JD Sports Regulatory News (JD.)

14 April 2016

JD Sports Fashion Plc (the "Group"), a leading retailer of sports, fashion and outdoor brands, today announces its Preliminary Results for the 52 weeks ended 30 January 2016 (2015: 52 weeks ended 31 January 2015).

The results of Bank Fashion Limited, which was disposed of on 25 November 2014, are presented as a discontinued activity in the results for the 52 weeks to 31 January 2015.

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

Group Highlights

· Record result with headline profit before tax and exceptional items of £157.1 million (2015: 100.0 million) and group operating profit before exceptional items increasing by 56% to £158.9 million (2015: £102.2 million)

· Very pleasing performance in Sports Fashion with like for like store sales growth in excess of 10% for the second consecutive year resulting in operating profit before exceptional items increasing by 49% to £162.9 million (2015: £109.3 million)

· European rollout continues with a net increase of 38 stores for the JD fascia across Europe

· Encouraging progress in Outdoors with additional operational management changes put in place to drive further improvements in performance in a challenging market

· Strong cash generation with period end net cash of £209.4 million (2015: £84.2 million) which facilitates continued investment in the Sports Fashion fascias

· Sales, gross margin and operating profit / (loss) before exceptional items of the two business segments are tabulated below:

· Total capital expenditure of £83.5 million (2015: £70.2 million) which is expected to increase further in the current financial year as the international rollout of JD continues to gain momentum

· Final dividend payable increased by 5.1% to 6.20p (2015: 5.90p) bringing the total dividends payable for the year to 7.40p (2015: 7.05p) per ordinary share, an increase of 5.0%

Peter Cowgill, Executive Chairman, said:

"I am delighted to report that the Group has delivered another very strong set of results for the year to 30 January 2016 with the headline profit before tax and exceptional items increased by 57% to £157.1 million. Given that last year's result was a record for our Group then the performance in the year was very pleasing, further demonstrating the increasing influence of the JD fascia in the UK and beyond.

"During the year we have expanded our international presence with additional stores in existing European territories together with a number of stores in new countries. We continue to gain traction in Europe and are confident of the opportunities that exist for the JD fascia in these markets.

"We are encouraged by the continued positive trading across our core fascias in the year to date and the Board continues to believe that the Group is very well positioned for profitable growth."

Enquiries:

JD Sports Fashion Plc Tel: 0161 767 1000

Peter Cowgill, Executive Chairman

Brian Small, Chief Financial Officer

MHP Communications Tel: 0203 128 8100

Andrew Jaques

Barnaby Fry

Gina Bell

Introduction

I am delighted to report that the Group has delivered another very strong set of results for the year to 30 January 2016 with the headline profit before tax and exceptional items increased by 57% to £157.1 million. Given that last year's result was a record for our Group then the performance in the year was very pleasing, further demonstrating the increasing influence of the JD fascia in the UK and beyond.

The foundation of our continued success remains our world class core Sports Fashion fascias. The investments made over a number of years in developing our multichannel retail proposition and driving improved buying, merchandising and retailing disciplines have given us the platform to exploit the favourable trends which exist for athletic inspired footwear and apparel throughout Europe. We remain committed to continually enhancing our proposition for both customers and third party brand partners. During the period we demonstrated this through the opening of new larger spaced flagship style JD stores in London, Glasgow, Newcastle and Amsterdam. JD has continued to develop its reputation for setting the highest standards of visual merchandising and retail theatre and the new flagship stores, which also embrace the latest innovations in digital technology, take these standards to a new level.

During the year we have expanded our international presence with additional stores in existing European territories together with a number of stores in new countries. We continue to gain traction in Europe and are confident of the opportunities that exist for the JD fascia in these markets. More recently, we have opened our first store outside of Europe at Sunway Pyramid in Kuala Lumpur as part of a newly formed venture with Stream Enterprise in Malaysia. Opening a store outside of Europe has brought the expected challenges and we continue to enhance the flexibility of both our proposition and our operational processes to cope with the increasing scale of our international ambitions. Our key international brand partners strongly support the continued international development of JD.

In the early part of the year we made a number of operational management changes in our Outdoor operations. This brought the Blacks and Millets and the newer Ultimate Outdoors fascias under common leadership and greater use has been made of the merchandising and commercial management expertise in the core JD team.

Whilst there is a continual requirement to refine the product proposition, we believe that this new operational framework has given our Outdoor fascias a more efficient and appropriate cost base from which to operate and we are optimistic that this, combined with ongoing refinements to the product offering, will deliver a further improvement in the financial performance of these fascias in the year to January 2017.

