Final Results

RNS Number : 2047V

JD Sports Fashion Plc

13 April 2021

JD SPORTS FASHION PLC

FINAL RESULTS

FOR THE 52 WEEKS ENDED 30 JANUARY 2021

JD Sports Fashion Plc (the 'Group'), the leading retailer of sports, fashion and outdoor brands, today announces its Final Results for the 52 weeks ended 30 January 2021 (2020: 52 weeks ended 1 February 2020).

	IFRS 16		Proforma IAS 17*
	2021	2020	2021	2020
	£m	£m	£m	£m

Revenue	6,167.3	6,110.8	6,167.3	6,110.8

Gross profit %	48.0%	47.0%	48.0%	47.0%

EBITDA* before exceptional items	990.2	979.8	649.3	623.6
Depreciation / amortisation	(507.9)	(462.9)	(183.1)	(151.8)

Operating profit (before exceptional items*)	482.3	516.9	466.2	471.8
Net interest expense	(61.0)	(78.1)	(6.1)	(6.2)

Profit before tax and exceptional items*	421.3	438.8	460.1	465.6
Exceptional items	(97.3)	(90.3)	(104.8)	(90.3)

Profit before tax	324.0	348.5	355.3	375.3

Basic earnings per ordinary share	23.05p	25.29p	26.26p	27.44p
Adjusted earnings per ordinary share*	32.19p	34.26p	36.19p	36.41p

Total dividend payable per ordinary share	1.44p	0.28p	1.44p	0.28p

Net cash at period end (a)	795.4	429.9	795.4	429.9

a) Net cash consists of cash and cash equivalents less interest-bearing loans and borrowings

b) Throughout this release '*' indicates the first instance of an alternative performance measure which are explained at the end of these final results

Group Highlights

· Significant retention of sales and profitability through an unprecedented period of global uncertainty and multiple periods of temporary store closures reflects:

o The strength and premium position of the JD brand and consumers' affinity to it

o Relevance of product offer to style conscious consumers

o Agile multichannel ecosystem built up over a number of years

o Infrastructure flexibility

· Transformational developments in the United States:

o Exceptional trading performance in the Finish Line and JD fascias in part driven by the enhanced consumer demand consequent to the US Government stimulus

o First flagship store for JD opened in Times Square, New York with a positive reaction from customers and international brand partners

o A further 37 former Finish Line stores converted to JD with 49 stores trading as JD at the end of the year

o Acquisitions of Shoe Palace (based in California) and, subsequent to the year end, DTLR (based in Maryland) complement the strengths of the existing Finish Line and JD fascias and significantly enhance the Group's exposure to key consumer demographics on the West Coast and East Coast of the United States

· International development of JD in other markets continues to progress positively although the number of new stores slowed temporarily as a consequence of restrictions on construction and fit out works with:

o Net increase of 31 JD stores across Mainland Europe

o Net increase of five JD stores in the Asia Pacific region

· Outdoor business returned to profitability in the second half of the year with a strong performance in key categories

· Physical retail in England and Wales now re-opened

· Physical retail in United States has largely traded free from Covid related restrictions in the new financial year to date

· Net cash at the period end of £795.4 million reflects the high point of the working capital cycle and is stated before:

o Completed acquisitions in the new year to date with aggregate cash consideration paid of approximately £380 million

o Reversal of temporary factors, including agreed tax deferrals and rent deferrals across our global businesses, totaling in excess of £125 million

· Ongoing significant investments in logistics to mitigate against the risks associated with:

o Requirement to operate with social distancing

o Duties payable consequent to the form of the UK's trade agreement with the European Union

· Dividend payments resumed with final dividend of 1.44p per share proposed which recognises the significant contribution to profitability from the Group's international operations, particularly those in the United States

· Key financial information of the two business segments is tabulated below:

Period to 30 January 2021

	Sports Fashion		Outdoor		Unall²	Total
	IFRS 16	IAS 17	IFRS 16	IAS 17		IFRS 16	IAS 17
	£m	£m	£m	£m	£m	£m	£m

Revenue	5,808.0	5,808.0	359.3	359.3	-	6,167.3	6,167.3

Gross profit %	48.4%	48.4%	42.2%	42.2%	-	48.0%	48.0%

EBITDA before exceptional items	955.1	636.2	35.1	13.1	-	990.2	649.3
Depreciation	(454.9)	(151.2)	(32.9)	(11.8)	-	(487.8)	(163.0)
Amortisation¹	(15.5)	(15.5)	(4.6)	(4.6)	-	(20.1)	(20.1)

Operating profit / (loss) before exceptional items	484.7	469.5	(2.4)	(3.3)	-	482.3	466.2
Net interest expense	(51.2)	-	(3.7)	-	(6.1)	(61.0)	(6.1)

Profit / (loss) before tax and exceptional items	433.5	469.5	(6.1)	(3.3)	(6.1)	421.3	460.1
Exceptional items	(76.9)	(76.9)	(20.4)	(27.9)	-	(97.3)	(104.8)

Profit / (loss) before tax	356.6	392.6	(26.5)	(31.2)	(6.1)	324.0	355.3

¹ This is a non-trading charge relating to the amortisation of various fascia names and brand names which arise consequent to the accounting of acquisitions made over a number of years.These charges are as follows:

• Sports Fashion: £15.5 million (2020: £5.4 million)

• Outdoor: £4.6 million (2020: £4.5 million)

² The Group considers that net funding costs are cross divisional in nature and cannot be allocated between the segments on a meaningful basis.

Period to 1 February 2020

	Sports Fashion		Outdoor		Unall²	Total
	IFRS 16	IAS 17	IFRS 16	IAS 17		IFRS 16	IAS 17
	£m	£m	£m	£m	£m	£m	£m

Revenue	5,696.8	5,696.8	414.0	414.0	-	6,110.8	6,110.8

Gross profit %	47.4%	47.4%	41.9%	41.9%	-	47.0%	47.0%

EBITDA before exceptional items	952.4	629.6	27.4	(6.0)	-	979.8	623.6
Depreciation	(413.8)	(132.0)	(39.2)	(9.9)	-	(453.0)	(141.9)
Amortisation¹	(5.4)	(5.4)	(4.5)	(4.5)	-	(9.9)	(9.9)

Operating profit / (loss) before exceptional items	533.2	492.2	(16.3)	(20.4)	-	516.9	471.8
Net interest expense	(64.7)	-	(7.2)	-	(6.2)	(78.1)	(6.2)

Profit / (loss) before tax and exceptional items	468.5	492.2	(23.5)	(20.4)	(6.2)	438.8	465.6
Exceptional items	(40.6)	(40.6)	(49.7)	(49.7)	-	(90.3)	(90.3)

Profit / (loss) before tax	427.9	451.6	(73.2)	(70.1)	(6.2)	348.5	375.3

Peter Cowgill, Executive Chairman, said:

"The global COVID-19 pandemic and, more recently, the UK's formal exit from the European Union have presented a series of unprecedented challenges which have severely tested all aspects of our business including our multichannel capabilities, the robustness of our operational infrastructure and the resilience of our colleagues. However, at all times, the Group has strived to do the right thing for all stakeholders.

"Notwithstanding these well publicised challenges, a number of positive themes have been increasingly apparent through the year which gives us confidence that, as we begin to emerge from the worst of the disruption, JD is at the pinnacle of the global sports fashion industry. We have a market leading multichannel proposition which continues to enhance its relevance to consumers and has the necessary agility to progress in an environment where the retailing of international brands may see permanent global structural change.

"Our positive outlook is reflected by the fact that, even with the unique circumstances of store closures for a substantial period of the year, the Group has retained substantially all of its record profitability from the prior year with a profit before tax and exceptional items of £421.3 million (2020: £438.8 million). We are indebted to all of our teams in our different territories for their determination and resilience in dealing with the potentially life changing challenges of the past year and we fully acknowledge the contribution from all of our colleagues in the delivery of this excellent result.

"Our recent completed acquisitions of Shoe Palace and DTLR in the United States together with the conditional acquisition of Sizeer in Central and Eastern Europe are important steps in our evolution which will transform our consumer connection in these markets and further develop our key brand relationships.

"Whilst we must recognise the substantial level of temporary store closures to date and ongoing, we remain confident that we are well placed to benefit from the opportunities that prevail and, at this early stage,our current best estimate is that the Group headline profit before tax for the full year to 29 January 2022 will be in the range of £475 million to £500 million."

Enquiries:

JD Sports Fashion Plc Tel: 0161 767 1000

Peter Cowgill, Executive Chairman

Neil Greenhalgh, Chief Financial Officer

Jennifer Iveson, Investor Relations

MHP Communications Tel: 0203 128 8788

Andrew Jaques

Giles Robinson

Charles Hirst

Catherine Chapman

Executive Chairman's Statement

Group Developments

Introduction

The global COVID-19 pandemic and, more recently, the UK's formal exit from the European Union have presented a series of unprecedented challenges which have severely tested all aspects of our business including our multichannel capabilities, the robustness of our operational infrastructure and the resilience of our colleagues. However, at all times, the Group has strived to do the right thing for all stakeholders.

Notwithstanding these well publicised challenges, a number of positive themes have been increasingly apparent through the year which gives us confidence that, as we begin to emerge from the worst of the disruption, JD is at the pinnacle of the global sports fashion industry. We have a market leading multichannel proposition which continues to enhance its relevance to consumers and has the necessary agility to progress in an environment where the retailing of international brands may see permanent global structural change.

· Deep consumer connection: The deep bond between JD and its consumers is one that has been nurtured over a number of years. Regardless of the events of the past year, our loyal customers expect to engage with us through any channel and be presented with an innovative and exciting product mix that meets their style aspirations. Our teams have risen to the challenges associated with the frequent shift in demand between channels resulting in a strong retention of sales across our various markets, but particularly in the UK and United States. We also continue to invest in data analytics to further enhance our insight of the consumer.

· Benefit of width in the category offer: Apparel sales, principally casualwear and sportswear, performed strongly in the year with sales of apparel ranges representing more than 50% of revenues in the UK. Whilst we must obviously acknowledge the increased levels of working and exercising at home, it is our belief that the growth in casualwear and sportswear is not a temporary phenomenon with the culture of casual attire in working and social environments gathering momentum over a number of years.

· Multichannel approach provides a competitive advantage: Regardless of the fact that stores in a number of markets have been closed for extended periods of time, we believe it is clear that we will build the strongest connection with consumers and gain competitive advantage by operating stores in tandem with a strong online offer. Stores provide a platform to physically showcase product, offer consumers the opportunity to see and try the product, and give us the operational flexibility and agility to offer an enhanced speed of service for online orders.

· JD is highly regarded by the brands: JD has a positive relationship and is of increasing relevance to a significant number of international brands who recognise that we share their vision of an elevated marketplace and that we look to nurture collaborative affiliations over the long term. They also acknowledge that we actively seek to enhance the equity of a brand through a compelling and differentiated proposition in stores and online which gives a rich experience consistent with the premium nature of the product mix. These brands particularly value the fact that we have a unique relationship with our customer base that helps give immediate credibility to new styles and ranges.

· Strong awareness comes from international momentum: The COVID-19 pandemic is likely to be the catalyst that will drive further consolidation within the global retailing of the international sports brands. The Group is in a strong position to play a full part in this process with the Group's acquisition of Finish Line in the United States in 2018, combined with the rapid progress that we have made across a number of other international markets, transforming both the awareness of the Group and our reputation with potential partners. We are already seeing positive consequences of this with the Group complementing its existing fascias in the United States with the acquisition of the Shoe Palace business, which completed in December 2020, and the DTLR business, which completed after the year end in March 2021. Recognising the importance of being able to offer sellers certainty on execution in future competitive deal processes, the Group undertook a successful placing shortly after the end of the financial year with 58.4 million new shares admitted to the market on 8 February 2021, a process which has raised approximately £456.0 million (after costs).

