
(Kingsway Distribution Centre).
-- The Group has reduced its use of virgin polyester in its
private label manufacturing whilst increasing the use of
responsibly sourced cotton.
-- In October 2020, the JD Foundation (our primary vehicle for
social and community support) announced a two-year partnership with
Blueprint For All (formerly known as the Stephen Lawrence
Charitable Trust) as part of our Diversity and Inclusion
programme.
Current Trading and Outlook
After a difficult start to the year with a further period of
store closures in a number of markets and the operational
disruption from Brexit, it is pleasing to report that stores in our
domestic market have now started to re-open. We are absolutely
confident that JD's premium multi-brand proposition retains its
consumer appeal and we look forward to welcoming customers back
into stores in our remaining markets in due course. We are
encouraged with trading to date in the new year with levels of
sales retention in those markets which have experienced closures
running slightly ahead of those in Spring 2020.
Our recent completed acquisitions of Shoe Palace and DTLR in the
United States together with the conditional acquisition of Sizeer
in Central and Eastern Europe are important steps in our evolution
which will transform our consumer connection in these markets and
further develop our key brand relationships. We look forward to
working with our new colleagues in these businesses to further
enhance their market leading propositions.
Whilst we must recognise the substantial level of temporary
store closures to date and ongoing, we remain confident that we are
well placed to benefit from the opportunities that prevail and, at
this early stage, our current best estimate is that the Group
headline profit before tax for the full year to 29 January 2022
will be in the range of GBP475 million to GBP500 million.
Our next scheduled update will take place upon the announcement
of our Interim Results which is scheduled for 14 September
2021.
Peter Cowgill
Executive Chairman
13 April 2021
Consolidated Income Statement
For the 52 weeks ended 30 January 2021
52 weeks to 52 weeks to
30 January 2021 1 February 2020
Note GBPm GBPm
Revenue 6,167.3 6,110.8
Cost of sales (3,205.7) (3,236.0)
------------------ ------------------
Gross profit 2,961.6 2,874.8
Selling and distribution expenses
- normal (2,126.4) (2,020.2)
Administrative expenses - normal (381.2) (348.6)
Administrative expenses - exceptional (97.3) (90.3)
Other operating income 28.3 10.9
Operating profit 385.0 426.6
Before exceptional items 482.3 516.9
Exceptional items 3 (97.3) (90.3)
------------------
Operating profit 385.0 426.6
Financial income 1.5 1.7
Financial expenses (62.5) (79.8)
------------------ ------------------
Profit before tax 324.0 348.5
Income tax expense (94.8) (97.8)
Profit for the period 229.2 250.7
------------------ ------------------
Attributable to equity holders
of the parent 224.3 246.1
Attributable to non-controlling
interest 4.9 4.6
Basic earnings per ordinary share 4 23.05p 25.29p
------------------ ------------------
Diluted earnings per ordinary
share 4 23.05p 25.29p
------------------ ------------------
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 30 January 2021
52 weeks to
30 January 52 weeks to
2021 1 February 2020
GBPm GBPm
Profit for the period 229.2 250.7
Other comprehensive income:
Items that may be classified subsequently
to the Consolidated Income Statement:
Exchange differences on translation
of foreign operations (20.0) (21.5)
Total other comprehensive income for
the period (20.0) (21.5)
------------ -----------------
Total comprehensive income and expense
for the period
(net of income tax) 209.2 229.2
------------ -----------------
Attributable to equity holders of the
parent 200.7 227.2
Attributable to non-controlling interest 8.5 2.0
------------ -----------------
Consolidated Statement of Financial Position
As at 30 January 2021
As at As at
30 January 1 February
2021 2020
GBPm GBPm
Assets
Intangible assets 819.7 413.7
Property, plant and equipment 2,316.4 2,420.1
Other assets 63.2 47.9
Investment in associate 2.7 2.6
Deferred tax assets 40.6 -
Total non-current assets 3,242.6 2,884.3
------------ --- --------------
Inventories 813.7 811.8
Trade and other receivables 141.2 183.9
Cash and cash equivalents 964.4 465.9
------------ --- --------------
Total current assets 1,919.3 1,461.6
------------ --- --------------
Total assets 5,161.9 4,345.9
------------ --- --------------
Liabilities
Interest-bearing loans and borrowings (120.9) (20.4)
Lease liabilities (301.8) (285.0)
Trade and other payables (1,102.0) (900.7)
Provisions (0.7) -
Income tax liabilities (29.5) (34.3)
------------ --- --------------
Total current liabilities (1,554.9) (1,240.4)
------------ --- --------------
Interest-bearing loans and borrowings (48.1) (15.6)
Lease liabilities (1,628.0) (1,707.7)
Other payables (374.4) (80.5)
Provisions (5.1) -
Deferred tax liabilities (55.0) (12.5)
------------ --- --------------
Total non-current liabilities (2,110.6) (1,816.3)
------------ --- --------------
Total liabilities (3,665.5) (3,056.7)
------------ --- --------------
Total assets less total liabilities 1,496.4 1,289.2
------------ --- --------------
Capital and reserves
Issued ordinary share capital 2.4 2.4
Share premium 11.7 11.7
Retained earnings 1,560.8 1,245.7
Other reserves (336.2) (40.6)
Total equity attributable to equity holders
of the parent 1,238.7 1,219.2
Non-controlling interest 257.7 70.0
------------ --- --------------
Total equity 1,496.4 1,289.2
------------ --- --------------
Consolidated Statement of Changes in Equity
For the 52 weeks ended 30 January 2021
Total Equity
Attributable
Foreign to Equity
Ordinary Currency Holders
Share Share Retained Other Translation of The
Capital Premium Earnings Equity Reserve Parent
GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 2 February
2019 2.4 11.7 1,016.3 (36.3) 14.7 1,008.8
Profit for the period - - 246.1 - - 246.1
Other comprehensive
income:
Exchange differences
on translation of foreign
operations - - - - (18.9) (18.9)
-------------- --------------
Total other comprehensive
income - - - - (18.9) (18.9)
---- ---------- ----------- --------- -------------- --------------
Total comprehensive
income for the period - - 246.1 - (18.9) 227.2
Dividends to equity
holders - - (16.7) - - (16.7)
Put options held by
non-controlling interest - - - (0.1) - (0.1)
Balance at 1 February
2020 2.4 11.7 1,245.7 (36.4) (4.2) 1,219.2
---- ---------- ----------- --------- -------------- --------------
Profit for the period - - 224.3 - - 224.3
Other comprehensive
income:
Exchange differences
on translation of foreign
operations - - - - (23.6) (23.6)
---- ---------- ----------- --------- -------------- --------------
Total other comprehensive
income - - - - (23.6) (23.6)
---- ---------- ----------- --------- -------------- --------------
Total comprehensive
income for the period - - 224.3 - (23.6) 200.7
Dividends to equity - - - - - -
holders
Put options held by
non-controlling interest - - - (272.0) - (272.0)
