JJB Sports reported that total revenue for the 2006 fiscal year was £810.3 million ($1.47 bn), 8.7% higher than the £745.2 million ($1.37 bn) reported in 2005. Total revenue from the Leisure Division increased 38.5%, which reflects in part the increase in the number of operating locations within this Division from 32 at the end of 2005 to 39 at the end of fiscal 2006. Comps increased 7.5% for the year.
The principal increase in revenue from JJB's retail stores was from replica kit products which increased by £35.3 million ($63.9 mm) when compared to the last accounting period. This increase resulted partly from the FIFA World Cup in the summer of 2006 but also from new kits introduced by all the leading FA Premiership clubs at the start of the 2006/7 season and from our acquisition of the Glasgow Rangers franchise in June 2006. The increase in like-for-like revenue of locations which have traded for over 52 weeks is 7.5%.
The total gross margin achieved by the Group (including that from the Leisure Division) for the 52 weeks to 28 January 2007 was 47.5%, which is a slight increase over the 47.3% achieved in the previous accounting period.
The strong competitive stance that adopted in the second half of the previous accounting period continued into the
accounting period to 28 January 2007 although this pressure has begun to ease as we have sought to further differentiate product ranges from those of our major competitors as part of JJB's “serious about sport” strategy. Particularly strong
competition was experienced on the England replica shirts although the impact was offset by the high gross margin achieved
on health club revenue.
Net operating expenses increased by £28.1 million ($50.9 mm) or 8.9 per cent to £346.0 million ($626.8 mm) during the 52 weeks to 28 January 2007.
The increase in net operating costs was partly a result of the higher number of Leisure Division sites in operation during the
accounting period just ended, but was also the result of the following 2 items:-
A charge of £4.1 million (2006: £1.9 million) in respect of a further increase in the provision made for the penalty in
the action brought against the Company by the Office of Fair Trading, together with interest thereon, and
A charge of £3.3 million (2006: nil) in respect of the closure of the Icon stores.
Adjusted operating profit increased by 28.1 per cent to £46.4 million ($84.0 mm) from £36.2 million ($66.5 mm) which after the deduction of the adjusted operating items gives an increase in operating profit of 13.6% to £39.0 million ($70.6 mm) from £34.3 million ($63.0 mm) in the
comparative period.
Adjusted profit before taxation increased by 28.8 per cent to £45.9 million ($83.1 mm) from £35.6 million ($65.4 mm) and profit before taxation and after deducting the adjusted operating items increased by 14.1 per cent to £38.5 million ($69.7 mm) from £33.7 million ($61.9 mm).