Our positive outlook is reflected by the fact that, even with the unique circumstances of store closures for a substantial period of the year, the Group has retained substantially all of its record profitability from the prior year with a profit before tax and exceptional items of £421.3 million (2020: £438.8 million). On a proforma basis under IAS 17 'Leases', with rents recognised according to contractual terms, the headline profit before tax and exceptional items would have been £38.8 million higher at £460.1 million (2020: £26.8 million higher at £465.6 million).

This is a pleasing result although it should be recognised that transitioning multichannel businesses to operate purely online for a large part of the year necessitated additional costs principally from customer acquisition marketing and operating a more manual fulfilment process in our warehouses; a process which is even more challenging with strict rules on social distancing. Additional costs were also incurred in providing enhanced health and safety measures at all locations, including stores, and catering for flexibleworking arrangements for colleagues.

Significant M&A Transactions

Livestock

At the beginning of the period, we acquired Onepointfive Ventures Limited in Canada which consists of four stores trading as Livestock and a website trading as Deadstock. Based in Vancouver, this business and its management team will provide the platform to develop JD group fascias in Canada with the first Size? store expected to open later in the Spring.

Xercise4Less

During the year we significantly increased our critical mass and national presence with the acquisition, out of administration, of an initial 50 gyms which had previously traded as Xercise4Less for a total consideration of £24.2 million. We have subsequently returned 11 of the acquired sites back to the relevant landlords and currently anticipate retaining at least 36 of the remaining gyms longer term, although negotiations on new leases are still ongoing on a small number of sites. The programme of works to convert these gyms to the JD fascia was accelerated through the most recent temporary closure period with a total of 19 clubs now converted to the JD format.

Shoe Palace

The transaction to acquire the Shoe Palace business completed on 14 December 2020. Based in San Jose, California, Shoe Palace was established in 1993 by the Mersho family and, on acquisition, had 167 stores, the vast majority of which trade under the Shoe Palace banner. More than half of the stores are located in California, although there is also an established retail presence in Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii, with the store network supported by a developing e-commerce platform.

The acquisition of Shoe Palace significantly enhances our connection with the Spanish speaking communities on the West Coast and in the Southern border states and is therefore an excellent complementary fit with our existing Finish Line and JD businesses whose consumer connection is at its strongest in the industrial states in the North and East of the United States.

DTLR

On 31 January 2021, we exchanged contracts on the conditional acquisition of DTLR Villa LLC which is based in Baltimore, Maryland. At exchange, this business had 247 stores trading primarily as DTLR across 19 states. The transaction was subject to certain conditions, including those related to the Hart-Scott-Rodino Antitrust Improvements Act, with formal completion taking place on 17 March 2021.

As with Shoe Palace, we fully recognise and appreciate the rich connection that DTLR has with the communities where its stores are located. Therefore, this is another excellent complementary fit to our existing businesses, strengthening our connection with the African American communities in the North and East of the United States.

Sizeer

On 11 March 2021, we exchanged contracts on the conditional acquisition of a 60% stake in Marketing Investment Group Spóka Akcyjna which is based in Krakow, Poland. At exchange, this business had 410 stores trading as either Sizeer or 50 Style across nine countries in Central and Eastern Europe. Completion of this acquisition is subject to receiving clearance from the relevant competition authorities which is anticipated before the end of May 2021. Once completed, this acquisition will provide us with an infrastructure and management team for the future development of JD in Central and Eastern Europe.

Update on Footasylum

The Competition and Markets Authority ('CMA') announced in its Final Report in May 2020 that it had decided to prohibit the merger with Footasylum and that, consequently, it required the Group to fully divest its investment. This decision was subsequently quashed on appeal in November 2020 by the Competition Appeal Tribunal ('CAT') who determined that the case should be passed back to the CMA for full reconsideration. Subsequently, the CMA asked both the CAT and the Court of Appeal for leave to appeal the CAT's decision but, on each occasion, this was refused. Accordingly, the merger with Footasylum will now be re-examined by the CMA; a process expected to take several months.

The continuation of the temporary store closures into the new financial year together with the reduction in the support available for local authority rates have inevitably had a negative impact on the expectations for the performance of Footasylum in the year to 29 January 2022. Furthermore, there is inevitably considerable uncertainty as to whether levels of footfall into the Footasylum stores, which attract an older demographic than JD, will recover to historic levels which could adversely impact the longer term viability of certain stores. As a consequence, the financial projections no longer support the carrying value of the fascia name and goodwill which arose on the acquisition with a charge of £55.6 million recognised in relation to the impairment of these assets.

In the meantime, whilst the results of Footasylum continue to be consolidated within the Group's financial statements, we continue to observe the CMA's ongoing enforcement undertakings which oblige us to operate the Footasylum business separately from the rest of the Group.

Supply Chain Developments & Brexit

We successfully kept our warehouses running throughout the pandemic by adopting new operating procedures and investing in the necessary modifications which ensured the safety of our colleagues whilst on site. However, given that sales through online channels will, in all probability, remain at an elevated level and that our warehouses may need to operate with social distancing restrictions for the foreseeable future, we have concluded that we require additional warehousing capacity in the UK which can be dedicated to the fulfilment of online orders. In this regard, we have signed a Letter of Intent with Clipper Logistics Plc for Clipper to provide a range of logistics operations, including warehousing and e-fulfilment. These new services are planned to commence later in the year. At this point, our warehouse at Kingsway will largely focus on the supply of product for physical stores which better suits the current automation equipment at the site.

Further, the terms of the UK's trading agreement with the European Union mean that we no longer enjoy 'tariff free' frictionless trading with our former European partners. As a consequence, we are now incurring some duties and disruption from Customs checks on the transfer of goods from the UK into EU countries. We have been able to reduce our exposure to the adverse consequences of Brexit by opening an 80,000 sqft warehouse in Belgium in Autumn 2020 which is fulfilling a large proportion of our core ranges and fastest moving lines required for stores in Mainland Europe. This site is functioning very well but it does not provide a solution for either online orders or product destined for the Republic of Ireland. In this regard, we are currently fitting out a 65,000 sqft warehouse near Dublin which will become operational in the second half of this year. We also continue to review opportunities for a larger permanent facility in Europe which can process substantially all of the volume required for stores and online orders in Mainland Europe although it will likely be Autumn 2022 before an enlarged facility would be available for use.

COVID-19 Lease Negotiations

It has been well publicised that we have withheld the payment of some rents across our global retail estate this year where we have been forced to close stores as a result of the pandemic. We have worked tirelessly with our landlord partners in all markets to find solutions to support the business through these closure periods. We have now reached agreement in the vast majority of cases and continue to engage with the small number of those landlords who, to date, have not been prepared to share any of the financial burden during this challenging time when our stores have not been trading.

Government Support

The Group acknowledges the various public sector initiatives which were put in place in a number of territories where it operates to provide support to businesses on taxation, including those related to property occupation, and the costs of employment. This support included the furlough scheme, and its equivalents in other countries, which achieved their objectives of conserving jobs as, without this support, it is likely we would have had to make tens of thousands of our colleagues, particularly those who work in stores, redundant. To help minimise the financial impact on affected colleagues, the Group has voluntarily enhanced the furlough payments in the UK for those colleagues paid above the £2,500 monthly cap.

During the year, the Group was granted a £300 million facility under the UK Government's Covid Corporate Financing Facility Scheme. The Group did not access this facility at any time with the scheme closing on 22 March 2021.

Sports Fashion

UK and Republic of Ireland

JD & Size?

We are encouraged by the resilient nature of trading in our core UK and Republic of Ireland market throughout the year. During the initial closure period in the Spring approximately 70% of the combined store and online revenues from the prior year were retained through solely digital channels. This retention rate increased to 100% through November when stores in the UK were closed again. There is cause for optimism in the future of our store estate though as, even with materially lower footfall into many city centres and major shopping malls, sales in like for like stores grew by more than 4% in the Q3 period from August to October, which was largely a period free from restrictions.

Recognising the benefits that accrue from investing in our retail estate in terms of consumer engagement, we have continued with our programme of upsizes in key locations with bigger stores opened during the year in Exeter, Plymouth and Brighton. We intend to continue with this programme in the new financial year with new larger format stores scheduled to open in a number of key locations including Belfast, Edinburgh and Stratford, East London.

Premium Fashion

Our premium brand Fashion businesses are an important part of our Group, further elevating our overall proposition. Mainline Menswear, which to all extents is a pureplay online business, had a very strong year in particular with new customers attracted by its reputation for a high quality digital and customer service experience. Elsewhere, in those businesses which have both physical and digital offers, we are reassured by the fact that the retention of sales through the various temporary closure periods was broadly consistent with that seen in JD. We continue to make selective complementary acquisitions in this area where they expand our geographical presence or brand relationships.

Gyms

The lockdowns in the year have brought into sharper focus the physical and mental health benefits of regular exercise. Therefore, we are pleased to welcome our members back to our clubs in England which have now re-opened and look forward to re-opening in the other nations shortly. We are confident that our JD and X4L clubs offer a safe environment for our members, with significant investments made in reconfiguring the space in our clubs to facilitate social distancing and providing sanitisation stations.

It is inevitable that the COVID-19 pandemic resulted in a temporary slowing of the organic club opening programme with only one new gym, being a second club in Glasgow, opening during the year. We are optimistic that we will return to previous levels of activity in the new financial year with at least five further organic clubs opening this year complementing further conversions of the acquired X4L clubs.

Europe

JD & Size?

Across Europe, the average retention of sales through the period of the temporary store closures in the Spring was approximately 35% with a stronger retention in Northern Europe where online is more mature. Footfall was initially slow to recover as stores re-opened although it progressively improved through the Summer and early Autumn. Like for like store sales were positive in Q3 in many markets although the significant exception to this were the stores in Iberia where a large part of employment, and consequently the wider economy, is linked to tourism. Restrictions were reintroduced before Christmas in a number of markets including the closure of all stores in Germany and the Netherlands. The retention of sales through this closure period in these countries was approximately 60%, which is slightly ahead of the retention that we saw in the Spring. There continue to be partial closures or restricted trading hours elsewhere including Italy, France and Spain.

As would be expected, as a direct result of the COVID-19 outbreak, the number of new store openings this year was reduced with 31 net new stores opened during the year, which included a flagship style store on the key shopping street of Rue de Rivoli in the centre of Paris. We expect to increase the number of new stores in the new financial year with openings closer to our previously stated ambition of one new store per week on average.

Sprinter & Sport Zone

As with JD, online trading is less mature for Sprinter and Sport Zone across Iberia and, consequently, only 20% of the combined physical and digital revenues in the prior year were retained online in the period of the national store closures in the Spring.

We were encouraged though with trading through the second half of the year, prior to the second national closure in Portugal in early January 2021, with total growth across the region of around 10%. There have also been further temporary closure periods in Spain although these have been at the local rather than national level with some restrictions limited to weekends only. Restrictions across both Spain and Portugal have now begun to ease and we are confident that we are well placed to progress positively.

Asia Pacific

We are pleased with the further positive developments in Australia with 30 stores now trading (2020: 24) after six stores were opened in the year. Other than the temporary closure of seven stores in the Melbourne area through September and October, the stores in Australia were largely able to remain open throughout the year.

Elsewhere, the performance in our other territories was negatively impacted by the lack of tourism from China which is a strong driver of footfall in Malaysia and South Korea in particular. We would not expect the performance in these markets to materially improve until there is a re-opening of the tourist sector.