Acquisition of non-controlling
interest - - (3.7) - - (3.7)
Divestment of non-controlling
interest - - 94.5 - - 94.5
Non-controlling interest - - - - - -
arising on acquisition
Non-controlling interest - - - - - -
share capital issued
Balance at 30 January
2021 2.4 11.7 1,560.8 (308.4) (27.8) 1,238.7
---- ---------- ----------- --------- -------------- --------------
Consolidated Statement of Changes in Equity (continued)
For the 52 weeks ended 30 January 2021
Total Equity Attributable
to Equity Holders Non-Controlling
of The Parent Interest Total
GBPm GBPm Equity
GBPm
Balance at 2 February 2019 1,008.8 68.0 1,076.8
Profit for the period 246.1 4.6 250.7
Other comprehensive income:
Exchange differences on translation
of foreign operations (18.9) (2.6) (21.5)
-------- ------------------ ---------
Total other comprehensive
income (18.9) (2.6) (21.5)
-------- ------------------ ---------
Total comprehensive income
for the period 227.2 2.0 229.2
Dividends to equity holders (16.7) (1.3) (18.0)
Put options held by non-controlling
interest (0.1) - (0.1)
Non-controlling interest arising
on acquisition - 1.3 1.3
Balance at 1 February 2020 1,219.2 70.0 1,289.2
-------- ------------------ ---------
Profit for the period 224.3 4.9 229.2
Other comprehensive income:
Exchange differences on translation
of foreign operations (23.6) 3.6 (20.0)
-------- ------------------ ---------
Total other comprehensive
income (23.6) 3.6 (20.0)
-------- ------------------ ---------
Total comprehensive income
for the period 200.7 8.5 209.2
Dividends to equity holders - (1.2) (1.2)
Put options held by non-controlling
interest (272.0) - (272.0)
Acquisition of non-controlling
interest (3.7) (1.7) (5.4)
Divestment of non-controlling
interest 94.5 181.4 275.9
Non-controlling interest arising
on acquisition - 0.4 0.4
Non-controlling interest share
capital issued - 0.3 0.3
Balance at 30 January 2021 1,238.7 257.7 1,496.4
-------- ------------------ ---------
Consolidated Statement of Cash Flows
For the 52 weeks ended 30 January 2021
52 weeks to 52 weeks to
30 January 1 February
2021 2020
GBPm GBPm
Cash flows from operating activities
Profit for the period 229.2 250.7
Income tax expense 94.8 97.8
Financial expenses 62.5 79.8
Financial income (1.5) (1.7)
Depreciation and amortisation of non-current
assets 499.2 450.0
Forex losses on monetary assets and liabilities 3.6 9.9
Impairment of other intangibles and non-current
assets 8.7 12.9
Loss on disposal of non-current assets 1.2 6.3
Other exceptional items 2.9 47.2
Impairment of goodwill and fascia names
(exceptional) 89.5 43.1
Impairment of property, plant and equipment 4.9 -
(exceptional)
Decrease / (increase) in inventories 63.5 (9.5)
Decrease / (increase) in trade and other
receivables 46.2 (13.0)
Increase in trade and other payables 150.8 58.1
Interest paid (7.6) (7.9)
Lease interest (54.9) (71.9)
Income taxes paid (130.4) (97.8)
------------ ------------
Net cash from operating activities 1,062.6 854.0
------------ ------------
Cash flows from investing activities
Interest received 1.5 1.7
Proceeds from sale of non-current assets 2.1 3.1
Investment in software development (19.1) (23.2)
Acquisition of property, plant and equipment (105.2) (147.2)
Acquisition of non-current other assets (7.7) (6.8)
Acquisition of subsidiaries, net of cash
acquired (206.3) (89.3)
Net cash used in investing activities (334.7) (261.7)
------------ ------------
Cash flows from financing activities
Draw down / (repayment) of interest-bearing
loans and borrowings 51.6 (88.6)
Repayment of lease liabilities (285.2) (264.8)
Subsidiary shares issued in the period 0.3 -
Acquisition and divestment of non-controlling (5.2) -
interests
Equity dividends paid - (16.7)
Dividends paid to non-controlling interest
in subsidiaries (1.2) (1.3)
------------ ------------
Net cash used in financing activities (239.7) (371.4)
------------ ------------
Net increase in cash and cash equivalents 488.2 220.9
Cash and cash equivalents at the beginning
of the period 460.3 237.7
Foreign exchange gains on cash and cash
equivalents 0.2 1.7
------------ ------------
Cash and cash equivalents at the end
of the period 948.7 460.3
------------ ------------
Analysis of Net Cash
As at 30 January 2021
At 1 Non- At 30
February On acquisition Cash cash January
2020 of subsidiaries flow movements 2021
GBPm GBPm GBPm GBPm GBPm
Cash at bank and in hand 465.9 3.3 495.0 0.2 964.4
Overdrafts (5.6) - (10.1) - (15.7)
----------- ------------------ ------- ------------ ------------
Cash and cash equivalents 460.3 3.3 484.9 0.2 948.7
Interest-bearing loans
and borrowings:
Bank loans (29.7) (0.6) (52.4) (1.7) (84.4)
Other loans (0.7) (73.1) 0.8 4.1 (68.9)
----------- ------------------ ------- ------------ ------------
Net cash / (financial
debt) 429.9 (70.4) 433.3 2.6 795.4
Lease liabilities (1,992.7) (143.2) 285.2 (79.1) (1,929.8)
----------- ------------------ ------- ------------ ------------
Net debt (1,562.8) (213.6) 718.5 (76.5) (1,134.4)
----------- ------------------ ------- ------------ ------------
1. Basis of Preparation
Adoption of New and Revised Standards
The Group continues to monitor the potential impact of new
standards and interpretations which have been or may be endorsed
and require adoption by the Group in future reporting periods.
Amendment to IFRS 16 'Leases' COVID-19 Related Rent
Concessions
This amendment to IFRS16 provided an accounting policy choice
for lessees where a COVID-19 related rent concession had been
received or granted from a landlord. The Group has elected not to
account for COVID-19 related rent concessions under the amendment
effective from 1 June 2020. The Group instead continues to
remeasure right of use assets and lease liabilities following the
lease modification definitions within IFRS16 as originally issued,
recalculating using a revised discount rate where applicable.
A number of new standards were also effective from 2 February
2020 but they do not have a material effect on the Group's
financial statements. The Group does not consider that any other
standards, amendments or interpretations issued by the IASB, but
not yet applicable, will have a significant impact on the financial
statements.
Alternative performance measures
The Directors measure the performance of the Group based on a
range of financial measures, including measures not recognised by
international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union.
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 underlying performance of the Group.
Alternative performance measures are also used to enhance the
comparability of information between reporting periods, by
adjusting for exceptional items, which could distort the
understanding of the performance for the year. Further information
can be found at the end of these results.
Use of estimates and judgements
The preparation of financial statements in conformity with
adopted IFRSs requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates disclosed below are those which have a significant
risk of causing a material adjustment to the carrying amount of
assets and liabilities.
