JD Sports makes peace with ousted chairman as half-year profits dip

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Retail giant JD Sports saw its profits shrink by around 12% in the first half of this year, despite a “strong” performance at its outlets in the UK and Ireland.

The results follow last year’s record pre-tax profits.

However, JD Sports said in its half-year results that it will pay a dividend this year – the first in two years – thanks to a return to “more normalized trading”.

The fashion chain is grappling with supply shortages, inflation and the threat of industrial action in key markets, as well as leadership issues with its ousted former executive chairman, Peter Cowgill.

On Thursday, the company said it had found a “friendly and constructive way forward” with Mr Cowgill, who will return as a consultant for three years on a £2m (€2.3m) deal.

He will receive £3.5m (€4m) over two years under the terms of his former contract, JD Sports said in its half-year results on Thursday.

He also appointed French businessman Régis Schultz – the former director of budget retailer Monoprix and chief financial officer of DIY merchant B&Q – as chief executive.

“While this is a transition period for the board, it is reassuring to see that this has not had an impact on the financial performance of the group, which continues to deliver strong results. “said non-executive chairman Andrew Higginson.

Profit before tax and exceptionals was £383.5 million (€437.7 million), compared to £439.5 million (€501.5 million) in the first half of 2021 , which JD Sports said was “at the peak” of expectations.

In the UK and Ireland, profit before tax and exceptionals was £153 million, compared to £174.2 million last year.

It recorded a return to profit from its sports retail business in Europe of £57.1million, compared to a loss of £7.2million in 2021, while profits in North America have declined to £130.4m this year from £245.5m in the first half. 2021.

Total revenue from its organic retail business rose 5%, including a return to growth in the United States, despite the lack of federal fiscal stimulus this year.

It offered to pay an interim dividend of 0.13 pence per ordinary share, after two years without a dividend.

Mr Higginson said he expects overall profit before tax and exceptional items for the year ending January 2023 to be “in line” with the record performance achieved last year.

“We continue to be reassured by the continued resilience of the group’s performance with trading to date through the second half following a similar trend to the first half,” Mr Higginson said.

“Given widespread macro-economic uncertainty, inflationary pressures and the potential for further supply chain disruptions with industrial action, a lingering risk in many markets, it is inevitable that we remain cautious about trading. for the rest of the second half.”

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