North America

Finish Line & JD

The Finish Line and JD businesses have had an exceptional year. There are a number of reasons for this:

·The United States is widely regarded as the most mature market in the world for online trading with our digital team at Finish Line highly regarded within the industry. As such, it is not surprising that, of all our global businesses, it was Finish Line and JD in the United States that saw the greatest retention rate through the temporary closure period in the first half with online revenues equivalent to approximately 75% of the combined physical and digital revenues in the prior year.

· Consistent with other national retailers in the United States, our businesses benefitted significantly from May to July from the fiscal stimulus made available by the Federal Government. Total revenues across physical and digital channels increased by nearly 50% in this period. This strong demand resulted in sector wide lower inventory levels which are not expected to normalise until later in 2021. Consequently, there was less promotional activity through the rest of the year than might have been expected which has benefitted gross margins in the second half of the year.

· We are encouraged by the development of JD in the United States with 49 stores trading at the end of the year (2020: 11) including the conversion of 37 former Finish Line stores, the majority of which were converted in the lower cost 'badge flip' style, complementing the opening of our first flagship store in Times Square, New York. It is our intention to convert up to 50 more Finish Line stores to JD in the current financial year.

Financial Performance

Whilst COVID-19 has inevitably constrained our short term progress, we firmly believe that we have a robust premium branded multichannel proposition with our loyal consumers comfortable engaging with us in any channel. The resilience of our businesses is reflected in the fact that, despite the challenges of the year, the profitability in Sports Fashion has largely been maintained with a profit before tax and exceptional items of £433.5 million (2020: £468.5 million). On a proforma basis under IAS 17 'Leases' the profit before tax and exceptional items would have been £469.5 million (2020: £492.2 million).

Included within the result is a very positive performance from the Finish Line and JD businesses in the United States with the Government stimulus in the first half of the year driving a material, but short term, impact on performance with total revenues from these businesses increasing to £1,704.3 million (2020: £1,601.5 million) and the profit before tax and exceptional items increasing significantly to £156.6 million (2020: £94.2 million). Elsewhere in North America, in the six week period after completion, the Shoe Palace business has contributed a profit before tax and exceptional items of £13.9 million with revenues of £56.1 million.

Overall gross margins increased within Sports Fashion by 1.0% to 48.4% (2020: 47.4%). This is largely due to a stronger margin in the United States with strong demand resulting in lower levels of promotional activity in the overall market compared to previous years.

After recognising exceptional items in the period of £76.9 million (2020: £40.6 million) principally relating to the impairment of intangible assets arising on the acquisition of the Footasylum business in previous years, the profit before tax in Sports Fashion was £356.6 million (2020: £427.9 million).

Outdoor

We acknowledge that the restructure of Go Outdoors in the first half of the year was a difficult process. However, we believe that it was a necessary exercise as the inflexible and uncompetitive terms of the historic property leases in the business meant that Go Outdoors was in danger of becoming a material drain on Group profitability for the foreseeable future. The Group protected the interests of creditors in this process by honouring all liabilities with regards to branded stock suppliers, employees, HMRC taxation, customer returns and historic gift card sales. Further, all pre‐existing Go Outdoors employees transferred across to the new business with their previous terms and conditions of employment preserved.To date, two significantly loss-making stores have been closed with new terms either completed or substantially agreed on a further 53 stores. Dialogue continues with landlords on the remaining stores.

This restructure has given Go Outdoors a positive platform from which to develop and we intend to invest in all aspects of the business to provide an instore and digital experience which inspires consumers to get outdoors. We will do this by presenting authoritative product offers in key categories. This includes fishing where we have now started to integrate the Fishing Republic business into larger Go Outdoors stores by creating specialist areas for fishing products. In December 2020, we further delivered on this approach through the acquisition of the highly regarded Naylors equestrian business which, on acquisition, had three standalone stores. As with Fishing Republic, it is our intention to include Naylors branded equestrian areas in Go Outdoors stores where space allows.

The Go Outdoors, Blacks, Millets and Ultimate Outdoors businesses now operate on common merchandising systems with shared commercial resources. Further, all stock is now fulfilled from a separate dedicated warehouse at Middlewich. This operational integration provides the most cost efficient platform for these businesses to develop.

We are encouraged by the performance of all of our Outdoor businesses in the second half of the year. In the Q3 period, which was largely a period free from trading restrictions, we saw sales growth across the combined physical and digital channels of more than 10%. Many of our stores had to be closed again at various times through Q4 with total sales retention through the closure periods of approximately 80%, which was ahead of the retention rates that we saw in the initial closure period in the Spring.

Financial Performance

The positive consequences of the restructuring of the Outdoor businesses is reflected in the fact that, even with the stores closed for a number of months, Outdoor reduced its loss before exceptional items for the full year to £6.1 million (2020: loss of £23.5 million). The positive performance through the second half is reflected in the fact that our businesses made a profit before exceptional items in this period of £10.7 million (2020: loss of £3.4 million).

Overall gross margins within Outdoor for the full year increased by 0.3% to 42.2% (2020: 41.9%).

After recognising exceptional items in the period of £20.4 million (2020: £49.7 million) principally relating to the restructure of the Go Outdoors business in the first half of the year, the loss before tax in Outdoor reduced to £26.5 million (2020: £73.2 million).

Financial Summary

Revenue, Gross Margin and Overheads

Notwithstanding the temporary closure of stores in a number of countries at various times in the year, total revenue for the Group increased by approximately 1% in the year to £6,167.3 million (2020: £6,110.8 million). This includes total revenues of £1,760.4 million from our combined businesses in the United States (2020: £1,601.5 million) of which Shoe Palace, which was only part of the Group for approximately six weeks following its acquisition on 14 December 2020, contributed £56.1 million. Given the temporary closure periods in the year, it would not be meaningful to present sales on a like for like basis.

Total gross margin in the year of 48.0% was slightly ahead of the prior year (2020: 47.0%) largely due to a stronger margin in the United States with strong demand consequent to the federal fiscal stimulus driving lower levels of promotional activity in the overall market compared to previous years.

Profit Before Tax

Profit before tax and exceptional items decreased slightly to £421.3 million (2020: £438.8 million).

The profit before tax and exceptional items includes a profit of £170.5 million (2020: £94.2 million) from our combined businesses in the United States of which Shoe Palace contributed £13.9 million in the six weeks post acquisition.

There were exceptional items in the year of £97.3 million (2020: £90.3 million). These exceptional items comprised:

	IFRS 16		Proforma IAS 17
	2021	2020	2021	2020
	m	m	m	m

Impairment of goodwill and fascia names (1)	56.2	43.1	56.2	43.1
Movement in fair value of put and call options (2)	20.7	31.4	20.7	31.4
Restructuring of Go Outdoors (3)	20.4	-	27.9	-
Integration of Outdoor systems and warehousing (4)	-	7.2	-	7.2
Integration of Sport Zone into Sprinter infrastructure (5)	-	8.6	-	8.6

Total exceptional charge	97.3	90.3	104.8	90.3

1. The impairment in the current period principally constitutes a charge of £55.6 million relating to the impairment of the goodwill and fascia name arising in prior years on the acquisition of Footasylum. The impairment in the prior period relates to the impairment of the goodwill arising in prior years on the acquisition of Go Outdoors Topco Limited and Choice Limited.

2. Movement in the fair value of the liabilities in respect of the put and call options.

3. The net impact consequent to the restructuring of Go Outdoors in the period including a charge of £33.3 million in relation to the impairment of intangible assets, a charge of £4.9 million in relation to the impairment of leasehold improvements and a credit of £17.8 million in relation to the extinguishment of lease commitments (the credit in relation to the extinguishment of lease commitments under IAS 17 'Leases' was £10.3 million).

4. Costs arising from the integration and consolidation of the principal IT systems, warehousing and other infrastructure in Go Outdoors.

5. Costs associated with transferring the stocks and other operations of Sport Zone into the Sprinter infrastructure.

Group profit before tax decreased by approximately 7% to £324.0 million (2020: £348.5 million).

Proforma Results Under IAS17 'Leases'

On a proforma basis under IAS 17 'Leases', with rents recognised according to contractual terms, the headline profit before tax and exceptional items for the Group would have been £38.8 million higher at £460.1 million (2020: £26.8 million higher at £465.6 million). After exceptional items totalling £104.8 million (2020: £90.3 million), the profit before tax on the same proforma basis would have been £355.3 million (2020: £375.3 million).

Cash and Working Capital

The net cash balance at the end of the period was £795.4 million (2020: £429.9 million) with very strong cash generation in the United States reflecting the exceptional trading in that country, particularly through the first half. The net cash at 30 January 2021 is stated net of £68.9 million ($94.9 million) in relation to deferred consideration on the acquisition of Shoe Palace which is due to be paid, with no conditionality or dependence on performance criteria, to the Mersho Brothers on various dates through 2021. The net cash position at the period end is also stated before the cash consideration paid on completed acquisitions in the new year to date, which total approximately £380 million. The net cash also includes a number of temporary factors which, in aggregate across the Group, total in excess of £125 million and will likely reverse in the first half of the year to 29 January 2022. This total principally relates to deferred rents as we continue to reach agreements with the relevant landlords.

Stocks at the end of the period of £813.7 million are broadly consistent with the prior year (2020: £811.8 million). However, this includes £50.9 million of stocks in businesses which were acquired in the year. Therefore, stocks in the like for like businesses of £762.8 million are £49.0 million lower than the previous year largely as a result of lower stocks in the combined Finish Line and JD business in the United States where the period end stocks of $167.7 million were approximately 40% lower than the previous year (2020: $282.2 million). As with other retailers in the United States, we have recently experienced some minor delays in receiving product due to delays at ports. To date, this is not materially constraining the overall financial performance with margins ahead of prior year levels. Some new product launches have had to be pushed back though and we continue to work with our international brand partners to ensure the timely flow of product.

COVID-19 has inevitably had a significant impact on the projects which we have undertaken in the period with gross capital expenditure (excluding disposal costs) decreased to £132.0 million (2020: £177.2 million) as construction activity, including the fitting out of stores, was temporarily paused on occasions in a number of countries. Despite these challenges, the primary focus of our capital expenditure remains our physical retail fascias with a spend in the period of £73.5 million (2020: £106.5 million). It is significant that whilst the overall spend on our retail fascias may have reduced, the spend across our combined retail fascias in North America actually increased slightly to £21.0 million (2020: £20.4 million).

The Group's principal bank facilities continue to comprise a £700 million committed syndicated Revolving Credit Facility ('RCF') in the UK, which expires on 6 November 2024 and a syndicated Asset Based Lending Facility ('ABL') in the United States which has a maximum revolving advance amount of approximately $300 million and expires on 18 June 2023. Neither facility was drawn down at the period end (2020: UK RCF £nil; US ABL $nil).

Subsequent to the period end, the Group undertook a successful placing with 58.4 million new shares admitted to the market on 8 February 2021, a process which has raised approximately £456.0 million (after costs).

We will continue to use our cash resources to make selective acquisitions and investments where they benefit our strategic development.

Dividends and Earnings per Share

Given the significant contribution to profitability from the Group's international operations, particularly those in the United States, the Board has concluded, after a careful and considered review, that it is appropriate to resume the payment of dividends. However, the Board also recognises that, in the current situation, dividends should be modest with funding retained for our ongoing development opportunities. Accordingly, the Board proposes paying a final dividend of 1.44p (2020: nil) per ordinary share which is at the same level as the final dividend made after the year to 2 February 2019. Subject to shareholder approval at our AGM, the proposed final dividend will be paid on 2 August 2021 to all shareholders on the register at 25 June 2021.

The basic earnings per ordinary share decreased by 8.9% to 23.05p (2020: 25.29p).

The adjusted earnings per ordinary share before exceptional items decreased by 6.0% to 32.19p (2020: 34.26p).