Footasylum Acquisition
The Competition and Markets Authority ('CMA') announced in its
Final Report in May 2020 that it had decided to prohibit the merger
with Footasylum and that, consequently, it required the Group to
fully divest its investment. This decision was subsequently quashed
on appeal in November 2020 by the Competition Appeal Tribunal
('CAT') who determined that the case should be passed back to the
CMA for full reconsideration. Subsequently, the CMA have asked both
the CAT and the Court of Appeal for leave to appeal the CAT's
decision but, on each occasion, this has been refused. Accordingly,
the merger with Footasylum will now be re-examined by the CMA, a
process expected to take several months.
The continuation of the temporary store closures into the new
financial year together with the reduction in the support available
for local authority rates have inevitably had a negative impact on
the expectations for the performance of Footasylum in the year to
29 January 2022. Further, there is inevitably considerable
uncertainty as to whether levels of footfall into the Footasylum
stores, which attract an older demographic than JD, will recover to
historic levels which could adversely impact the longer-term
viability of certain stores. As a consequence, the financial
projections no longer support the carrying value of the fascia name
and goodwill which arose on the acquisition in the year to 1
February 2020 with a charge of GBP55.6 million recognised in
relation to the impairment of these assets.
Determination of the Fair Value of Assets and Liabilities on
Acquisition
Included within critical accounting policies in the current year
is the valuation of the intangible assets recognised as part of the
acquisition of Shoe Palace. The estimates used in the valuation of
the intangible assets are considered to have a significant risk of
causing a material misstatement, specifically; the estimation of
future cash flows, the useful economic life of the asset, the
selection of suitable royalty relief rates and the selection of a
suitable discount rate.
The key assumption used by management in the valuation of the
fascia name was the royalty rate. The royalty rate assumption used
in the valuation was estimated based on published comparable
licence fees in the sports fashion market and a calculation of the
expected return on assets of the Shoe Palace business. If the
royalty rate used in the valuation was 1% higher or lower, this
would lead to a change in the fascia name valuation of plus or
minus GBP25.1 million. 1% was determined to be a reasonable royalty
rate sensitivity by comparing the royalty rate used to publicly
disclosed licensing transactions related to the retail of
sportswear and footwear.
Impairment of Goodwill
Goodwill arising on acquisition is allocated to groups of
cash-generating units that are expected to benefit from the
synergies of the business combination from which goodwill arose.
Goodwill is allocated to groups of cash-generating units, being
portfolios of stores or individual businesses. The cash-generating
units used to monitor goodwill and test it for impairment are
therefore the store portfolios and individual businesses rather
than individual stores, as the cash flows of individual stores are
not considered to be independent. The recoverable amounts of these
cash-generating units are 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 cash-generating unit and the choice of a suitable discount
rate in order to calculate the present value.
Impairment of Other Intangible Assets with Definite Lives
The Group is required to assess whether there is an indication
that other intangible assets with a definite useful economic life
have suffered any impairment. The recoverable amount of brand names
is based on an estimation of future sales and the choice of a
suitable royalty and discount rate in order to calculate the
present value, when this method is deemed the most appropriate. The
use of this method requires the estimation of future cash flows
expected to arise from the continuing operation of the asset until
the licence expiry date and the choice of a suitable discount rate
in order to calculate the present value. Impairment losses are
recognised in the Consolidated Income Statement.
Provisions to Write Inventories Down to Net Realisable Value
The Group makes provisions for obsolescence, mark downs and
shrinkage based on historical experience, the quality of the
current season buy, market trends and management estimates of
future events. The provision requires estimates for shrinkage, the
expected future selling price of items and identification of aged
and obsolete items.
Valuation of Rolling Leases
In initially applying IFRS16 Leases, the Group has applied
judgement to determine the lease term for certain lease contracts
in which the Group is a lessee that either have no specified end
date, or where the Group continues to occupy the property despite
the contractual lease end date having passed. In determining the
lease term, the Group takes into consideration its commercial
strategy on a store by store basis and the future intentions of the
Group regarding the duration of continuing occupation of the
property. For lease contracts falling into these parameters, the
associated lease liability is calculated at the present value of
the minimum lease payments over the estimated lease term,
discounted at the Group's incremental cost of borrowing. A
corresponding right of use asset is also recognised.
Iberian Sports Retail Group Put Option
The Group holds Put Options over part of the remaining
Non-Controlling Interest in Iberian Sport Retail Group and these
options are required to be fair valued at each accounting period
date. A valuation has been performed by management using an EBITDA
multiple, a suitable discount rate and approved forecasts. The
valuation is considerably higher than the previous year which is
primarily due to an improved forecast trading performance.
Sensitivity was performed over the key variable inputs to the
valuation of the put option, being the discount rate and the
approved forecasts. A discount rate increase of 1% would result in
a reduction in the put option liability of GBP0.9 million and an
increase of 1% to the forecasted EBITDA % would result in an
increase in the put option liability of GBP0.6 million. 1% was
determined to be a reasonable variance to demonstrate the
sensitivity of the put option valuation to the key inputs used.
Other Accounting Estimates
Genesis Topco Put-Options
Following the acquisition of Shoe Palace, the Group now holds
Put Options over 20% of the Non-Controlling Interest in the Genesis
Topco sub-group. A valuation has been performed using an EBITDA
multiple, a suitable discount rate and approved forecasts and the
initial liability of GBP261.6 million has been recognised with the
corresponding entry to Other Equity in accordance with the present
access method of accounting. These options are required to be fair
valued at each accounting period date. Given the proximity of the
transaction to the reporting date, the estimation uncertainty as at
the current reporting date is limited, however in future periods
this estimation uncertainty will be significant. Sensitivity was
performed over the key variable inputs to the valuation of the put
options, being the discount rate and the approved forecasts. A
discount rate increase of 1% would result in a reduction in the put
option liability of GBP13.9 million and an increase of 1% to the
forecasted EBITDA % would result in an increase in the put option
liability of GBP14.7 million. 1% was determined to be a reasonable
variance to demonstrate the sensitivity of the put option valuation
to the key inputs used.
Going Concern
The global COVID-19 pandemic has presented a series of
unprecedented challenges which have severely tested all aspects of
our business including our multi-channel capabilities, the
robustness of our operational infrastructure and the resilience of
our colleagues. Whilst COVID-19 has inevitably constrained our
short term progress, we firmly believe that we have a robust
premium branded multichannel proposition with our loyal consumers
comfortable engaging with us in any channel.
The financial statements are prepared on a going concern basis,
which the Directors believe to be appropriate for the following
reasons.
At 30 January 2021, the Group had net cash balances of GBP795.4
million (2020: GBP429.9 million) with available committed UK
borrowing facilities of GBP700 million (2020: GBP700 million) of
which GBPnil (2020: GBP nil) has been drawn down and US facilities
of approximately $300 million of which $nil was drawn down (2020:
$nil). These facilities are subject to certain covenants. With a UK
facility of GBP700 million available up to 6 November 2024 and a US
facility of approximately $300 million available up until 18 June
2023, the Directors believe that the Group is well placed to manage
its business risks successfully despite the current uncertain
economic outlook.