Sports Fashion

Sports Fashion has had an exceptional year with operating profits (before exceptional items) increased by 49% to £162.9 million (2015: £109.3 million). Our fascias have successfully exploited the buoyant market for branded athletic footwear and apparel across Western Europe with like for like store sales growth in excess of 10% for the second consecutive year. Whilst we would not expect a third year of organic growth at this level, the JD fascia is developing well in both its core and international markets.

Our global brand partners support our continued international development and we would anticipate further significant investments in the current year. Indeed, we have already made one investment in the Netherlands market through the acquisition of the trade and store assets of Aktiesport and Perry Sport from the trustee in bankruptcy of Unlimited Sports Group BV. We are currently assessing the Aktiesport and Perry Sport store portfolio in order to create a viable and sustainable business across the Netherlands.

As anticipated, the overall gross margin in Sports Fashion is slightly lower than the previous year reflecting the impact of the weaker euro through the majority of the year on the JD fascia's euro denominated businesses where product is sourced and distributed from the UK. Whilst the euro has strengthened since the year end, we are mindful of the potential impact of increased volatility in margin as the results of the European businesses increase in relative importance. We continue to work on mitigating any adverse currency impacts with our global brand partners.

We are satisfied with the progress in the Chausport business in France and the Sprinter business in Spain and are also pleased to report a turnaround in the trading performance of Kukri, our supplier of multisport kit for schools, universities and sports teams at all levels.

Finally, we believe that we have successfully established Tessuti and Scotts as premium brand multichannel fashion retailers based on our strong relationships with the major global premium brands where we foster their brand equity to secure product longevity and stimulate further growth.

Outdoor

The Outdoor fascias have made pleasing progress in the year with the operating loss (before exceptional items) reduced to £4.0 million (2015: £7.1 million) with the loss in the current year arising largely from initial losses and other significant property related costs associated with the newer larger space Ultimate Outdoors stores which remain a trial at this stage. We are encouraged that the original Blacks and Millets fascia stores have delivered a breakeven result.

Margins were improved over the full year with reduced levels of discounting of Autumn and Winter ranges relative to the prior year. We are striving for further improvements in margins in this year as the merchandising and commercial disciplines increasingly align themselves with the core JD team. However, in a sector with significant presence from retailers with a high proportion of private label product in their proposition, more significant improvements in margin will require enhanced levels of product differentiation and other support from the major brands.

Financial Summary - Continuing Businesses

Revenue, gross margin and overheads

Total revenue increased by 20% in the year to £1,821.7 million (2015: £1,522.3 million). Like for like sales for the 52 week period across all Group fascias, including those in Europe, increased by 11.6%.

Total gross margin in the year of 48.5% was broadly consistent with the prior year with an increase in the margin in Outdoor to 43.3% (2015: 42.2%) offset by a slight reduction in the margin in Sports Fashion to 49.0% (2015: 49.2%).

Operating profits and results

Operating profit (before exceptional items) increased substantially by £56.7 million to £158.9 million (2015: £102.2 million) driven by the performance in Sports Fashion assisted by a further reduction in the losses in Outdoor.

There were net exceptional items in the year of £25.5 million (2015: £9.5 million) from the impairment of certain intangible assets and the write off of costs on the project to replace the Group's core IT systems. We took the decision not to continue with this project as we believe that enhanced internally developed systems will enable further growth of the Group, including increasing internationalisation, with more agility, lower cost and reduced risk.

The exceptional items comprised:

1. Relates to the impairment in the period to 30 January 2016 of the goodwill arising in prior years on the acquisition of ActivInstinct Limited, a partial impairment of the Blacks fascia name and the impairment of other goodwill and fascia name balances which were not significant. The charge in the prior period related to the goodwill arising in prior years on the acquisition of Blacks Outdoor Retail Limited, the goodwill arising in prior years on the acquisition of Kukri Sports Limited, the Kukri brand name and the Ark fascia name

2. One off exceptional charge writing off costs to date including certain other related costs

Group profit before tax in the year ultimately increased by 45% to £131.6 million (2015: £90.5 million).

Working Capital and Cash

Strong cash generation from the ongoing trading in our core retail fascias combined with further management focus on driving improvements in stock management disciplines has meant that we ended the year with a net cash balance in excess of £200 million for the first time. The positive cash position provides the Group with a strong financial foundation for our ongoing retail developments, both in the UK and internationally. Whilst there were no acquisitions in the year to 30 January 2016, we will continue to make selected acquisitions and investments, as we have done recently in the Netherlands, where they benefit our strategic development.