Store Portfolio

During the period, store numbers have moved as follows:

Sports Fashion

	Period Start	New Stores	Transfers	Acquired	Closures	Period End

JD & Size?
UK & Republic of Ireland	402	9	-	-	(11)	400
Europe	304	35	1	-	(5)	335
Asia Pacific	64	8	-	-	(3)	69
United States	11	1	37	-	-	49
Size?	37	2	-	-	(6)	33

	818	55	38	-	(25)	886

Finish Line, Livestock & Shoe Palace
Finish Line (own)	508	-	(37)	-	(7)	464
Finish Line (Macy's)	295	1	-	-	(6)	290
Livestock	-	-	-	4	-	4
Shoe Palace (i)	-	-	-	167	-	167

	803	1	(37)	171	(13)	925

Fashion: UK	153	2	-	4	(5)	154
Other Europe (ii)	427	8	(1)	-	(3)	431
Other Asia Pac	2	-	-	-	(2)	-


Total Sports Fashion	2,203	66	-	175	(48)	2,396

(i) Includes four stores trading as Nice Kicks

(ii) Chausport (France), Sprinter (Spain & Canary Islands), Sport Zone (Portugal) and Perry Sport / Aktiesport (the Netherlands)

Outdoor

	Period Start	New Stores	Acquired	Closures	Period End

Blacks	57	-	-	-	57
Millets	97	1	-	(5)	93
Ultimate Outdoors	6	-	-	(1)	5
Tiso	13	-	-	-	13
Go Outdoors	67	1	-	(2)	66
Go Fishing	5	-	-	(2)	3
Naylors	-	-	3	-	3

Total Outdoor	245	2	3	(10)	240

People

We are indebted to all of our teams in our different territories for their determination and resilience in dealing with the potentially life changing challenges of the past year and we fully acknowledge the contribution that our colleagues made in delivering this excellent result. We particularly recognise the efforts of our colleagues who work in our logistics and retail operations whose roles do not lend themselves to working from home and who have perhaps had to deal with the greatest amount of change in their roles. Whilst there may be some cause for optimism at this time, we are not complacent about the ongoing threat to health from COVID-19 and I want to assure all our colleagues that their safety, and that of our consumers, has been and will always be our number one priority.

In a rapidly changing global environment, our colleagues will have both challenges and opportunities in the future. It is vital therefore that we continue to attract the best talent for our business. In this regard, we are delighted to be part of the UK Government's 'Kickstart Scheme' and will be providing national work placements across our Retail Stores, Distribution Centre and Head Office throughout the year for 16-24 year olds on Universal Credit who have been impacted by the negative effects of the pandemic on the employment market. As retailers of the latest and most exclusive sports fashion and outdoor clothing, footwear and equipment we offer many different career opportunities for young people who want to develop in a fast-paced and exciting company and Kickstart is the perfect way for them to get a flavour of our operations whilst being fully supported to gain the essential skills that they will need in the future.

The Board welcomes the initiative and focus of the Parker Review and will engage with the Parker Review as appropriate, just as it did with the Alexander-Hampton Review in recent years. The Board strives to build a diverse and inclusive team and to promote a diverse and inclusive culture throughout the business. The success of the Group is in its ability to speak to and identify with its consumers and, as such, it is crucial that the employees of the Group, at all levels, reflect the diverse nature of our consumers and of our communities. It is the Board's strong belief that if all colleagues of the Group feel supported and respected and are inspired to grow and develop as individuals then this will ultimately serve our business better and promote the long term success of the Group.

The Group is absolutely committed to promoting policies which ensure that colleagues and customers are treated equally regardless of ethnicity, social origin, gender, sexual orientation, disability or age. Following the tragic death of George Floyd in the United States, we worked with our teams around the world and with both the JD Foundation and the Finish Line Youth Foundation to ensure that, across the Group, we play an integral part in what is hopefully a united global approach to eradicate not just racism but all forms of discrimination from society.

We have launched our Inclusivity Campaign which will support our promise to educate and train our colleagues, with a focus on key topics such as Equality, Diversity, Biases and Cultural Intelligence. Alongside the introduction of our Diversity & Inclusion forums for our colleagues, we are committed to engage, learn and promote dialogue around potentially sensitive subjects in order to improve understanding and awareness throughout the business.

Environmental, Social and Governance Update

Prior to the Group's entry into the FTSE 100, the Group founded a formal Environmental, Social and Governance ('ESG') Committee to drive a step-change in the transparency and performance comparison on ESG matters within the Group. The ESG Committee determines ESG-related strategy, risk assessment and the monitoring of ESG performance across the Group's respective fascias and territories. The ESG Committee is also responsible for the assessment and publication of our ESG-related principal risks and the communication of our strategy to colleagues, customers and investors.

Whilst our physical stores have seen significant interruption during the year, our desire to continue making progress is undiminished with the 2021 Annual Report and Accounts detailing our further achievements in the year and our objectives for future years. A key tool within the communication process is our corporate website which has been re-purposed over the last two years to provide detailed explanations and case studies highlighting our progress on ESG matters.

Our achievements in the year include:

· The Group achieved an 'A-' rating for our 2020 Carbon Disclosure Project ('CDP') Climate Change assessment which outperformed our sector benchmark by three grades.

· We attained a 'B' rating for our first submission within the CDPs 'Water Security' category which outperformed our sector benchmark by two grades.

· The Group achieved recognition as a 'Committed' supporter by the Science Based Targets initiative (SBTi) board in December 2020.

· We launched our '#IAmSustainable' learning programme, with the aim of helping our colleagues become better protectors of the planet, whilst also achieving valuable skills accreditation.

· The Group achieved an independently audited 'zero to landfill' accreditation for our largest directly operated site (Kingsway Distribution Centre).

· The Group has reduced its use of virgin polyester in its private label manufacturing whilst increasing the use of responsibly sourced cotton.

· In October 2020, the JD Foundation (our primary vehicle for social and community support) announced a two-year partnership with Blueprint For All (formerly known as the Stephen Lawrence Charitable Trust) as part of our Diversity and Inclusion programme.

Current Trading and Outlook

After a difficult start to the year with a further period of store closures in a number of markets and the operational disruption from Brexit, it is pleasing to report that stores in our domestic market have now started to re-open. We are absolutely confident that JD's premium multi-brand proposition retains its consumer appeal and we look forward to welcoming customers back into stores in our remaining markets in due course. We are encouraged with trading to date in the new year with levels of sales retention in those markets which have experienced closures running slightly ahead of those in Spring 2020.

Our recent completed acquisitions of Shoe Palace and DTLR in the United States together with the conditional acquisition of Sizeer in Central and Eastern Europe are important steps in our evolution which will transform our consumer connection in these markets and further develop our key brand relationships. We look forward to working with our new colleagues in these businesses to further enhance their market leading propositions.

Whilst we must recognise the substantial level of temporary store closures to date and ongoing, we remain confident that we are well placed to benefit from the opportunities that prevail and, at this early stage,our current best estimate is that the Group headline profit before tax for the full year to 29 January 2022 will be in the range of £475 million to £500 million.

Our next scheduled update will take place upon the announcement of our Interim Results which is scheduled for 14 September 2021.

Peter Cowgill

Executive Chairman

13 April 2021

Consolidated Income Statement

For the 52 weeks ended 30 January 2021

	Note	52 weeks to 30 January 2021 £m	52 weeks to 1 February 2020 £m
Revenue		6,167.3	6,110.8
Cost of sales		(3,205.7)	(3,236.0)

Gross profit		2,961.6	2,874.8
Selling and distribution expenses - normal		(2,126.4)	(2,020.2)
Administrative expenses - normal		(381.2)	(348.6)
Administrative expenses - exceptional		(97.3)	(90.3)
Other operating income		28.3	10.9

Operating profit		385.0	426.6

Before exceptional items		482.3	516.9
Exceptional items	3	(97.3)	(90.3)

Operating profit		385.0	426.6
Financial income		1.5	1.7
Financial expenses		(62.5)	(79.8)

Profit before tax		324.0	348.5
Income tax expense		(94.8)	(97.8)

Profit for the period		229.2	250.7

Attributable to equity holders of the parent		224.3	246.1
Attributable to non-controlling interest		4.9	4.6

Basic earnings per ordinary share	4	23.05p	25.29p
Diluted earnings per ordinary share	4	23.05p	25.29p

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 30 January 2021

	52 weeks to 30 January 2021 £m	52 weeks to 1 February 2020 £m
Profit for the period	229.2	250.7
Other comprehensive income: Items that may be classified subsequently to the Consolidated Income Statement: Exchange differences on translation of foreign operations	(20.0)	(21.5)

Total other comprehensive income for the period	(20.0)	(21.5)

Total comprehensive income and expense for the period (net of income tax)	209.2	229.2

Attributable to equity holders of the parent	200.7	227.2
Attributable to non-controlling interest	8.5	2.0

Consolidated Statement of Financial Position

As at 30 January 2021

	As at 30 January 2021 £m	As at 1 February 2020 £m
Assets
Intangible assets	819.7	413.7
Property, plant and equipment	2,316.4	2,420.1
Other assets Investment in associate	63.2 2.7	47.9 2.6
Deferred tax assets	40.6	-
Total non-current assets	3,242.6	2,884.3

Inventories	813.7	811.8
Trade and other receivables	141.2	183.9
Cash and cash equivalents	964.4	465.9
Total current assets	1,919.3	1,461.6

Total assets	5,161.9	4,345.9

Liabilities
Interest-bearing loans and borrowings	(120.9)	(20.4)
Lease liabilities	(301.8)	(285.0)
Trade and other payables	(1,102.0)	(900.7)
Provisions	(0.7)	-
Income tax liabilities	(29.5)	(34.3)
Total current liabilities	(1,554.9)	(1,240.4)

Interest-bearing loans and borrowings	(48.1)	(15.6)
Lease liabilities	(1,628.0)	(1,707.7)
Other payables	(374.4)	(80.5)
Provisions	(5.1)	-
Deferred tax liabilities	(55.0)	(12.5)
Total non-current liabilities	(2,110.6)	(1,816.3)

Total liabilities	(3,665.5)	(3,056.7)

Total assets less total liabilities	1,496.4	1,289.2

Capital and reserves
Issued ordinary share capital	2.4	2.4
Share premium	11.7	11.7
Retained earnings	1,560.8	1,245.7
Other reserves	(336.2)	(40.6)

Total equity attributable to equity holders of the parent	1,238.7	1,219.2
Non-controlling interest	257.7	70.0

Total equity	1,496.4	1,289.2

Consolidated Statement of Changes in Equity

For the 52 weeks ended 30 January 2021

	Ordinary Share Capital £m		Share Premium £m	Retained Earnings £m	Other Equity £m	Foreign Currency Translation Reserve £m	Total Equity Attributable to Equity Holders of The Parent £m

Balance at 2 February 2019		2.4	11.7	1,016.3	(36.3)	14.7	1,008.8

Profit for the period		-	-	246.1	-	-	246.1

Other comprehensive income:
Exchange differences on translation of foreign operations		-	-	-	-	(18.9)	(18.9)
Total other comprehensive income		-	-	-	-	(18.9)	(18.9)

Total comprehensive income for the period		-	-	246.1	-	(18.9)	227.2
Dividends to equity holders		-	-	(16.7)	-	-	(16.7)
Put options held by non-controlling interest		-	-	-	(0.1)	-	(0.1)

Balance at 1 February 2020		2.4	11.7	1,245.7	(36.4)	(4.2)	1,219.2

Profit for the period		-	-	224.3	-	-	224.3

Other comprehensive income:
Exchange differences on translation of foreign operations		-	-	-	-	(23.6)	(23.6)
Total other comprehensive income		-	-	-	-	(23.6)	(23.6)

