JJB Sports 'precarious again' after widening first-half losses

The scale of the turnaround facing JJB Sports, the troubled sportswear retailer, was laid bare yesterday after it posted widening half-year losses and "rebudgeted" for lower sales.

But Keith Jones, the chief executive of JJB Sports, said he "remained confident of JJB's return to profitability and growth", although he reiterated its turnaround could take up to five years.

The group – which narrowly avoided administration in March after implementing an insolvency procedure and tapping shareholders for £96.5m – also said there was no need to raise fresh cash into 2012. But it admitted that Christmas trading will be "very important". Indeed, some City analysts already fear again for its future in a market dominated by Sports Direct.

JJB's four main shareholders – Invesco Perpetual, Crystal Amber, Harris Associates and the Gates Foundation, who together account for 85 per cent of its shares – suffered a fresh blow yesterday, as its shares tumbled by 2.75p, or 19.3 per cent, to 11.5p.

Its pre-tax losses nearly tripled to £66.5m for the 26 weeks to 31 July, hit by restructuring charges of £31m. But it was also dragged down by falling sales and margins, as JJB was forced to discount to clear old and obsolete stock.

The group blamed "previous poor buying" for dire football sales. Mr Jones, who joined in March 2010 from Dixons Retail, said: "The reality is that in those two areas [replica shirts and boots] we did not have a differentiated enough offer." To this end, JJB has hired Ray Evans, the former managing director of Kitbag, as director of football.

Its total revenues tumbled by 22.6 per cent to £142.4m, while they fell by 17.7 per cent on a like-for-like basis. JJB's trading has also deteriorated since the second half of September – leaving it significantly behind the "mid-teens" third-quarter sales growth that it forecast in the fund-raising prospectus.

The group has now re-budgeted for lower second half sales. That said, JJB has slashed its annual rent and business rates bill by £8m, following its exit from 49 stores.

Peter Smedley, an analyst at Charles Stanley, said: "Given that current trading is dire and its impact on cash burn, we are concerned that JJB is becoming financially precarious again."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'