On 1 September 2015, the Group amended and extended its syndicated committed £155 million bank facility which previously expired on 11 October 2017. The facility has been amended by increasing the syndicated committed facility by £60 million to £215 million. The expiry date has also been extended by two years and so the amended facility now expires on 11 October 2019.

Gross capital expenditure (excluding disposal costs) increased by £13.3 million to £83.5 million (2015: £70.2 million). Our continuing commitment to enhancing our customers' experience, including the development of the new flagship concept, and to developing our overseas businesses means that investment in our retail fascias, both in terms of taking new stores where appropriate and refurbishing existing space, remains very substantial with the spend on our retail fascias increasing by £14.5 million to £51.7 million (2015: £37.2 million). We anticipate a further increase in capital expenditure in the new financial year although the ultimate level of spend will depend on the final availability of appropriate retail sites.

Elsewhere, we have now completed the project to increase the operational capacity and flexibility of our Kingsway warehouse at a cost in the year of £9.7 million (2015: £11.5 million). We have also acquired a plot of land next to our existing Kingsway site at a cost of £4.7 million to facilitate future development.

Store Portfolio

During the period, store numbers have moved as follows:

Sports Fashion Fascias

In addition, there were four JD branded Gyms at the period end in Hull, Liverpool, Preston and Coventry. A fifth gym has opened in Washington subsequent to the period end.

Outdoor Fascias

Dividends and Earnings per Share

The Board proposes paying a final dividend of 6.20p (2015: 5.90p) bringing the total dividend payable for the year to 7.40p (2015: 7.05p) per ordinary share, an increase of 5%. The proposed final dividend will be paid on 1 August 2016 to all shareholders on the register at 24 June 2016. We believe that this level of dividend strikes a fair balance for shareholders with appropriate capital retained to facilitate ongoing developments, particularly investment in the international Sports Fashion fascias, which will drive success for the Group, and increased benefits to shareholders, over the longer term.

The adjusted earnings per ordinary share before exceptional items have increased by 58% to 61.34p (2015: 38.89p).

The basic earnings per ordinary share have increased by 43% to 50.16p (2015: 35.17p).

People

We are fortunate, as a Group, to have talented and committed people in every aspect and level of our business. The record result is principally due to their expertise, energy and passion. I thank everybody involved in all of our businesses for delivering these excellent results.

Current Trading and Outlook

We are encouraged by the continued positive trading across our core fascias in the year to date and the Board continues to believe that the Group is very well positioned for profitable growth.

Our next scheduled update will take place upon the announcement of our Interim Results which is scheduled for 13 September 2016.

Peter Cowgill

Executive Chairman

14 April 2016

Consolidated Income Statement

For the 52 weeks ended 30 January 2016

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 30 January 2016

Consolidated Statement of Financial Position

As at 30 January 2016

Consolidated Statement of Changes in Equity

For the 52 weeks ended 30 January 2016

Consolidated Statement of Cash Flows

For the 52 weeks ended 30 January 2016

Analysis of Net Cash

As at 30 January 2016

1. 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 focused on the nature of the businesses within the Group. The Group's reportable segments under IFRS 8 are therefore as follows:

· Sports Fashion - includes the results of JD Sports Fashion Plc, John David Sports Fashion (Ireland) Limited, Spodis SA, Champion Sports Ireland, JD Sprinter Holdings 2010 SL (including subsidiary companies), JD Sports Fashion BV, JD Sports Fashion Germany GmbH, JD Sports Fashion SRL, JD Sports Fashion Belgium BVBA, JD Sports Fashion Sweden AB, JD Sports Fashion Denmark ApS, JD Sports Fashion SDN BHD, Size GmbH, ActivInstinct Limited, JD Gyms Limited, Duffer of St George Limited, Topgrade Sportswear Limited, Kooga Rugby Limited, Focus Brands Limited (including subsidiary companies), Kukri Sports Limited (including global subsidiary companies), Source Lab Limited, R.D. Scott Limited, Tessuti Group Limited (including subsidiary companies), Nicholas Deakins Limited, Cloggs Online Limited, Ark Fashion Limited and Mainline Menswear Limited.

· Outdoor - includes the results of Blacks Outdoor Retail Limited and Tiso Group Limited (including subsidiary companies).