Total comprehensive income for the period		-	-	224.3	-	(23.6)	200.7
Dividends to equity holders		-	-	-	-	-	-
Put options held by non-controlling interest		-	-	-	(272.0)	-	(272.0)
Acquisition of non-controlling interest		-	-	(3.7)	-	-	(3.7)
Divestment of non-controlling interest		-	-	94.5	-	-	94.5
Non-controlling interest arising on acquisition		-	-	-	-	-	-
Non-controlling interest share capital issued		-	-	-	-	-	-

Balance at 30 January 2021		2.4	11.7	1,560.8	(308.4)	(27.8)	1,238.7

Consolidated Statement of Changes in Equity (continued)

For the 52 weeks ended 30 January 2021

	Total Equity Attributable to Equity Holders of The Parent £m		Non-Controlling Interest £m	Total Equity £m

Balance at 2 February 2019		1,008.8	68.0	1,076.8

Profit for the period		246.1	4.6	250.7

Other comprehensive income:
Exchange differences on translation of foreign operations		(18.9)	(2.6)	(21.5)
Total other comprehensive income		(18.9)	(2.6)	(21.5)

Total comprehensive income for the period		227.2	2.0	229.2
Dividends to equity holders		(16.7)	(1.3)	(18.0)
Put options held by non-controlling interest		(0.1)	-	(0.1)
Non-controlling interest arising on acquisition		-	1.3	1.3

Balance at 1 February 2020		1,219.2	70.0	1,289.2

Profit for the period		224.3	4.9	229.2

Other comprehensive income:
Exchange differences on translation of foreign operations		(23.6)	3.6	(20.0)
Total other comprehensive income		(23.6)	3.6	(20.0)

Total comprehensive income for the period		200.7	8.5	209.2
Dividends to equity holders		-	(1.2)	(1.2)
Put options held by non-controlling interest		(272.0)	-	(272.0)
Acquisition of non-controlling interest		(3.7)	(1.7)	(5.4)
Divestment of non-controlling interest		94.5	181.4	275.9
Non-controlling interest arising on acquisition		-	0.4	0.4
Non-controlling interest share capital issued		-	0.3	0.3

Balance at 30 January 2021		1,238.7	257.7	1,496.4

Consolidated Statement of Cash Flows

For the 52 weeks ended 30 January 2021

	52 weeks to 30 January 2021 £m	52 weeks to 1 February 2020 £m
Cash flows from operating activities
Profit for the period	229.2	250.7
Income tax expense	94.8	97.8
Financial expenses	62.5	79.8
Financial income	(1.5)	(1.7)
Depreciation and amortisation of non-current assets	499.2	450.0
Forex losses on monetary assets and liabilities	3.6	9.9
Impairment of other intangibles and non-current assets	8.7	12.9
Loss on disposal of non-current assets	1.2	6.3
Other exceptional items	2.9	47.2
Impairment of goodwill and fascia names (exceptional)	89.5	43.1
Impairment of property, plant and equipment (exceptional)	4.9	-
Decrease / (increase) in inventories	63.5	(9.5)
Decrease / (increase) in trade and other receivables	46.2	(13.0)
Increase in trade and other payables	150.8	58.1
Interest paid	(7.6)	(7.9)
Lease interest	(54.9)	(71.9)
Income taxes paid	(130.4)	(97.8)
Net cash from operating activities	1,062.6	854.0

Cash flows from investing activities
Interest received	1.5	1.7
Proceeds from sale of non-current assets	2.1	3.1
Investment in software development	(19.1)	(23.2)
Acquisition of property, plant and equipment	(105.2)	(147.2)
Acquisition of non-current other assets	(7.7)	(6.8)
Acquisition of subsidiaries, net of cash acquired	(206.3)	(89.3)
Net cash used in investing activities	(334.7)	(261.7)

Cash flows from financing activities
Draw down / (repayment) of interest-bearing loans and borrowings	51.6	(88.6)
Repayment of lease liabilities	(285.2)	(264.8)
Subsidiary shares issued in the period	0.3	-
Acquisition and divestment of non-controlling interests	(5.2)	-
Equity dividends paid	-	(16.7)
Dividends paid to non-controlling interest in subsidiaries	(1.2)	(1.3)
Net cash used in financing activities	(239.7)	(371.4)
Net increase in cash and cash equivalents	488.2	220.9

Cash and cash equivalents at the beginning of the period	460.3	237.7
Foreign exchange gains on cash and cash equivalents	0.2	1.7
Cash and cash equivalents at the end of the period	948.7	460.3

Analysis of Net Cash

As at 30 January 2021

	At 1 February 2020 £m	On acquisition of subsidiaries £m	Cash flow £m	Non- cash movements £m		At 30 January 2021 £m

Cash at bank and in hand	465.9	3.3	495.0		0.2		964.4
Overdrafts	(5.6)	-	(10.1)		-		(15.7)

Cash and cash equivalents	460.3	3.3	484.9		0.2		948.7

Interest-bearing loans and borrowings:
Bank loans	(29.7)	(0.6)	(52.4)		(1.7)		(84.4)
Other loans	(0.7)	(73.1)	0.8		4.1		(68.9)

Net cash / (financial debt)	429.9	(70.4)	433.3		2.6		795.4

Lease liabilities	(1,992.7)	(143.2)	285.2		(79.1)		(1,929.8)

Net debt	(1,562.8)	(213.6)	718.5		(76.5)		(1,134.4)

1. Basis of Preparation

Adoption of New and Revised Standards

The Group continues to monitor the potential impact of new standards and interpretations which have been or may be endorsed and require adoption by the Group in future reporting periods.

Amendment to IFRS 16 'Leases' COVID-19 Related Rent Concessions

This amendment to IFRS16 provided an accounting policy choice for lessees where a COVID-19 related rent concession had been received or granted from a landlord. The Group has elected not to account for COVID-19 related rent concessions under the amendment effective from 1 June 2020. The Group instead continues to remeasure right of use assets and lease liabilities following the lease modification definitions within IFRS16 as originally issued, recalculating using a revised discount rate where applicable.

A number of new standards were also effective from 2 February 2020 but they do not have a material effect on the Group's financial statements. The Group does not consider that any other standards, amendments or interpretations issued by the IASB, but not yet applicable, will have a significant impact on the financial statements.

Alternative performance measures

The Directors measure the performance of the Group based on a range of financial measures, including measures not recognised by international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. These alternative performance measures may not be directly comparable with other companies' alternative performance measures and the Directors do not intend these to be a substitute for, or superior to, IFRS measures. The Directors believe that these alternative performance measures assist in providing additional useful information on the underlying performance of the Group. Alternative performance measures are also used to enhance the comparability of information between reporting periods, by adjusting for exceptional items, which could distort the understanding of the performance for the year. Further information can be found at the end of these results.

Use of estimates and judgements

The preparation of financial statements in conformity with adopted IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates disclosed below are those which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.

Footasylum Acquisition

The Competition and Markets Authority ('CMA') announced in its Final Report in May 2020 that it had decided to prohibit the merger with Footasylum and that, consequently, it required the Group to fully divest its investment. This decision was subsequently quashed on appeal in November 2020 by the Competition Appeal Tribunal ('CAT') who determined that the case should be passed back to the CMA for full reconsideration. Subsequently, the CMA have asked both the CAT and the Court of Appeal for leave to appeal the CAT's decision but, on each occasion, this has been refused. Accordingly, the merger with Footasylum will now be re-examined by the CMA, a process expected to take several months.

The continuation of the temporary store closures into the new financial year together with the reduction in the support available for local authority rates have inevitably had a negative impact on the expectations for the performance of Footasylum in the year to 29 January 2022. Further, there is inevitably considerable uncertainty as to whether levels of footfall into the Footasylum stores, which attract an older demographic than JD, will recover to historic levels which could adversely impact the longer-term viability of certain stores. As a consequence, the financial projections no longer support the carrying value of the fascia name and goodwill which arose on the acquisition in the year to 1 February 2020 with a charge of £55.6 million recognised in relation to the impairment of these assets.

Determination of the Fair Value of Assets and Liabilities on Acquisition

Included within critical accounting policies in the current year is the valuation of the intangible assets recognised as part of the acquisition of Shoe Palace. The estimates used in the valuation of the intangible assets are considered to have a significant risk of causing a material misstatement, specifically; the estimation of future cash flows, the useful economic life of the asset, the selection of suitable royalty relief rates and the selection of a suitable discount rate.

The key assumption used by management in the valuation of the fascia name was the royalty rate. The royalty rate assumption used in the valuation was estimated based on published comparable licence fees in the sports fashion market and a calculation of the expected return on assets of the Shoe Palace business. If the royalty rate used in the valuation was 1% higher or lower, this would lead to a change in the fascia name valuation of plus or minus £25.1 million. 1% was determined to be a reasonable royalty rate sensitivity by comparing the royalty rate used to publicly disclosed licensing transactions related to the retail of sportswear and footwear.

Impairment of Goodwill

Goodwill arising on acquisition is allocated to groups of cash-generating units that are expected to benefit from the synergies of the business combination from which goodwill arose. Goodwill is allocated to groups of cash-generating units, being portfolios of stores or individual businesses. The cash-generating units used to monitor goodwill and test it for impairment are therefore the store portfolios and individual businesses rather than individual stores, as the cash flows of individual stores are not considered to be independent. The recoverable amounts of these cash-generating units are determined based on value-in-use calculations. The use of this method requires the estimation of future cash flows expected to arise from the continuing operation of the cash-generating unit and the choice of a suitable discount rate in order to calculate the present value.

Impairment of Other Intangible Assets with Definite Lives

The Group is required to assess whether there is an indication that other intangible assets with a definite useful economic life have suffered any impairment. The recoverable amount of brand names is based on an estimation of future sales and the choice of a suitable royalty and discount rate in order to calculate the present value, when this method is deemed the most appropriate. The use of this method requires the estimation of future cash flows expected to arise from the continuing operation of the asset until the licence expiry date and the choice of a suitable discount rate in order to calculate the present value. Impairment losses are recognised in the Consolidated Income Statement.

Provisions to Write Inventories Down to Net Realisable Value

The Group makes provisions for obsolescence, mark downs and shrinkage based on historical experience, the quality of the current season buy, market trends and management estimates of future events. The provision requires estimates for shrinkage, the expected future selling price of items and identification of aged and obsolete items.

Valuation of Rolling Leases

In initially applying IFRS16 Leases, the Group has applied judgement to determine the lease term for certain lease contracts in which the Group is a lessee that either have no specified end date, or where the Group continues to occupy the property despite the contractual lease end date having passed. In determining the lease term, the Group takes into consideration its commercial strategy on a store by store basis and the future intentions of the Group regarding the duration of continuing occupation of the property. For lease contracts falling into these parameters, the associated lease liability is calculated at the present value of the minimum lease payments over the estimated lease term, discounted at the Group's incremental cost of borrowing. A corresponding right of use asset is also recognised.

Iberian Sports Retail Group Put Option

The Group holds Put Options over part of the remaining Non-Controlling Interest in Iberian Sport Retail Group and these options are required to be fair valued at each accounting period date. A valuation has been performed by management using an EBITDA multiple, a suitable discount rate and approved forecasts. The valuation is considerably higher than the previous year which is primarily due to an improved forecast trading performance.Sensitivity was performed over the key variable inputs to the valuation of the put option, being the discount rate and the approved forecasts. A discount rate increase of 1% would result in a reduction in the put option liability of £0.9 million and an increase of 1% to the forecasted EBITDA % would result in an increase in the put option liability of £0.6 million. 1% was determined to be a reasonable variance to demonstrate the sensitivity of the put option valuation to the key inputs used.