Since the year end, the Company completed the placing of new
ordinary shares in the capital of the Company raising gross
proceeds of approximately GBP456.0 million after costs. In
addition, the Group has completed acquisitions in the new year to
date with aggregate cash consideration paid of approximately GBP380
million. The Group had net cash of GBP709.5 million as at 6 April
2021.
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 financial statements, which indicate that the Group will be
able to operate within the level of its agreed facilities and
covenant compliance. These forecasts include a number of
assumptions including gross profit margins and the response of
customers to transition from physical sales to online and vice
versa as lockdown restrictions ease. For the purposes of both
Viability and 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 the continued COVID-19 pandemic.
These scenarios included more prolonged store closures, transition
from physical sales to online and disruptions to supply chain
causing delays in receiving stock. As part of this analysis,
mitigating actions within the Group's control should these severe
but plausible scenarios occur have also been considered. These
forecast cash flows 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,
including the inherent uncertainty in forecasting the impact of the
COVID-19 pandemic, 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.
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 Executive Chairman of JD Sports Fashion Plc.
Information reported to the Chief Operating Decision Maker is
focussed on the nature of the businesses within the Group. The
Group's operating and reportable segments under IFRS 8 are
therefore Sports Fashion and Outdoor.
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
core 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 products and 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. Disclosure of
revenue from major product groups is not provided at this time due
to the cost involved to develop a reliable product split on a same
category basis across all companies in the Group.
Intersegment transactions are undertaken in the ordinary course
of business on arm's length terms.
The Board consider that certain items are cross divisional in
nature and cannot be allocated between the segments on a meaningful
basis. Net funding costs and taxation are treated as unallocated
reflecting the nature of the Group's syndicated borrowing
facilities and its tax group. A deferred tax asset of GBP40.6
million and a deferred tax liability of GBP55.0 million (2020: net
liability of GBP12.5 million) and an income tax liability of
GBP29.5 million (2020: GBP34.3 million) are included within the
unallocated segment.
Each segment is shown net of intercompany transactions and
balances within that segment. The eliminations remove intercompany
transactions and balances between different segments which
primarily relate to the net down of long term loans and short term
working capital funding provided by JD Sports Fashion Plc (within
Sports Fashion) to other companies in the Group, and intercompany
trading between companies in different segments .
Business segments
Information regarding the Group's reportable operating segments
for the 52 weeks to 30 January 2021 is shown below:
Income statement
Sports
Fashion Outdoor Unallocated Total
GBPm GBPm GBPm GBPm
Gross revenue 5,808.2 359.1 - 6,167.3
Intersegment revenue (0.2) 0.2 - -
--------- ---------- -------------- --------
Revenue 5,808.0 359.3 - 6,167.3
--------- ---------- -------------- --------
Gross profit % 48.4% 42.2% - 48.0%
Operating profit / (loss)
before exceptional items 484.7 (2.4) - 482.3
Exceptional items (76.9) (20.4) - (97.3)
--------- ---------- -------------- --------
Operating profit / (loss) 407.8 (22.8) - 385.0
Financial income - - 1.5 1.5
Financial expenses (51.2) (3.7) (7.6) (62.5)
--------- ---------- -------------- --------
Profit / (loss) before
tax 356.6 (26.5) (6.1) 324.0
Income tax expense (94.8)
--------- ---------- -------------- --------
Profit for the period 229.2
--------- ---------- -------------- --------
Total assets and liabilities
Sports Fashion Outdoor Unallocated Eliminations Total
GBPm GBPm GBPm GBPm GBPm
Total assets 4,940.2 293.2 40.6 (112.1) 5,161.9
Total liabilities (3,420.3) (272.8) (84.5) 112.1 (3,665.5)
--------------- -------- ------------ ------------- ------------
Total segment net
assets / (liabilities) 1,519.9 20.4 (43.9) - 1,496.4
--------------- -------- ------------ ------------- ------------
Other segment information
Sports Fashion Outdoor Total
GBPm GBPm GBPm
Capital expenditure:
Software development 19.1 - 19.1
Property, plant and equipment 102.1 3.1 105.2
Right of use assets 168.3 46.6 214.9
Non-current other assets 7.7 - 7.7
--------------- -------- ------
Depreciation, amortisation and impairments:
Depreciation and amortisation of non-current
assets 161.8 16.0 177.8
Depreciation and amortisation of right
of use assets 301.5 19.9 321.4
Impairment of intangible assets (exceptional
items) 56.2 33.3 89.5
Impairment of non-current assets (exceptional
items) - 4.9 4.9
Impairment of non-current assets (non-exceptional
items) 4.9 0.4 5.3
Impairment of right of use assets
(non-exceptional items) 2.4 1.0 3.4
--------------- -------- ------
The comparative segmental results for the 52 weeks to 1 February
2020 are as follows:
Income statement
Sports
Fashion Outdoor Unallocated Total
GBPm GBPm GBPm GBPm
Gross revenue 5,696.8 414.0 - 6,110.8
Intersegment revenue - - - -
--------- --------------- -------------- --------
Revenue 5,696.8 414.0 - 6,110.8
--------- --------------- -------------- --------
Gross profit % 47.4% 41.9% - 47.0%
Operating profit / (loss)
before exceptional items 533.2 (16.3) - 516.9
Exceptional items (40.6) (49.7) - (90.3)
--------- --------------- -------------- --------
Operating profit / (loss) 492.6 (66.0) - 426.6
Financial income - - 1.7 1.7
Financial expenses (64.7) (7.2) (7.9) (79.8)
--------- --------------- -------------- --------
Profit / (loss) before
tax 427.9 (73.2) (6.2) 348.5
Income tax expense (97.8)
--------- --------------- -------------- --------
Profit for the period 250.7
--------- --------------- -------------- --------
Total assets and liabilities
Sports Fashion Outdoor Unallocated Eliminations Total
GBPm GBPm GBPm GBPm GBPm
Total assets 4,047.7 411.7 - (113.5) 4,345.9
Total liabilities (2,723.5) (393.9) (52.8) 113.5 (3,056.7)
--------------- ---------- ------------ ------------- --------------
Total segment net
assets / (liabilities) 1,324.2 17.8 (52.8) - 1,289.2
--------------- ---------- ------------ ------------- --------------
Other segment information
Sports Fashion Outdoor Total
GBPm GBPm GBPm
Capital expenditure:
Software development 23.2 - 23.2
Property, plant and equipment 138.4 8.8 147.2
Right of use assets 408.5 9.6 418.1
Non-current other assets 6.8 - 6.8
--------------- -------- ------
Depreciation, amortisation and impairments:
Depreciation and amortisation of
non-current assets 132.3 14.4 146.7
Depreciation and amortisation of
right of use assets 274.9 28.4 303.3
Impairment of intangible assets
(exceptional items) 0.6 42.5 43.1
Impairment of non-current assets
(non-exceptional items) 5.0 - 5.0
Impairment of right of use assets
(non-exceptional items) 7.0 0.8 7.8
--------------- -------- ------
Geographical Information
The Group's operations are located in the UK, Australia,
Austria, Belgium, Canada, Denmark, Dubai, Finland, France, Germany,
Hong Kong, India, Italy, Malaysia, the Netherlands, New Zealand,
Portugal, Republic of Ireland, Singapore, South Korea, Spain and
the Canary Islands, Sweden, Thailand and the United States of
America.
