TJ Hughes, the discount retailer being taken over by JJB Sports, posted unchanged profits today after staging a second-half trading revival.
The Liverpool-based group’s start to the financial year was rocked by a hostile takeover bid and the discovery that stock had been overvalued.
But chairman David Winterbottom said the performance improved “substantially” in the second half, with like-for-like sales ahead 11% in the last quarter of the period.
New marketing initiatives, better stock controls and strong consumer demand have driven the turnaround, the company said.
Pretax profits for the year to January 26 were unchanged at £4.2m following a 23% increase in group turnover at £192m.
Winterbottom said: “This represents a significant achievement after the distractions and disruptions of the first half.”
In October, the company reported half-year pretax losses of £1.3m, compared with profits of £2.6m for the same period a year earlier.
Figures were damaged by the cost of defending a hostile takeover and dealing with the discovery in April of a £3.6m stock overvaluation error.
During the year, selling space increased by 29% with new outlets at Romford, Hull, Maidstone, Kettering, Coventry and Glasgow.
TJ Hughes has 36 department stores but will open others at Scunthorpe, Newcastle and Redditch during this financial year.
JJB Sports, which earlier this month unveiled a £42.3m takeover of TJ Hughes, said it sees significant growth opportunities for the group.
The Wigan-based company – the UK’s largest sports retailer – intends to maintain the TJ Hughes brand and format if the deal gets shareholder approval.
Winterbottom added he was encouraged by the start to the new financial year, with like-for-like sales up 3.1% in the eight weeks to 24 March.
Turnover was up 25%, although this has been adversely affected by the two-week reorganisation of the company’s distribution centre.
EGi News 28/03/02
The Press Association