Other Accounting Estimates

Genesis Topco Put-Options

Following the acquisition of Shoe Palace, the Group now holds Put Options over 20% of the Non-Controlling Interest in the Genesis Topco sub-group. A valuation has been performed using an EBITDA multiple, a suitable discount rate and approved forecasts and the initial liability of £261.6 million has been recognised with the corresponding entry to Other Equity in accordance with the present access method of accounting. These options are required to be fair valued at each accounting period date. Given the proximity of the transaction to the reporting date, the estimation uncertainty as at the current reporting date is limited, however in future periods this estimation uncertainty will be significant. Sensitivity was performed over the key variable inputs to the valuation of the put options, being the discount rate and the approved forecasts. A discount rate increase of 1% would result in a reduction in the put option liability of £13.9 million and an increase of 1% to the forecasted EBITDA % would result in an increase in the put option liability of £14.7 million. 1% was determined to be a reasonable variance to demonstrate the sensitivity of the put option valuation to the key inputs used.

Going Concern

The global COVID-19 pandemic has presented a series of unprecedented challenges which have severely tested all aspects of our business including our multi-channel capabilities, the robustness of our operational infrastructure and the resilience of our colleagues. Whilst COVID-19 has inevitably constrained our short term progress, we firmly believe that we have a robust premium branded multichannel proposition with our loyal consumers comfortable engaging with us in any channel.

The financial statements are prepared on a going concern basis, which the Directors believe to be appropriate for the following reasons.

At 30 January 2021, the Group had net cash balances of £795.4 million (2020: £429.9 million) with available committed UK borrowing facilities of £700 million (2020: £700 million) of which £nil (2020: £ nil) has been drawn down and US facilities of approximately $300 million of which $nil was drawn down (2020: $nil). These facilities are subject to certain covenants. With a UK facility of £700 million available up to 6 November 2024 and a US facility of approximately $300 million available up until 18 June 2023, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook.

Since the year end, the Company completed the placing of new ordinary shares in the capital of the Company raising gross proceeds of approximately £456.0 million after costs. In addition, the Group has completed acquisitions in the new year to date with aggregate cash consideration paid of approximately £380 million. The Group had net cash of £709.5 million as at 6 April 2021.

The Directors have prepared cash flow forecasts for the Group covering a period of at least 12 months from the date of approval of the financial statements, which indicate that the Group will be able to operate within the level of its agreed facilities and covenant compliance. These forecasts include a number of assumptions including gross profit margins and the response of customers to transition from physical sales to online and vice versa as lockdown restrictions ease. For the purposes of both Viability and Going Concern Reporting, the Directors have prepared severe but plausible downside scenarios which cover the same period as the base case, including specific consideration of a range of impacts that could arise from the continued COVID-19 pandemic. These scenarios included more prolonged store closures, transition from physical sales to online and disruptions to supply chain causing delays in receiving stock. As part of this analysis, mitigating actions within the Group's control should these severe but plausible scenarios occur have also been considered. These forecast cash flows indicate that there remains sufficient headroom for the Group to operate within the committed facilities and to comply with all relevant banking covenants during the forecast period.

The Directors have considered all of the factors noted above, including the inherent uncertainty in forecasting the impact of the COVID-19 pandemic, and are confident that the Group has adequate resources to continue to meet all liabilities as and when they fall due for a period of at least 12 months from the date of approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.

2. Segmental analysis

IFRS 8 'Operating Segments' requires the Group's segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker to allocate resources to the segments and to assess their performance. The Chief Operating Decision Maker is considered to be the Executive Chairman of JD Sports Fashion Plc.

Information reported to the Chief Operating Decision Maker is focussed on the nature of the businesses within the Group. The Group's operating and reportable segments under IFRS 8 are therefore Sports Fashion and Outdoor.

The Chief Operating Decision Maker receives and reviews segmental operating profit. Certain central administrative costs including Group Directors' salaries are included within the Group's core Sports Fashion result. This is consistent with the results as reported to the Chief Operating Decision Maker.

IFRS 8 requires disclosure of information regarding revenue from major products and customers. The majority of the Group's revenue is derived from the retail of a wide range of apparel, footwear and accessories to the general public. As such, the disclosure of revenues from major customers is not appropriate. Disclosure of revenue from major product groups is not provided at this time due to the cost involved to develop a reliable product split on a same category basis across all companies in the Group.

Intersegment transactions are undertaken in the ordinary course of business on arm's length terms.

The Board consider that certain items are cross divisional in nature and cannot be allocated between the segments on a meaningful basis. Net funding costs and taxation are treated as unallocated reflecting the nature of the Group's syndicated borrowing facilities and its tax group. A deferred tax asset of £40.6 million and a deferred tax liability of £55.0 million (2020: net liability of £12.5 million) and an income tax liability of £29.5 million (2020: £34.3 million) are included within the unallocated segment.

Each segment is shown net of intercompany transactions and balances within that segment. The eliminations remove intercompany transactions and balances between different segments which primarily relate to the net down of long term loans and short term working capital funding provided by JD Sports Fashion Plc (within Sports Fashion) to other companies in the Group, and intercompany trading between companies in different segments.

Business segments

Information regarding the Group's reportable operating segments for the 52 weeks to 30 January 2021 is shown below:

Income statement
	Sports Fashion £m	Outdoor £m	Unallocated £m	Total £m

Gross revenue	5,808.2	359.1	-	6,167.3
Intersegment revenue	(0.2)	0.2	-	-
Revenue	5,808.0	359.3	-	6,167.3

Gross profit %	48.4%	42.2%	-	48.0%
Operating profit / (loss) before exceptional items	484.7	(2.4)	-	482.3
Exceptional items	(76.9)	(20.4)	-	(97.3)

Operating profit / (loss)	407.8	(22.8)	-	385.0
Financial income	-	-	1.5	1.5
Financial expenses	(51.2)	(3.7)	(7.6)	(62.5)

Profit / (loss) before tax	356.6	(26.5)	(6.1)	324.0
Income tax expense				(94.8)

Profit for the period				229.2


Total assets and liabilities
	Sports Fashion £m	Outdoor £m	Unallocated £m	Eliminations £m	Total £m

Total assets	4,940.2	293.2	40.6	(112.1)	5,161.9
Total liabilities	(3,420.3)	(272.8)	(84.5)	112.1	(3,665.5)
Total segment net assets / (liabilities)	1,519.9	20.4	(43.9)	-	1,496.4

Other segment information
	Sports Fashion £m	Outdoor £m	Total £m
Capital expenditure:
Software development	19.1	-	19.1
Property, plant and equipment	102.1	3.1	105.2
Right of use assets	168.3	46.6	214.9
Non-current other assets	7.7	-	7.7

Depreciation, amortisation and impairments:
Depreciation and amortisation of non-current assets	161.8	16.0	177.8
Depreciation and amortisation of right of use assets	301.5	19.9	321.4
Impairment of intangible assets (exceptional items)	56.2	33.3	89.5
Impairment of non-current assets (exceptional items)	-	4.9	4.9
Impairment of non-current assets (non-exceptional items)	4.9	0.4	5.3
Impairment of right of use assets (non-exceptional items)	2.4	1.0	3.4

The comparative segmental results for the 52 weeks to 1 February 2020 are as follows:

Income statement
	Sports Fashion £m	Outdoor £m	Unallocated £m	Total £m

Gross revenue	5,696.8	414.0	-	6,110.8
Intersegment revenue	-	-	-	-
Revenue	5,696.8	414.0	-	6,110.8

Gross profit %	47.4%	41.9%	-	47.0%
Operating profit / (loss) before exceptional items	533.2	(16.3)	-	516.9
Exceptional items	(40.6)	(49.7)	-	(90.3)

Operating profit / (loss)	492.6	(66.0)	-	426.6
Financial income	-	-	1.7	1.7
Financial expenses	(64.7)	(7.2)	(7.9)	(79.8)

Profit / (loss) before tax	427.9	(73.2)	(6.2)	348.5
Income tax expense				(97.8)

Profit for the period				250.7

Total assets and liabilities

Sports Fashion

£m

Outdoor

£m

Unallocated

£m

Eliminations

£m

Total

£m

Total assets

4,047.7

411.7

(113.5)

4,345.9

Total liabilities

(2,723.5)

(393.9)

(52.8)

113.5

(3,056.7)

Total segment net assets / (liabilities)

1,324.2

17.8

(52.8)

1,289.2

Other segment information
	Sports Fashion £m	Outdoor £m	Total £m
Capital expenditure:
Software development	23.2	-	23.2
Property, plant and equipment	138.4	8.8	147.2
Right of use assets	408.5	9.6	418.1
Non-current other assets	6.8	-	6.8

Depreciation, amortisation and impairments:
Depreciation and amortisation of non-current assets	132.3	14.4	146.7
Depreciation and amortisation of right of use assets	274.9	28.4	303.3
Impairment of intangible assets (exceptional items)	0.6	42.5	43.1
Impairment of non-current assets (non-exceptional items)	5.0	-	5.0
Impairment of right of use assets (non-exceptional items)	7.0	0.8	7.8

Geographical Information

The Group's operations are located in the UK, Australia, Austria, Belgium, Canada, Denmark, Dubai, Finland, France, Germany, Hong Kong, India, Italy, Malaysia, the Netherlands, New Zealand, Portugal, Republic of Ireland, Singapore, South Korea, Spain and the Canary Islands, Sweden, Thailand and the United States of America.

The following table provides analysis of the Group's revenue by geographical market, irrespective of the origin of the goods / services:

	2021 £m	2020 £m

UK	2,527.0	2,599.2
Europe	1,579.4	1,619.2
United States	1,780.5	1,611.0
Rest of world	280.4	281.4

	6,167.3	6,110.8

The revenue from any individual country, with the exception of the UK & US, is not more than 10% of the Group's total revenue.

The following is an analysis of the carrying amount of segmental non-current assets by the geographical area in which the assets are located:

	2021 £m	2020 £m

UK	1,011.0	1,296.2
Europe	1,003.4	979.2
United States	1,078.6	497.4
Rest of world	109.0	111.5
Unallocated	40.6	-

	3,242.6	2,884.3

Taxation is treated as unallocated reflecting the nature of the Group's tax group.

3. Exceptional items

	52 weeks to 30 January 2021 £m	52 weeks to 1 February 2020 £m

Impairment of goodwill and fascia names (1)	56.2	43.1
Movement in fair value of put and call options (2)	20.7	31.4
Restructuring of Go Outdoors (3)	20.4	-
Integration of Outdoor systems and warehousing (4)	-	7.2
Integration of Sport Zone into Sprinter infrastructure (5)	-	8.6
Administrative expenses - exceptional	97.3	90.3

Total exceptional items	97.3	90.3

(1) The impairment in the current period principally constitutes a charge of £55.6 million relating to the impairment of the goodwill and fascia name arising in prior years on the acquisition of Footasylum. The impairment in the prior period relates to the impairment of the goodwill arising in prior years on the acquisition of Go Outdoors Topco Limited and Choice Limited.

(2) Movement in the fair value of the liabilities in respect of the put and call options.

(3) The net impact consequent to the restructuring of Go Outdoors in the period including a charge of £33.3 million in relation to the impairment of intangible assets, a charge of £4.9 million in relation to the impairment of leasehold improvements and a credit of £17.8 million in relation to the extinguishment of lease commitments.

(4) Costs arising from the integration and consolidation of the principal IT systems, warehousing and other infrastructure in Go Outdoors.

(5) Costs associated with transferring the stocks and other operations of Sport Zone into the Sprinter infrastructure.

Items (1) and (2) are exceptional items as they are considered unusual in nature and not reflective of the underlying trading and profitability of the Group. Items (3), (4) and (5) are presented as an exceptional item as these costs relate to one off projects.

4. Earnings per ordinary share

Basic and diluted earnings per ordinary share

The calculation of basic and diluted earnings per ordinary share at 30 January 2021 is based on the profit for the period attributable to equity holders of the parent of £224.3 million (2020: £246.1 million) and a weighted average number of ordinary shares outstanding during the 52 week period ended 30 January 2021 of 973,233,160 (2020: 973,233,160).