Activinstinct Limited is now included in the Sports Fashion segment reflecting the fact that there has been a restructure of the business in the year and the website is now held on a different platform more closely aligned with the Group's other Sports Fashion businesses than with the businesses classified as 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. Drawdowns from the Group's syndicated borrowing facility of £nil (2015: £31,000,000), a deferred tax asset of £482,000 (2015: liability of £1,804,000) and an income tax liability of £15,757,000 (2015: £12,931,000) 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 2016 is shown below:

The comparative segmental results (re-presented) for the 52 weeks to 31 January 2015 are as follows:

Geographical Information

The Group's operations are located in the UK, Republic of Ireland, France, Spain, Germany, the Netherlands, Italy, Sweden, Denmark, Belgium, Malaysia, Australia, New Zealand, Canada, Dubai, Singapore and Hong Kong.

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

The revenue from any individual country, with the exception of the UK, 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:

2. Exceptional items

1. Relates to the impairment in the period to 30 January 2016 of the goodwill arising in prior years on the acquisition of ActivInstinct Limited, a partial impairment of the Blacks fascia name and the impairment of several other goodwill and fascia name balances which were not significant. The charge in the prior period related to the goodwill arising in prior years on the acquisition of Blacks Outdoor Retail Limited, the goodwill arising in prior years on the acquisition of Kukri Sports Limited, the Kukri brand name and the Ark fascia name.

2. One off exceptional charge writing off costs to date including certain other related costs

These selling and distribution expenses and administrative expenses are exceptional items as they are,

individually, and in aggregate, material in size and/or unusual or infrequent in nature.

3. Earnings per ordinary share

Basic and diluted earnings per ordinary share

The calculation of basic and diluted earnings per ordinary share at 30 January 2016 is based on the profit from continuing operations for the period attributable to equity holders of the parent of £97,634,000 (2015: £68,461,000) and a weighted average number of ordinary shares outstanding during the 52 week period ended 30 January 2016 of 194,646,632 (2015: 194,646,632).

An Ordinary Resolution was passed at the Annual General Meeting, effective 30 June 2014, resulting in a share split whereby four Ordinary shares were issued for each Ordinary share. In accordance with IAS 33, the number of shares outstanding before the event has been adjusted for the proportionate change as if the event had occurred at the beginning of the earliest period presented.

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 from continuing operations 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 meaningful measure of the underlying performance of the Group.

4. Acquisitions

Current period acquisitions

During the period, the Group has increased its shareholding in three non-wholly owned subsidiaries. These transactions were not material.

Prior period acquisitions

Mainline Menswear Limited

On 21 March 2014, the Group acquired 80% of the issued share capital of Mainline Menswear Holdings Limited for cash consideration of £10,924,000 with additional consideration of up to £500,000 payable after 30 November 2014 if certain performance criteria were achieved. At acquisition, management believed that Mainline Menswear was on course to meet the performance criteria for the maximum contingent consideration to be payable and therefore the fair value of this contingent consideration at this time was £500,000. The deferred consideration was subsequently paid in full in February 2015. Mainline Menswear is primarily an online niche retailer of premium branded Men's apparel and footwear.

The measurement period concluded in the 52 week period ended 30 January 2016, with no measurement adjustments being made to the fair values in the period.

The intangible asset acquired represents the fair value of the 'Mainline' fascia name. The Board believes that the excess of consideration paid over the fair value of the net identifiable assets of £7,363,000 is best considered as goodwill on acquisition representing employee expertise and anticipated future operating synergies.

Ultimate Outdoors

On 3 February 2014, the Group acquired, via its 100% owned subsidiary Blacks Outdoor Retail Limited, 100% of the entire issued share capital of Ultimate Outdoors Limited for cash consideration of £835,000 which was equal to the fair value of the net identifiable assets acquired.

The measurement period concluded in the 52 week period ended 30 January 2016, with no measurement adjustments being made to the fair values in this period.

Oswald Bailey

On 28 March 2014, the Group acquired, via its 100% owned subsidiary Blacks Outdoor Retail Limited, the trade and assets of 14 stores (and 2 websites) trading as Oswald Bailey for cash consideration of £851,000 which was equal to the fair value of the net identifiable assets acquired. Oswald Bailey is a retailer of outdoor footwear, apparel and equipment.

The measurement period concluded in the 52 week period ended 30 January 2016, with no measurement adjustments being made to the fair values in this period.

5. Disposals

Prior period disposal

Disposal of 100% of the Issued Ordinary Share Capital of Bank Fashion Limited