JD Sports owner John David Group reported a “disappointing” financial performance today after a major acquisition disrupted business.
Posting results for the 10 months to 31 January, the group said that integration of the First Sport chain, which it acquired from Blacks Leisure for £53.2m last year, was taking longer than expected.
The results come after the group warned in January that it had seen slower-than-expected trading over the key Christmas period.
While direct comparisons are difficult because of a change in its financial year, pre-tax profits fell from £20.1m in the year to 31 March to £10.8m in the 10-month period.
That was despite a 34% rise in turnover to £370.8m after the acquisition added 209 stores to the 166 existing JD Sports branches.
Sales in the JD Sports chain rose by 10% over the period, driven by the opening of 21 new stores, but like-for-like sales declined by 0.5% over the 10-month period after an increase of 0.6% in the first six months.
The group said the process of integrating First Sport from the end of September had disrupted trade in the acquired chain and to a lesser extent in JD Sports.
It added that selling off stock lines inherited from First Sport had hit margins.
Like-for-like sales in First Sport were down by 5.3% during the period.
The poor trading continued in February but the group added today that new spring lines had boosted sales in JD Sports which were up 1.9% on a like-for-like basis in the last seven weeks.
The decline in First Sport like-for-like sales also slowed to 0.8% during the last seven weeks.
References: EGi News 01/05/03
