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JD Report Record Pre-Tax Profit For Full Year 2021

JD SPORTS FASHION PLC FINAL RESULTS FOR THE YEAR ENDED 29 JANUARY 2022

Financial Results Summary
Record result for the year with profit before tax and exceptional items of £947.2 million. This result includes £125.6 million of profit from the combination of acquisitions in the year and the annualisation period of businesses bought in the 52 weeks to 30 January 2021.

Strong performances from the Sports Fashion retail fascias in the UK and Republic of Ireland and North America in particular.

UK and Republic of Ireland: Profit before tax and exceptional items increased to £471.2 million (2021: £262.7 million; 2020: £288.5 million) with a strong retention of sales through digital channels in the first quarter whilst the stores were temporarily closed combined with strong demand after reopening

North America: Profit before tax and exceptional items increased to £343.0 million (2021: £171.9 million; 2020: £94.2 million) which includes contributions of £57.3 million (2021: £13.9 million in the six-week period after acquisition) from Shoe Palace and £50.6 million from DTLR (46-week period post acquisition).

All of the Group’s businesses successfully capitalised on the favourable trading conditions provided by a second round of fiscal stimulus from the US Federal Government. Outdoor returned to profitability with an elevated demand for holidays in the UK and a general recognition of the physical and mental health benefits of spending time outdoors with a profit before tax and exceptional items of £25.9 million (2021: loss of £6.1 million).

Net cash balance at the end of the period, being the peak of the cash cycle, of £1,185.9 million (2021: £795.4 million) reflects both the very strong cash generation in the UK and North America and the net proceeds, after costs, of £455.9 million from the placing of 58,393,989 new ordinary shares during the year.

Strategic and Operational Summary
Significant acquisitions in the period have further extended the Group’s geographical reach: DTLR enhances the Group’s exposure to key consumer demographics in the highly important East Coast market in the United States. Marketing Investment Group in Poland gives the Group a presence in Central and Eastern Europe for the first time. Cosmos in Greece and Cyprus gives the Group its first presence in the east of the Mediterranean which has been complemented in the current financial year by the commencement of a joint venture in Israel. International development of JD in other markets continues to gain momentum: 87 stores trading as JD in the United States at the end of the period with a further nine stores converted in the first four months of the new financial year. 32 net new JD stores opened across Europe including first stores in Eastern Europe in Poland and Romania. 10 net new JD stores in the Asia Pacific region

And the first JD stores in Indonesia and Israel opened in the current financial year.

A major program of work is being progressed to enhance the logistics network and fulfilment capabilities across the UK and Western Europe: Derby (UK): Construction works on the new 515,000 sq ft facility in Derby which will be used exclusively to fulfil online orders for JD in the UK are now complete, with initial fit out of the site ongoing. Limited fulfilment from the site is due to commence ahead of the peak period later this year with the site expected to be fully operational by mid-2023 Heerlen (the Netherlands): Construction of the 620,000 sq ft facility in Heerlen, South-East Netherlands which will fulfil product for both stores and online orders in Western Europe is underway. Initial fulfilment from this site is scheduled to commence in the second half of 2023 with the site expected to be fully operational by mid-2024.  Dublin (Republic of Ireland): 65,000 sq ft warehouse near Dublin now fully operational, supplying both product to stores and fulfilling online orders in the Republic of Ireland.

Helen Ashton, Interim Chair, commented:
“This was another period of outstanding progress with the Group delivering a record headline profit before tax and exceptional items of £947.2 million (2021: £421.3 million), more than double the previous record of £438.8 million set in the period to 1 February 2020, which was the last completed financial year prior to the COVID-19 pandemic.

“We are particularly encouraged by the strong performance from the Group’s banners in North America. It is increasingly evident that the Group’s progress in North America, and the United States in particular, is having a long-term positive impact both on the Group’s overall performance and its relationships with the international brands.

“The process to recruit a CEO is ongoing with a number of high calibre candidates at different stages of consideration including some who have only recently made their interest in the role known. A process to recruit a new Non-Executive Chair is also progressing at pace. Meanwhile, the Board is happy with how the interim arrangements are operating and will update the market on the progress of these search processes as appropriate.

“Whilst we are encouraged by the resilient nature of the consumer demand in the current year to date, we remain conscious of the headwinds that prevail at this time including the general global macro-economic and geopolitical situation. Against this backdrop, the Board believes that the headline profit before tax and exceptional items for the year end 28 January 2023 will be in line with the record performance for the year ended 29 January 2022.”