Profits slump at JJB

But chairman David Whelan – who owns 40 percent of JJB’s shares – denied the company would accept a rumoured takeover bid.

Here’s the summary of the results:

Preliminary Results For The 53 Weeks Ended 30 January 2005 JJB Sports plc (“JJB”), the UK’s largest sports retailer, announces its preliminary unaudited results for the 53 weeks ended 30 January 2005. Significant matters:

? Total turnover within the core JJB business, comparing two 52 week periods was 1.1 per cent lower, including a reduction in like for like turnover of 1.2 per cent.

• Gross margin fell by 70 basis points from 48.7 per cent to 48.0 per cent (comparing the 53 weeks ended 30 January 2005 with the 52 weeks ended 25 January 2004), affected by discounted promotions of excess clothing stocks.

• Underlying operating profit within the core JJB business fell by 28.0 per cent to £63.3 million from £88.0 million.

• Operating profit in the stand alone JJB retail stores fell to £103.6 million (before a share of head office and distribution centre costs). The successful reduction of excess clothing ranges resulted in a decrease in stock levels of 12.0 per cent to £112.7 million from £128.1 million at 25 January 2004, and policy changes made to limit range fragmentation give the Board confidence of a better performance from its clothing offer during the current accounting period.

• Continued expansion in the Leisure Division resulted in an increase in operating profits within that division (before a share of head office and distribution centre costs) of 17.1 per cent to £10.6 million.

• Major uplift in the opening programme for combined health clubs/superstores during 2005 – 18 units proposed to be opened, taking the number of units planned to be in operation at 29 January 2006 to 39. Membership of the 24 clubs now in operation has almost reached 100,000.

• Strong cash flow resulted in a net funds position of £4.4 million at 30 January 2005, compared to a net debt of £3.6 million at 25 January 2004 and after the return of £20.8 million to shareholders in a Tender Offer in February 2004.

• Proposed final dividend maintained at 7 pence net per ordinary share, giving a dividend of 10 pence per ordinary share for the full accounting period.

• Current trading conditions continue to be challenging with total turnover within the core JJB business for the 10 weeks ended 10 April 2005 1.3 per cent lower than the comparative period last year, including a like for like decrease of 1.2 pgross margin achieved in this period was marginally higher than that earned in the comparative period.