The following table provides analysis of the Group's revenue by
geographical market, irrespective of the origin of the goods /
services:
2021 2020
GBPm GBPm
UK 2,527.0 2,599.2
Europe 1,579.4 1,619.2
United States 1,780.5 1,611.0
Rest of world 280.4 281.4
-------- --------
6,167.3 6,110.8
-------- --------
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 is an analysis of the carrying amount of segmental
non-current assets by the geographical area in which the assets are
located:
2021 2020
GBPm GBPm
UK 1,011.0 1,296.2
Europe 1,003.4 979.2
United States 1,078.6 497.4
Rest of world 109.0 111.5
Unallocated 40.6 -
3,242.6 2,884.3
-------- --------
Taxation is treated as unallocated reflecting the nature of the
Group's tax group.
3. Exceptional items
52 weeks to 52 weeks to
30 January 1 February
2021 2020
GBPm GBPm
Impairment of goodwill and fascia names
(1) 56.2 43.1
Movement in fair value of put and call
options (2) 20.7 31.4
Restructuring of Go Outdoors (3) 20.4 -
Integration of Outdoor systems and warehousing
(4) - 7.2
Integration of Sport Zone into Sprinter
infrastructure (5) - 8.6
------------ ------------
Administrative expenses - exceptional 97.3 90.3
Total exceptional items 97.3 90.3
------------ ------------
(1) The impairment in the current period principally constitutes
a charge of GBP55.6 million relating to the impairment of the
goodwill and fascia name arising in prior years on the acquisition
of Footasylum. The impairment in the prior period relates to the
impairment of the goodwill arising in prior years on the
acquisition of Go Outdoors Topco Limited and Choice Limited.
(2) Movement in the fair value of the liabilities in respect of
the put and call options.
(3) The net impact consequent to the restructuring of Go
Outdoors in the period including a charge of GBP33.3 million in
relation to the impairment of intangible assets, a charge of GBP4.9
million in relation to the impairment of leasehold improvements and
a credit of GBP17.8 million in relation to the extinguishment of
lease commitments.
(4) Costs arising from the integration and consolidation of the
principal IT systems, warehousing and other infrastructure in Go
Outdoors.
(5) Costs associated with transferring the stocks and other
operations of Sport Zone into the Sprinter infrastructure.
Items (1) and (2) are exceptional items as they are considered
unusual in nature and not reflective of the underlying trading and
profitability of the Group. Items (3), (4) and (5) are presented as
an exceptional item as these costs relate to one off projects.
4. Earnings per ordinary share
Basic and diluted earnings per ordinary share
The calculation of basic and diluted earnings per ordinary share
at 30 January 2021 is based on the profit for the period
attributable to equity holders of the parent of GBP224.3 million
(2020: GBP246.1 million) and a weighted average number of ordinary
shares outstanding during the 52 week period ended 30 January 2021
of 973,233,160 (2020: 973,233,160).
52 weeks to 52 weeks
30 January to
2021 1 February
2020
Issued ordinary shares at beginning and
end of period 973,233,160 973,233,160
------------ ----------------
Adjusted basic and diluted earnings per ordinary share
Adjusted basic and diluted earnings per ordinary share have been
based on the profit for the period attributable to equity holders
of the parent for each financial period but excluding the post-tax
effect of certain exceptional items. The Directors consider that
this gives a more useful measure of the underlying performance of
the Group.
52 weeks 52 weeks
to to
30 January 1 February
Note 2021 2020
GBPm GBPm
Profit for the period attributable to
equity holders of the parent 224.3 246.1
Exceptional items excluding loss on disposal
of non-current assets 3 97.3 90.3
Tax relating to exceptional items (8.3) (3.0)
Profit for the period attributable to
equity holders of the parent excluding
exceptional items 313.3 333.4
------------ ----------------
Basic and diluted earnings per ordinary
share 23.05p 25.29p
------------ ----------------
Adjusted basic and diluted earnings per
ordinary share 32.19p 34.26p
------- -------
5. Acquisitions
Current period acquisitions
Onepointfive Ventures Limited trading as Livestock
('Livestock')
On 10 February 2020, the Group acquired 100% of the issued share
capital of Onepointfive Ventures Limited DBA Livestock
('Livestock') through a newly established Canadian holding company
(JDSF Holdings (Canada) Inc.) ('Holdco'). Based in Vancouver, this
business and its management will provide the platform to develop JD
Group fascias in Canada.
Consideration was comprised of GBP7.0 million in cash, of which
GBP0.6m is deferred, plus 20% of the equity in Holdco. The fair
value of the 20% equity in Holdco was GBP1.8 million.
Included within the fair value of the net identifiable assets on
acquisition is an intangible asset of GBP1.2 million, representing
the 'Livestock' fascia name. The Board believes that the excess of
consideration paid over net assets on acquisition of GBP8.4 million
is best considered as goodwill on acquisition representing future
operating synergies. The goodwill calculation is summarised
below:
Measurement Fair value
Book value adjustments at
GBPm GBPm 10 February
2020
GBPm
Acquiree's net assets at acquisition
date:
Intangible assets - 1.2 1.2
Property, plant & equipment 0.5 - 0.5
Right of use assets 0.5 - 0.5
Inventories 0.5 - 0.5
Cash and cash equivalents (0.8) - (0.8)
Trade and other receivables 0.1 - 0.1
Trade and other payables (0.5) - (0.5)
Deferred tax liability - (0.3) (0.3)
Lease liabilities (0.5) - (0.5)
Corporation tax (0.3) - (0.3)
Net identifiable (liabilities) /
assets (0.5) 0.9 0.4
------------- -------------- --------------
Goodwill on acquisition 8.4
------------- -------------- --------------
Consideration - satisfied in cash 6.4
Consideration - fair value of shares 1.8
issued
Consideration - deferred 0.6
------------- -------------- --------------
Total consideration 8.8
------------- -------------- --------------
Included in the 52 week period ended 30 January 2021 is revenue
of GBP10.1 million and a profit before tax of GBP1.4 million in
respect of Livestock.
X4L Gyms Limited
On 22 July 2020, X4L Gyms Limited, a 100% owned subsidiary of JD
Gyms Limited acquired certain assets of Wright Leisure Limited t/a
Xercise4less following the Group being placed into administration
on the same date.
Xercise4less is a UK-based value-gym chain with 50 operational
clubs at the date of administration. The company offers
high-quality, low-cost contract and non-contract memberships to its
members from large operational facilities nationwide.
The Board believes that Xercise4Less further strengthens the
Group's presence in the growing UK fitness market with the
acquisition providing immediate reach to a wider membership base as
well as facilitating the Group's presence as a key player in the
market. Xercise4less is a well-established business with a wealth
of knowledge in the UK fitness market which the board believes will
be complementary to JD. The Board also believes that there will be
significant operational and strategic benefits from a combination
of the two businesses.