	52 weeks to 30 January 2021	52 weeks to 1 February 2020


Issued ordinary shares at beginning and end of period	973,233,160	973,233,160

Adjusted basic and diluted earnings per ordinary share

Adjusted basic and diluted earnings per ordinary share have been based on the profit for the period attributable to equity holders of the parent for each financial period but excluding the post-tax effect of certain exceptional items. The Directors consider that this gives a more useful measure of the underlying performance of the Group.

	Note	52 weeks to 30 January 2021 £m	52 weeks to 1 February 2020 £m

Profit for the period attributable to equity holders of the parent		224.3	246.1
Exceptional items excluding loss on disposal of non-current assets	3	97.3	90.3
Tax relating to exceptional items		(8.3)	(3.0)
Profit for the period attributable to equity holders of the parent excluding exceptional items		313.3	333.4

Basic and diluted earnings per ordinary share		23.05p	25.29p

Adjusted basic and diluted earnings per ordinary share

32.19p

34.26p

5. Acquisitions

Current period acquisitions

Onepointfive Ventures Limited trading as Livestock ('Livestock')

On 10 February 2020, the Group acquired 100% of the issued share capital of Onepointfive Ventures Limited DBA Livestock ('Livestock') through a newly established Canadian holding company (JDSF Holdings (Canada) Inc.) ('Holdco'). Based in Vancouver, this business and its management will provide the platform to develop JD Group fascias in Canada.

Consideration was comprised of £7.0 million in cash, of which £0.6m is deferred, plus 20% of the equity in Holdco. The fair value of the 20% equity in Holdco was £1.8 million.

Included within the fair value of the net identifiable assets on acquisition is an intangible asset of £1.2 million, representing the 'Livestock' fascia name. The Board believes that the excess of consideration paid over net assets on acquisition of £8.4 million is best considered as goodwill on acquisition representing future operating synergies. The goodwill calculation is summarised below:

	Book value £m	Measurement adjustments £m	Fair value at 10 February 2020 £m
Acquiree's net assets at acquisition date:
Intangible assets	-	1.2	1.2
Property, plant & equipment	0.5	-	0.5
Right of use assets	0.5	-	0.5
Inventories	0.5	-	0.5
Cash and cash equivalents	(0.8)	-	(0.8)
Trade and other receivables	0.1	-	0.1
Trade and other payables	(0.5)	-	(0.5)
Deferred tax liability	-	(0.3)	(0.3)
Lease liabilities	(0.5)	-	(0.5)
Corporation tax	(0.3)	-	(0.3)
Net identifiable (liabilities) / assets	(0.5)	0.9	0.4

Goodwill on acquisition			8.4
Consideration - satisfied in cash Consideration - fair value of shares issued Consideration - deferred			6.4 1.8 0.6
Total consideration			8.8

Included in the 52 week period ended 30 January 2021 is revenue of £10.1 million and a profit before tax of £1.4 million in respect of Livestock.

X4LGyms Limited

On 22 July 2020, X4L Gyms Limited, a 100% owned subsidiary of JD Gyms Limited acquired certain assets of Wright Leisure Limited t/a Xercise4less following the Group being placed into administration on the same date.

Xercise4less is a UK-based value-gym chain with 50 operational clubs at the date of administration. The company offers high-quality, low-cost contract and non-contract memberships to its members from large operational facilities nationwide.

The Board believes that Xercise4Less further strengthens the Group's presence in the growing UK fitness market with the acquisition providing immediate reach to a wider membership base as well as facilitating the Group's presence as a key player in the market. Xercise4less is a well-established business with a wealth of knowledge in the UK fitness market which the board believes will be complementary to JD. The Board also believes that there will be significant operational and strategic benefits from a combination of the two businesses.

The Board believes the excess of cash consideration paid over the net identifiable assets on acquisition of £14.2 million is best considered as goodwill representing future operating synergies.

The goodwill calculation is summarised below:	Book value £m	Measurement adjustments £m	Fair value at 22 July 2020 £m
Acquiree's net assets at acquisition date:
Intangible assets	16.3	(16.1)	0.2
Property, plant & equipment	7.8	4.4	12.2
Trade and other receivables	0.1	(0.1)	-
Trade and other payables Deferred tax liability	- -	(1.5) (0.9)	(1.5) (0.9)
Net identifiable assets	24.2	(14.2)	10.0

Goodwill on acquisition			14.2
Consideration paid - satisfied in cash			24.2

Included in the 52 week period ended 30 January 2021 is revenue of £8.1 million and a loss before tax of £3.3 million in respect of X4L Gyms Limited.

Shoe Palace Corporation and Nice Kicks LLC

On 14 December 2020, JD Sports Fashion Plc's wholly owned intermediate holding company in the United States, Genesis Holdings, acquired 100% of the issued shares in both the Shoe Palace Corporation and the members' interests in Nice Kicks LLC (together 'Shoe Palace').

Shoe Palace has an established retail presence in California, Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii with 163 stores trading under the Shoe Palace fascia and four stores trading as Nice Kicks.

Total consideration for the acquisition was $672.9 million, comprising $316.7 million of cash consideration (of which $100 million has been deferred and will be paid on various dates through 2021) and $356.2 million, being the initial fair value of this equity in the enlarged group in the United States calculated using an EBITDA multiple and approved forecasts. Additionally, several put and call options, to enable future exit opportunities for the minority interest have also been agreed, which commence after the end of the financial year to 1 February 2025. A valuation of these put options has been performed using an EBITDA multiple, a suitable discount rate and approved forecasts and the initial liability of £261.6 million has been recognised with the corresponding entry to Other Equity in accordance with the present access method of accounting. These options are required to be fair valued at each accounting period date.

Included within the provisional fair value of the net identifiable assets on acquisition is an intangible asset of £105.6 million, representing the 'Shoe Palace' fascia name and an intangible asset of £1.2 million, representing the 'Nice Kicks' fascia name. The Board believes that the excess of consideration paid over net assets on acquisition of £408.2 million is best considered as goodwill on acquisition representing future operating synergies. Due to the proximity of the date of the acquisition and the financial period end, it has not been possible to present a final goodwill calculation or the final fair values of the assets and liabilities acquired. The provisional goodwill calculation is summarised below:

	Book value £m	Measurement adjustments £m	Provisional fair value at 14 December 2020 £m
Acquiree's net assets at acquisition date:
Intangible assets	0.2	106.8	107.0
Property, plant & equipment	22.7	2.9	25.6
Right of use assets	139.8	-	139.8
Other non-current assets	0.6	-	0.6
Inventories	49.7	5.0	54.7
Cash and cash equivalents	3.1	-	3.1
Bank loans and overdrafts	(1.7)	-	(1.7)
Trade and other receivables	10.6	-	10.6
Trade and other payables - current	(64.2)	6.4	(57.8)
Trade and other payables - non-current	(9.5)	9.5	-
Deferred tax liability	-	(32.7)	(32.7)
Lease liabilities	(139.8)	-	(139.8)
Net identifiable assets	11.5	97.9	109.4

Goodwill on acquisition			408.2
Consideration - satisfied in cash Consideration - fair value of shares issued Consideration - deferred			170.4 274.1 73.1
Total consideration			517.6

Included in the 52 week period ended 30 January 2021 is revenue of £56.1 million and a profit before tax of £13.9 million in respect of Shoe Palace.

A Number of Names Limited

On 23 December 2020, the Group acquired 100% of the issued share capital of A Number of Names Limited ('ANON'). ANON is primarily a wholesale business with the licence to the Billionaire Boys Club ('BBC') brand in the UK, Europe, Middle East, Africa, Russia, Ukraine, Australia, Canada and certain other territories.

Due to the proximity of the date of the acquisition and the financial period end, it has not been possible to finalise the goodwill calculation or the fair values of the assets and liabilities acquired. The total provisional fair value of consideration recognised at 23 December 2020 was £4.8 million comprising £3.3 million of cash consideration and £1.5 million of deferred consideration that is contingent on ANON meeting certain performance criteria. £1.5 million was deemed to be the provisional fair value of the deferred consideration based on management's judgement and best estimates as at 23 December 2020.

The Board believes the provisional excess of consideration over the net assets acquired of £1.9 million is best considered as goodwill on acquisition representing future operating synergies.

Included in the 52 week period ended 30 January 2021 is revenue of £0.2 million and a break even result before tax in respect of A Number of Names Limited.

Other acquisitions

During the period, the Group made several small acquisitions. These transactions were not material.

Full year impact of acquisitions

Had the acquisitions of the entities listed above been effected at 2 February 2020, the revenue and profit before tax of the Group for the 52 week period to 30 January 2021 would have been £6.5 billion and £334.9 million respectively.

Acquisition costs

Acquisition related costs amounting to £4.0 million have been excluded from the consideration transferred and have been recognised as an expense in the year, within administrative expenses in the Consolidated Income Statement.

Prior period acquisitions

Footasylum Plc ('Footasylum')

On 18 February 2019, JD Sports Fashion Plc acquired 19,579,964 Footasylum Plc shares at prices between 50 pence and 75 pence per share, representing 18.7% of the issued ordinary share capital. On 18 March 2019, in conjunction with the board of Footasylum Plc, JD Sports Fashion Plc announced the terms of an offer to be made for the remaining 81.3% of the ordinary share capital of Footasylum at a price of 82.5 pence per ordinary share. This offer was declared unconditional in all respects on 12 April 2019 with acceptances received for a total of 78,176,481 shares representing a further 74.8% of the issued ordinary share capital. On 26 April 2019, the first bulk transfer was made to acquire an additional 80.5 million shares (in addition to the 19.5 million already owned). The formal process to acquire the remaining Footasylum shares (incl. the dissenting shareholders) was completed on 4 June 2019. Footasylum was delisted on 16 May 2019 and converted from an unlisted Plc to a private company on 19 September 2019.

Footasylum is a UK-based fashion retailer founded in 2005 focusing on the footwear and apparel market. The company operates a multichannel model which combined a store estate of 69 stores on acquisition in a variety of high street, mall and retail park locations in cities and towns throughout Great Britain, complemented by an online platform and a wholesale arm for distributing its own brand ranges via a network of partners.

The Board believes that Footasylum is a well-established business with a strong reputation for lifestyle fashion and, with its offering targeted at a slightly older consumer to JD's existing offering, it is complementary to JD. The Board also believes that there will be significant operational and strategic benefits from a combination of the two businesses.

Included within the fair value of the net identifiable assets on acquisition was an intangible asset of £34.3 million representing the Footasylum fascia name and an intangible asset of £3.0 million for Footasylum exclusive brands. No measurement adjustments have been made to the fair value during the 52 week period ended 30 January 2021 and the period in which measurement adjustments could be made has now closed on this acquisition. The Board believed the excess of cash consideration paid over the net identifiable assets on acquisition of £27.3 million was best considered as goodwill representing future operating synergies. The carrying value of the goodwill and fascia name has been impaired in full in the financial year ended 30 January 2021 (See Note 1 for further details).

	Book value £m	Measurement adjustments £m	Fair value as at 12 April 2019 £m
Acquiree's net assets at acquisition date:
Intangible assets	-	37.3	37.3
Property, plant & equipment	29.1	(3.5)	25.6
Right of use assets	100.4	-	100.4
Inventories	39.6	-	39.6
Cash and cash equivalents	5.7	-	5.7
Trade and other receivables	19.4	-	19.4
Deferred tax asset / (liability)	0.2	(6.3)	(6.1)
Trade and other payables - current	(42.0)	-	(42.0)
Trade and other payables - non-current	(0.2)	-	(0.2)
Lease liabilities	(107.5)	-	(107.5)
Interest bearing loans and borrowings	(13.5)	-	(13.5)
Net identifiable assets	31.2	27.5	58.7

Goodwill on acquisition			27.3
Consideration paid - satisfied in cash			86.0

Given that this transaction is being reviewed by the Competition and Markets Authority ('CMA'), the Directors of the Company have had to assess whether or not the Group had control over Footasylum. In making their judgement, the Board considered the Group's ability to direct the relevant activities of Footasylum during the investigation period. Ultimately, after careful consideration, the Board concluded that the Group had control and, accordingly, Footasylum should be consolidated from the date of acquisition.

