JD Sports Fashion, the U.K. retailer, said £700,000 of stock was looted in last month's riots in the country while one of its stores has yet to reopen after suffering fire damage. But it still reported a 20.6 percent jump in profit.
A total of 16 stores in London, Nottingham, Manchester and Birmingham were hit by the disorder, with six in London suffering “very significant thefts.” JD Sports said its losses would have been worse if not for the pre-emptive measures it took to stop looters gaining access to its stores.
“We are currently working with our insurers on the subsequent claim, covering theft of stock, repair costs and business interruption. We do not believe that the riots will have a material adverse impact on the outturn for the current year,” it said in a statement.
Its store in Woolwich in London is still closed as fire damage is repaired but the rest of the stores were reopened by Sunday August 21.
Despite the riots and store closures, profits rose to £20.1 million in the six months to the end of July, up from £16.6 million in the same period last year. Sales increased 14.6 percent to £439.8m, with like-for-like sales excluding VAT rising 1.6 percent in seven weeks to September 17.
However, excluding exceptional items, pre-tax profits declined 17 percent to £16 billlion in the half year to July 30 as margins were squeezed by the impact of faltering consumer confidence and the increase in VAT. JD Sports said the results were in line with its Board's expectations at the time of the preliminary announcement of results for the last financial year in April.
Peter Cowgill, Executive Chairman, said in the statement: “It is pleasing to report that Group profit before tax rose by 20.6% to £20.1 million (2010: £16.6 million). Our continual focus on exploiting all avenues of revenue growth and margin protection has enabled us to deliver a level of profit that represents a platform for meeting expectations for the full year, although trading conditions remain tough.
“Trading since the period end has continued to improve with gross like for like sales for the core UK and Ireland retail fascias in the seven week period to 17 September up by 3.3% (+2.5% Sports Fascias; +7.4% Fashion Fascias). Excluding the impact of VAT, the net revenues have increased in this period by 1.6% (+1.0% Sports Fascias; +5.0% Fashion Fascias). The result for the full year remains very dependent on the sales and margin performance in December and January and we will issue an Interim Management Statement on the third quarter in November.
“We continue to look for appropriate acquisition opportunities which can deliver additional sources of future earnings growth principally in overseas Sports Retail but also to compliment our core retail fascias.
“The board again believes that the Group is well positioned for future growth across its markets and trading is in line with its expectations.”