The Board believes the excess of cash consideration paid over
the net identifiable assets on acquisition of GBP14.2 million is
best considered as goodwill representing future operating
synergies.
The goodwill calculation is summarised
below:
Measurement Fair value
Book value adjustments at
GBPm GBPm 22 July 2020
GBPm
Acquiree's net assets at acquisition
date:
Intangible assets 16.3 (16.1) 0.2
Property, plant & equipment 7.8 4.4 12.2
Trade and other receivables 0.1 (0.1) -
Trade and other payables - (1.5) (1.5)
Deferred tax liability - (0.9) (0.9)
Net identifiable assets 24.2 (14.2) 10.0
------------- -------------- ---------------
Goodwill on acquisition 14.2
------------- -------------- ---------------
Consideration paid - satisfied in
cash 24.2
------------- -------------- ---------------
Included in the 52 week period ended 30 January 2021 is revenue
of GBP8.1 million and a loss before tax of GBP3.3 million in
respect of X4L Gyms Limited.
Shoe Palace Corporation and Nice Kicks LLC
On 14 December 2020, JD Sports Fashion Plc's wholly owned
intermediate holding company in the United States, Genesis
Holdings, acquired 100% of the issued shares in both the Shoe
Palace Corporation and the members' interests in Nice Kicks LLC
(together 'Shoe Palace').
Shoe Palace has an established retail presence in California,
Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii
with 163 stores trading under the Shoe Palace fascia and four
stores trading as Nice Kicks.
Total consideration for the acquisition was $672.9 million,
comprising $316.7 million of cash consideration (of which $100
million has been deferred and will be paid on various dates through
2021) and $356.2 million, being the initial fair value of this
equity in the enlarged group in the United States calculated using
an EBITDA multiple and approved forecasts. Additionally, several
put and call options, to enable future exit opportunities for the
minority interest have also been agreed, which commence after the
end of the financial year to 1 February 2025. A valuation of these
put options has been performed using an EBITDA multiple, a suitable
discount rate and approved forecasts and the initial liability of
GBP261.6 million has been recognised with the corresponding entry
to Other Equity in accordance with the present access method of
accounting. These options are required to be fair valued at each
accounting period date.
Included within the provisional fair value of the net
identifiable assets on acquisition is an intangible asset of
GBP105.6 million, representing the 'Shoe Palace' fascia name and an
intangible asset of GBP1.2 million, representing the 'Nice Kicks'
fascia name. The Board believes that the excess of consideration
paid over net assets on acquisition of GBP408.2 million is best
considered as goodwill on acquisition representing future operating
synergies. Due to the proximity of the date of the acquisition and
the financial period end, it has not been possible to present a
final goodwill calculation or the final fair values of the assets
and liabilities acquired. The provisional goodwill calculation is
summarised below:
Provisional
Measurement fair value
Book value adjustments at
GBPm GBPm 14 December
2020
GBPm
Acquiree's net assets at acquisition
date:
Intangible assets 0.2 106.8 107.0
Property, plant & equipment 22.7 2.9 25.6
Right of use assets 139.8 - 139.8
Other non-current assets 0.6 - 0.6
Inventories 49.7 5.0 54.7
Cash and cash equivalents 3.1 - 3.1
Bank loans and overdrafts (1.7) - (1.7)
Trade and other receivables 10.6 - 10.6
Trade and other payables - current (64.2) 6.4 (57.8)
Trade and other payables - non-current (9.5) 9.5 -
Deferred tax liability - (32.7) (32.7)
Lease liabilities (139.8) - (139.8)
Net identifiable assets 11.5 97.9 109.4
------------- -------------- --------------
Goodwill on acquisition 408.2
------------- -------------- --------------
Consideration - satisfied in cash 170.4
Consideration - fair value of shares 274.1
issued
Consideration - deferred 73.1
------------- -------------- --------------
Total consideration 517.6
------------- -------------- --------------
Included in the 52 week period ended 30 January 2021 is revenue
of GBP56.1 million and a profit before tax of GBP13.9 million in
respect of Shoe Palace.
A Number of Names Limited
On 23 December 2020, the Group acquired 100% of the issued share
capital of A Number of Names Limited ('ANON'). ANON is primarily a
wholesale business with the licence to the Billionaire Boys Club
('BBC') brand in the UK, Europe, Middle East, Africa, Russia,
Ukraine, Australia, Canada and certain other territories.
Due to the proximity of the date of the acquisition and the
financial period end, it has not been possible to finalise the
goodwill calculation or the fair values of the assets and
liabilities acquired. The total provisional fair value of
consideration recognised at 23 December 2020 was GBP4.8 million
comprising GBP3.3 million of cash consideration and GBP1.5 million
of deferred consideration that is contingent on ANON meeting
certain performance criteria. GBP1.5 million was deemed to be the
provisional fair value of the deferred consideration based on
management's judgement and best estimates as at 23 December
2020.
The Board believes the provisional excess of consideration over
the net assets acquired of GBP1.9 million is best considered as
goodwill on acquisition representing future operating
synergies.
Included in the 52 week period ended 30 January 2021 is revenue
of GBP0.2 million and a break even result before tax in respect of
A Number of Names Limited.
Other acquisitions
During the period, the Group made several small acquisitions.
These transactions were not material.
Full year impact of acquisitions
Had the acquisitions of the entities listed above been effected
at 2 February 2020, the revenue and profit before tax of the Group
for the 52 week period to 30 January 2021 would have been GBP6.5
billion and GBP334.9 million respectively.
Acquisition costs
Acquisition related costs amounting to GBP4.0 million have been
excluded from the consideration transferred and have been
recognised as an expense in the year, within administrative
expenses in the Consolidated Income Statement.
Prior period acquisitions
Footasylum Plc ('Footasylum')
On 18 February 2019, JD Sports Fashion Plc acquired 19,579,964
Footasylum Plc shares at prices between 50 pence and 75 pence per
share, representing 18.7% of the issued ordinary share capital. On
18 March 2019, in conjunction with the board of Footasylum Plc, JD
Sports Fashion Plc announced the terms of an offer to be made for
the remaining 81.3% of the ordinary share capital of Footasylum at
a price of 82.5 pence per ordinary share. This offer was declared
unconditional in all respects on 12 April 2019 with acceptances
received for a total of 78,176,481 shares representing a further
74.8% of the issued ordinary share capital. On 26 April 2019, the
first bulk transfer was made to acquire an additional 80.5 million
shares (in addition to the 19.5 million already owned). The formal
process to acquire the remaining Footasylum shares (incl. the
dissenting shareholders) was completed on 4 June 2019. Footasylum
was delisted on 16 May 2019 and converted from an unlisted Plc to a
private company on 19 September 2019.
Footasylum is a UK-based fashion retailer founded in 2005
focusing on the footwear and apparel market. The company operates a
multichannel model which combined a store estate of 69 stores on
acquisition in a variety of high street, mall and retail park
locations in cities and towns throughout Great Britain,
complemented by an online platform and a wholesale arm for
distributing its own brand ranges via a network of partners.