Included within the 52 week period ended 1 February 2020 is revenue of £215.9 million and a profit before tax of £1.7 million in respect of Footasylum.

Rascal Clothing Limited

On 5 February 2019, the Group acquired 50% of the issued share capital of Rascal Clothing Limited ('Rascal') for cash consideration of £2.5 million with additional consideration of up to £1.0 million payable if certain performance criteria were achieved. Rascal is a wholesaler and online retailer of sports inspired leisurewear. At acquisition, management believed that Rascal was on course to meet the performance criteria for the maximum contingent consideration to be payable and therefore the fair value of the contingent consideration at this time was £1.0 million.

The Group has the ability to direct the relevant activities of Rascal Clothing and there are restrictions on the existing shareholders via a shareholder agreement. Accordingly, the Board have concluded that the Group has control and that Rascal Clothing should be consolidated from the date of acquisition.

The Board believes that the excess of consideration paid over the net assets on acquisition of £2.2 million is best considered as goodwill on acquisition representing future operating synergies. No measurement adjustments have been made to the fair value during the 52 week period ended 30 January 2021 and the period in which measurement adjustments could be made has now closed on this acquisition.

Included within the 52 week period ended 1 February 2020 is revenue of £4.4 million and a profit before tax of £0.6 million in respect of Rascal Clothing Limited.

PG2019 Limited ('Pretty Green')

On 4 April 2019, the Group acquired, via its 100% subsidiary PG2019 Limited, the trading assets and trade of Pretty Green Limited (in administration), the boutique men's clothing brand, from its administrator. The acquisition included the business, brand, website and wholesale business as well as a flagship store in Manchester. Cash consideration of £1.5 million was paid on completion with the Group also assuming a further £1.8 million of debt.

Included within the fair value of the net identifiable assets on acquisition is an intangible asset of £1.0 million representing the Pretty Green fascia name and an intangible asset of £0.7 million representing the Pretty Green brand name. The Board believes the excess of cash consideration paid over the net identifiable assets on acquisition of £2.7 million is best considered as goodwill representing future operating synergies. No measurement adjustments have been made to the fair value during the 52 week period ended 30 January 2021 and the period in which measurement adjustments could be made has now closed on this acquisition.

Included within the 52 week period ended 1 February 2020 is revenue of £13.5 million and a profit before tax of £1.7 million in respect of PG2019 Limited.

Giulio Fashion Limited

On 30 April 2019, the Group acquired 80% of the issued share capital of Giulio Fashion Limited including two wholly owned subsidiaries, Giulio Limited (a trading company) and Giulio Woman Limited (a dormant company) for cash consideration of £3.0 million. The acquisition included put and call options over the remaining stores exercisable after three years.

The Board believes the excess of cash consideration paid over the net identifiable assets on acquisition of £2.7 million is best considered as goodwill representing future operating synergies. No measurement adjustments have been made to the fair value during the 52 week period ended 30 January 2021 and the period in which measurement adjustments could be made has now closed on this acquisition.

Included within the 52 week period ended 1 February 2020 is revenue of £5.6 million and a profit before tax of £0.2 million in respect of Giulio Fashion Limited.

Other acquisitions

During the prior period, the Group made several small acquisitions. These transactions were not material.

Full year impact of acquisitions

Had the acquisitions of the entities listed above been effected at 3 February 2019, the revenue and profit before tax of the Group for the 52 week period to 1 February 2020 would have been £6.2 billion and £349.2 million respectively.

Acquisition costs

Acquisition related costs amounting to £7.4 million (Footasylum Plc, £7.3 million, other acquisitions £0.1 million) have been excluded from the consideration transferred and have been recognised as an expense in the year, within administrative expenses in the Consolidated Income Statement.

6. Subsequent Events

DTLR Villa LLC ('DTLR')

On 31 January 2021, JD Sports Fashion Plc entered into a conditional agreement for the acquisition of 100% of DTLR Villa LLC ('DTLR' or 'Company'). Completion of the acquisition was subject to customary closing conditions, including expiration or termination of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). The acquisition subsequently completed on 17 March 2021.

Total cash consideration for the acquisition was $495 million, subject to customary working capital and other adjustments at completion, of which approximately $100 million will be used to repay existing indebtedness of the Company. This cash consideration is being funded from the Group's cash resources and existing bank facilities. The DTLR Management Team ('Management'), headed up by Glenn Gaynor and Scott Collins, who will be continuing in their roles as Co-CEOs, have also reinvested a portion of their proceeds back into DTLR in exchange for a new minority stake of approximately 1.4%. Put and call options, to enable future exit opportunities for Management, have also been agreed and become exercisable after a minimum period of three years.

DTLR is based in Baltimore, Maryland and is a hyperlocal athletic footwear and apparel streetwear retailer. Originally named Downtown Locker Room, the Company later re-branded as DTLR and, in 2017, merged with Sneaker Villa Inc (previously based in Philadelphia). At acquisition, DTLR operated from 247 stores across 19 states, principally in the North and East of the United States. The acquisition of DTLR, with its differentiated consumer proposition, will enhance the Group's presence in the north and east of the United States complementing not only our existing JD and Finish Line fascias but also the recent acquisition of Shoe Palace which is based on the West Coast.

Due to the proximity of the date of the acquisition and the date of this announcement, it is not possible to present a provisional goodwill calculation, or the provisional fair values of the assets and liabilities acquired. The goodwill calculation and fair value table will be presented in the announcement of our Interim Results on the 14 September 2021.

Placing of New Ordinary Shares

On 3 February 2021, JD Sports Fashion Plc ('the Company') completed the placing of new ordinary shares in the capital of the Company. A total of 58,393,989 new ordinary shares in the capital of the Company were placed by Investec Bank plc and Peel Hunt LLP at an issue price of 795 pence per share (the 'Placing Price').

The Placing Shares represent approximately 6.0 per cent of the existing issued share capital of the Company and raised gross proceeds of approximately £456.0 million after costs. The Placing Price represents a discount of approximately 2.5 per cent to the mid-market closing price of 815 pence on 3 February 2021. The Placing was implemented on a non-pre-emptive basis.

The admission of the Placing Shares to trading on the main market for listed securities took place on the 8 February 2021. The Placing Shares rank pari passu in all respects with each other and with the existing issued Ordinary Shares. This includes, without limitations, the right to receive all dividends and other distributions declared or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

The Company now has a total of 1,031,627,149 Ordinary Shares in issue. The Company does not hold any shares in treasury and the total number of voting shares in issue is therefore 1,031,627,149.

Marketing Investment Group S.A. ('MIG')

On 11 March 2021, JD Sports Fashion Plc entered into a conditional agreement for the acquisition of 60% of the share capital of Marketing Investment Group S.A. The business operates 410 retail stores and associated trading websites across nine countries in Central and Eastern Europe. In the year ended 31 January 2020, MIG generated revenues of approximately £200 million (£stg equivalent). The estimated date of completion of the acquisition is May 2021 subject to customary closing conditions and competition clearance.

The net assets of MIG at the date of completion are expected to be approximately £15 million. Put and call options to enable future exit opportunities for the 40% shareholders have also been agreed and become exercisable after the year ended January 2025.

7. Accounts

The financial information set out above does not constitute the Group's statutory accounts for the 52 weeks ended 30 January 2021 or 52 weeks ended 1 February 2020 but is derived from those accounts. Statutory accounts for the 52 weeks ended 1 February 2020 have been delivered to the Registrar of Companies, and those for the 52 weeks to 30 January 2021 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Copies of full accounts will be sent to shareholders in due course. Additional copies will be available from JD Sports Fashion Plc, Hollinsbrook Way, Pilsworth, Bury, Lancashire, BL9 8RR or online at www.jdplc.com

Alternative Performance Measures (terms listed in alphabetical order)

The Directors measure the performance of the Group based on a range of financial measures, including measures not recognised by international financial reporting standards ('IFRS') adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. These alternative performance measures may not be directly comparable with other companies' alternative performance measures and the Directors do not intend these to be a substitute for, or superior to, IFRS measures. The Directors believe that these alternative performance measures assist in providing additional useful information on the underlying performance of the Group.

Alternative Performance Measures are also used to enhance the comparability of information between reporting periods, by adjusting for exceptional items. Exceptional items are disclosed separately as they are considered unusual in nature and not reflective of the underlying trading and profitability of the Group. The separate reporting of exceptional items, which are presented as exceptional within the relevant category in the Consolidated Income Statement, helps provide an indication of the Group's underlying business performance.

Adjusted earnings per share

The calculation of basic earnings per share is detailed in Note 4. Adjusted basic earnings per ordinary share has been based on the profit for the period attributable to equity holders of the parent for each financial period but excluding the post-tax effect of certain exceptional items. A reconciliation between basic earnings per share and adjusted earnings per share is shown below:

	2021	2020
Basic earnings per share	23.05p	25.29p
Exceptional items excluding loss on disposal of non-current assets	10.00p	9.27p
Tax relating to exceptional items	(0.86)p	(0.30)p

Adjusted earnings per ordinary share	32.19p	34.26p

Core

The Group's core Sports Fashion fascia is JD and the Group's core market is the UK and Republic of Ireland.

EBITDA before exceptional items

Earnings before interest, tax, depreciation and amortisation.

	2021 £m	2020 £m
Profit for the period	229.2	250.7
Addback:
Financial expenses	62.5	79.8
Income tax expense	94.8	97.8
Depreciation, amortisation and impairment of non-current assets	507.9	462.9
Exceptional items	97.3	90.3
Deduct:
Financial income	(1.5)	(1.7)

EBITDA before exceptional items	990.2	979.8

LFL (Like for Like) sales

The percentage change in the year-on-year sales, removing the impact of new store openings and closures in the current or previous financial year.

Like for Like Sports Fashion businesses

The performance in the Sports Fashion segment excluding acquisitions in the current financial year and the annualisation period of businesses acquired in the previous financial year.

Net cash

Net cash consists of cash and cash equivalents together with interest-bearing loans and borrowings.

Operating profit before exceptional items

A reconciliation between operating profit and exceptional items can be found in the Consolidated Income Statement.

Profit before tax and exceptional items

A reconciliation between profit before tax and profit before tax and exceptional items is as follows:

	2021	2020
	£m	£m

Profit before tax	324.0	348.5
Exceptional items	97.3	90.3

Profit before tax and exceptional items	421.3	438.8

Proforma IAS 17

The Group presents results on a proforma basis with rents recognised under the provisions of IAS 17 'Leases' as opposed to IFRS 16 'Leases' so as to assist the user in the interpretation of current performance when compared to previous years. Further, certain management incentives are linked to the results on this basis.

A reconciliation from the IFRS 16 headline profit before tax and exceptional items to the proforma IAS 17 headline profit before tax and exceptional items is as follows:

	2021 £m	2020 £m
Headline profit before tax and exceptional items (IFRS 16)	421.3	438.8
Addback:
Depreciation and impairment of the Right of Use asset under IFRS 16	324.8	311.1
Lease interest expense	54.9	71.9
Deduct:
Lease costs expensed to the income statement under IAS 17	(340.9)	(356.2)

Headline profit before tax and exceptional items (Proforma IAS 17)	460.1	465.6

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JD Sports Fashion (JD.)

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