The Board believes that Footasylum is a well-established
business with a strong reputation for lifestyle fashion and, with
its offering targeted at a slightly older consumer to JD's existing
offering, it is complementary to JD. The Board also believes that
there will be significant operational and strategic benefits from a
combination of the two businesses.
Included within the fair value of the net identifiable assets on
acquisition was an intangible asset of GBP34.3 million representing
the Footasylum fascia name and an intangible asset of GBP3.0
million for Footasylum exclusive brands. No measurement adjustments
have been made to the fair value during the 52 week period ended 30
January 2021 and the period in which measurement adjustments could
be made has now closed on this acquisition. The Board believed the
excess of cash consideration paid over the net identifiable assets
on acquisition of GBP27.3 million was best considered as goodwill
representing future operating synergies. The carrying value of the
goodwill and fascia name has been impaired in full in the financial
year ended 30 January 2021 (See Note 1 for further details).
Measurement Fair value
Book value adjustments as at
GBPm GBPm 12 April 2019
GBPm
Acquiree's net assets at acquisition
date:
Intangible assets - 37.3 37.3
Property, plant & equipment 29.1 (3.5) 25.6
Right of use assets 100.4 - 100.4
Inventories 39.6 - 39.6
Cash and cash equivalents 5.7 - 5.7
Trade and other receivables 19.4 - 19.4
Deferred tax asset / (liability) 0.2 (6.3) (6.1)
Trade and other payables - current (42.0) - (42.0)
Trade and other payables - non-current (0.2) - (0.2)
Lease liabilities (107.5) - (107.5)
Interest bearing loans and borrowings (13.5) - (13.5)
Net identifiable assets 31.2 27.5 58.7
------------- -------------- ----------------
Goodwill on acquisition 27.3
------------- -------------- ----------------
Consideration paid - satisfied in
cash 86.0
------------- -------------- ----------------
Given that this transaction is being reviewed by the Competition
and Markets Authority ('CMA'), the Directors of the Company have
had to assess whether or not the Group had control over Footasylum.
In making their judgement, the Board considered the Group's ability
to direct the relevant activities of Footasylum during the
investigation period. Ultimately, after careful consideration, the
Board concluded that the Group had control and, accordingly,
Footasylum should be consolidated from the date of acquisition.
Included within the 52 week period ended 1 February 2020 is
revenue of GBP215.9 million and a profit before tax of GBP1.7
million in respect of Footasylum.
Rascal Clothing Limited
On 5 February 2019, the Group acquired 50% of the issued share
capital of Rascal Clothing Limited ('Rascal') for cash
consideration of GBP2.5 million with additional consideration of up
to GBP1.0 million payable if certain performance criteria were
achieved. Rascal is a wholesaler and online retailer of sports
inspired leisurewear. At acquisition, management believed that
Rascal was on course to meet the performance criteria for the
maximum contingent consideration to be payable and therefore the
fair value of the contingent consideration at this time was GBP1.0
million.
The Group has the ability to direct the relevant activities of
Rascal Clothing and there are restrictions on the existing
shareholders via a shareholder agreement. Accordingly, the Board
have concluded that the Group has control and that Rascal Clothing
should be consolidated from the date of acquisition.
The Board believes that the excess of consideration paid over
the net assets on acquisition of GBP2.2 million is best considered
as goodwill on acquisition representing future operating synergies.
No measurement adjustments have been made to the fair value during
the 52 week period ended 30 January 2021 and the period in which
measurement adjustments could be made has now closed on this
acquisition.
Included within the 52 week period ended 1 February 2020 is
revenue of GBP4.4 million and a profit before tax of GBP0.6 million
in respect of Rascal Clothing Limited.
PG2019 Limited ('Pretty Green')
On 4 April 2019, the Group acquired, via its 100% subsidiary
PG2019 Limited, the trading assets and trade of Pretty Green
Limited (in administration), the boutique men's clothing brand,
from its administrator. The acquisition included the business,
brand, website and wholesale business as well as a flagship store
in Manchester. Cash consideration of GBP1.5 million was paid on
completion with the Group also assuming a further GBP1.8 million of
debt.
Included within the fair value of the net identifiable assets on
acquisition is an intangible asset of GBP1.0 million representing
the Pretty Green fascia name and an intangible asset of GBP0.7
million representing the Pretty Green brand name. The Board
believes the excess of cash consideration paid over the net
identifiable assets on acquisition of GBP2.7 million is best
considered as goodwill representing future operating synergies. No
measurement adjustments have been made to the fair value during the
52 week period ended 30 January 2021 and the period in which
measurement adjustments could be made has now closed on this
acquisition.
Included within the 52 week period ended 1 February 2020 is
revenue of GBP13.5 million and a profit before tax of GBP1.7
million in respect of PG2019 Limited.
Giulio Fashion Limited
On 30 April 2019, the Group acquired 80% of the issued share
capital of Giulio Fashion Limited including two wholly owned
subsidiaries, Giulio Limited (a trading company) and Giulio Woman
Limited (a dormant company) for cash consideration of GBP3.0
million. The acquisition included put and call options over the
remaining stores exercisable after three years.
The Board believes the excess of cash consideration paid over
the net identifiable assets on acquisition of GBP2.7 million is
best considered as goodwill representing future operating
synergies. No measurement adjustments have been made to the fair
value during the 52 week period ended 30 January 2021 and the
period in which measurement adjustments could be made has now
closed on this acquisition.
Included within the 52 week period ended 1 February 2020 is
revenue of GBP5.6 million and a profit before tax of GBP0.2 million
in respect of Giulio Fashion Limited.
Other acquisitions
During the prior period, the Group made several small
acquisitions. These transactions were not material.
Full year impact of acquisitions
Had the acquisitions of the entities listed above been effected
at 3 February 2019, the revenue and profit before tax of the Group
for the 52 week period to 1 February 2020 would have been GBP6.2
billion and GBP349.2 million respectively.
Acquisition costs
Acquisition related costs amounting to GBP7.4 million
(Footasylum Plc, GBP7.3 million, other acquisitions GBP0.1 million)
have been excluded from the consideration transferred and have been
recognised as an expense in the year, within administrative
expenses in the Consolidated Income Statement.
6. Subsequent Events
DTLR Villa LLC ('DTLR')
On 31 January 2021, JD Sports Fashion Plc entered into a
conditional agreement for the acquisition of 100% of DTLR Villa LLC
('DTLR' or 'Company'). Completion of the acquisition was subject to
customary closing conditions, including expiration or termination
of the applicable waiting period under the U.S. Hart-Scott-Rodino
Antitrust Improvements Act (HSR Act). The acquisition subsequently
completed on 17 March 2021.
Total cash consideration for the acquisition was $495 million,
subject to customary working capital and other adjustments at
completion, of which approximately $100 million will be used to
repay existing indebtedness of the Company. This cash consideration
is being funded from the Group's cash resources and existing bank
facilities. The DTLR Management Team ('Management'), headed up by
Glenn Gaynor and Scott Collins, who will be continuing in their
roles as Co-CEOs, have also reinvested a portion of their proceeds
back into DTLR in exchange for a new minority stake of
approximately 1.4%. Put and call options, to enable future exit
opportunities for Management, have also been agreed and become
exercisable after a minimum period of three years.
DTLR is based in Baltimore, Maryland and is a hyperlocal
athletic footwear and apparel streetwear retailer. Originally named
Downtown Locker Room, the Company later re-branded as DTLR and, in
2017, merged with Sneaker Villa Inc (previously based in
Philadelphia). At acquisition, DTLR operated from 247 stores across
19 states, principally in the North and East of the United States.
The acquisition of DTLR, with its differentiated consumer
proposition, will enhance the Group's presence in the north and
east of the United States complementing not only our existing JD
and Finish Line fascias but also the recent acquisition of Shoe
Palace which is based on the West Coast.
Due to the proximity of the date of the acquisition and the date
of this announcement, it is not possible to present a provisional
goodwill calculation, or the provisional fair values of the assets
and liabilities acquired. The goodwill calculation and fair value
table will be presented in the announcement of our Interim Results
on the 14 September 2021.
Placing of New Ordinary Shares
On 3 February 2021, JD Sports Fashion Plc ('the Company')
completed the placing of new ordinary shares in the capital of the
Company. A total of 58,393,989 new ordinary shares in the capital
of the Company were placed by Investec Bank plc and Peel Hunt LLP
at an issue price of 795 pence per share (the 'Placing Price').
The Placing Shares represent approximately 6.0 per cent of the
existing issued share capital of the Company and raised gross
proceeds of approximately GBP456.0 million after costs. The Placing
Price represents a discount of approximately 2.5 per cent to the
mid-market closing price of 815 pence on 3 February 2021. The
Placing was implemented on a non-pre-emptive basis.
The admission of the Placing Shares to trading on the main
market for listed securities took place on the 8 February 2021. The
Placing Shares rank pari passu in all respects with each other and
with the existing issued Ordinary Shares. This includes, without
limitations, the right to receive all dividends and other
distributions declared or paid in respect of such Ordinary Shares
after the date of issue of the Placing Shares.
The Company now has a total of 1,031,627,149 Ordinary Shares in
issue. The Company does not hold any shares in treasury and the
total number of voting shares in issue is therefore
1,031,627,149.
Marketing Investment Group S.A. ('MIG')
On 11 March 2021, JD Sports Fashion Plc entered into a
conditional agreement for the acquisition of 60% of the share
capital of Marketing Investment Group S.A. The business operates
410 retail stores and associated trading websites across nine
countries in Central and Eastern Europe. In the year ended 31
January 2020, MIG generated revenues of approximately GBP200
million (GBPstg equivalent). The estimated date of completion of
the acquisition is May 2021 subject to customary closing conditions
and competition clearance.
The net assets of MIG at the date of completion are expected to
be approximately GBP15 million. Put and call options to enable
future exit opportunities for the 40% shareholders have also been
agreed and become exercisable after the year ended January
2025.
7. Accounts
The financial information set out above does not constitute the
Group's statutory accounts for the 52 weeks ended 30 January 2021
or 52 weeks ended 1 February 2020 but is derived from those
accounts. Statutory accounts for the 52 weeks ended 1 February 2020
have been delivered to the Registrar of Companies, and those for
the 52 weeks to 30 January 2021 will be delivered in due course.
The auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
Copies of full accounts will be sent to shareholders in due
course. Additional copies will be available from JD Sports Fashion
Plc, Hollinsbrook Way, Pilsworth, Bury, Lancashire, BL9 8RR or
online at www.jdplc.com
Alternative Performance Measures (terms 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 financial reporting standards ('IFRS') adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union. 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 underlying performance of the
Group.
Alternative Performance Measures are also used to enhance the
comparability of information between reporting periods, by
adjusting for exceptional items. Exceptional items are disclosed
separately as they are considered unusual in nature and not
reflective of the underlying trading and profitability of the
Group. The separate reporting of exceptional items, which are
presented as exceptional within the relevant category in the
Consolidated Income Statement, helps provide an indication of the
Group's underlying business performance.
Adjusted earnings per share
The calculation of basic earnings per share is detailed in Note
4. 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 exceptional items. A reconciliation between basic earnings
per share and adjusted earnings per share is shown below:
2021 2020
Basic earnings per share 23.05p 25.29p
Exceptional items excluding loss on disposal
of non-current assets 10.00p 9.27p
Tax relating to exceptional items (0.86)p (0.30)p
-------- --------
Adjusted earnings per ordinary share 32.19p 34.26p
-------- --------
Core
The Group's core Sports Fashion fascia is JD and the Group's
core market is the UK and Republic of Ireland.
EBITDA before exceptional items
Earnings before interest, tax, depreciation and
amortisation.
2021 2020
GBPm GBPm
Profit for the period 229.2 250.7
Addback:
Financial expenses 62.5 79.8
Income tax expense 94.8 97.8
Depreciation, amortisation and impairment
of non-current assets 507.9 462.9
Exceptional items 97.3 90.3
Deduct:
Financial income (1.5) (1.7)
------ ------
EBITDA before exceptional items 990.2 979.8
------ ------
LFL (Like for Like) sales
The percentage change in the year-on-year sales, removing the
impact of new store openings and closures in the current or
previous financial year .
Like for Like Sports Fashion businesses
The performance in the Sports Fashion segment excluding
acquisitions in the current financial year and the annualisation
period of businesses acquired in the previous financial year .
Net cash
Net cash consists of cash and cash equivalents together with
interest-bearing loans and borrowings.
Operating profit before exceptional items
A reconciliation between operating profit and exceptional items
can be found in the Consolidated Income Statement.
Profit before tax and exceptional items
A reconciliation between profit before tax and profit before tax
and exceptional items is as follows:
2021 2020
GBPm GBPm
Profit before tax 324.0 348.5
Exceptional items 97.3 90.3
------ ------
Profit before tax and exceptional items 421.3 438.8
------ ------
Proforma IAS 17
The Group presents results on a proforma basis with rents
recognised under the provisions of IAS 17 'Leases' as opposed to
IFRS 16 'Leases' so as to assist the user in the interpretation of
current performance when compared to previous years. Further,
certain management incentives are linked to the results on this
basis.
A reconciliation from the IFRS 16 headline profit before tax and
exceptional items to the proforma IAS 17 headline profit before tax
and exceptional items is as follows:
2021 2020
GBPm GBPm
Headline profit before tax and exceptional
items (IFRS 16) 421.3 438.8
Addback:
Depreciation and impairment of the Right of
Use asset under IFRS 16 324.8 311.1
Lease interest expense 54.9 71.9
Deduct:
Lease costs expensed to the income statement
under IAS 17 (340.9) (356.2)
-------- --------
Headline profit before tax and exceptional
items (Proforma IAS 17) 460.1 465.6
-------- --------
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