JD Sports Regulatory News (JD.)

17 April 2013

JD Sports Fashion Plc (the "Group"), the leading retailer and distributor of branded sportswear, fashionwear and outdoor clothing and equipment today announces its Preliminary Results for the 53 weeks ended 2 February 2013.

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

Group Highlights

·; Ongoing robust performance in core Sports fascias which continue to provide investment platform for future profitability in JD in Europe. In the UK and Ireland, these fascias contributed an additional £4.7m of operating profits in the year (before exceptional items) and we are building an appropriate store base in Europe for future success there.

·; The good performance in the Sports fascias has continued in the current financial year with like for like sales growth in the UK and Ireland stores (excl Champion) of 1.9% in the 9 weeks to 6 April 2013.

·; £14.9 million of operating losses (before exceptional items) incurred in Outdoor fascias but performance improving now that new management team has been installed with stocks being better managed, store investment commenced and ongoing cost reduction programme to deliver benefits in the current financial year. Like for like sales in Outdoor in the current financial year have benefitted significantly both from the recent sustained cold weather and a sustained clearance programme from January through to March.

·; Sales, gross margin and operating profit before exceptional items of the four business segments are tabulated below:

·; Like for like sales for the 53 week period in the UK and Ireland combined core retail fascias increased by 1.2%:

·; Final dividend payable increased by 3.8% to 22.00p (2012: 21.20p) bringing the total dividends payable for the year to 26.30p (2012: 25.30p) per ordinary share, an increase of 4.0%.

Peter Cowgill, Executive Chairman, said:

"The core Sports fascias in the UK continue to produce excellent results and provide the Group with a very solid foundation for ongoing profitability and cash generation.

"We are pleased overall with the start that we have made to the new year. A very considerable amount of reorganisation in both Outdoor Retail and our warehousing and distribution operations is now behind us and this should benefit trading in the balance of the year.

"The Group is exceptionally well positioned with its retail proposition, financial resources and extended management experience to take advantage of opportunities both in the UK and internationally. Whilst the Board recognises that recent acquisition activity has impacted on short term returns, it remains confident that the Group is well positioned to deliver earnings growth and increased shareholder returns over the longer term."

Enquiries:

JD Sports Fashion Plc Tel: 0161 767 1000

Peter Cowgill, Executive Chairman

Barry Bown, Chief Executive

Brian Small, Finance Director

MHP Communications Tel: 020 3128 8100

Andrew Jaques

Barnaby Fry

Ian Payne

Introduction

The year to January 2013 was one of substantial change for the Group and it is worth reflecting on the key changes:

·; We entered the Outdoor market in January 2012 with the purchase of the Blacks and Millets store portfolios from the administrators of Blacks Leisure Group Plc. Although initial results have been more disappointing than originally anticipated we now have a firm foothold in a different and growing lifestyle market in the UK. With our capacity for creating efficient and appealing environments already evidenced through the stores which we have refurbished, along with our capable support systems, we remain optimistic that these Outdoor fascias will prove to be a successful core retail operation.

·; We consolidated our warehousing into the new central distribution facility in Rochdale, eliminating the capacity constraints we previously had and reducing double handling of stock. The new warehouse has subsequently absorbed both the Christmas period and the transfer in the current year of the Outdoor business from its facility in Northampton although there are still improvements in efficiency to be achieved.

·; We have continued our expansion of the Sports Fascias in France and Spain and are expecting to continue to add stores in existing and new territories in 2013. Our product offer in Southern Europe can be improved but we now have a greater understanding of the key ingredients for success in Europe. We expect to move into other territories in Europe this year.

·; We have strengthened the Group's executive team in the last six months with the appointment of Dave Williams as Group Commercial Director and Pat Lee as Group Supply Chain and Change Director. We have also invested significantly in our Multichannel team.

·; We have committed to changing our legacy IT systems to Oracle. We have already successfully implemented Oracle Financials with the main retail system following through 2014 and 2015.

Although we have a number of short term challenges we believe we are developing our infrastructure appropriately to support the future anticipated growth of our businesses in all channels. This investment in infrastructure also ensures that we protect the core Sports fascias in the UK which continue to produce excellent results and provide the Group with a very solid foundation for ongoing profitability and future cash generation.

Strategic Developments

Retail remains the core focus for the Group and the strategic developments and acquisitions which we have made in the period reflect this focus.

We have continued the international development of our JD fascia through further expansion in France and the opening of our first stores in Spain. By 2 February 2013 we had 11 JD and Size? stores in France with one further store opening to date in the new financial period. We now feel that we are beginning to generate some momentum in France. We will maintain this momentum with further openings through 2013.

During the year we opened five JD stores in Spain including the conversion of a pre-existing Sprinter store. One further store has opened to date in the new financial year. Spain has proved a more difficult market than France for JD to date and improvements need to be made to both our product offer and price architecture there.

We made our initial entry into the Premium Fashion sector in 2011 through the acquisition of eight Cecil Gee stores. We have subsequently complemented this in the current year by making two further small acquisitions (Tessuti Group and Originals) in this sector. These acquisitions have given us additional critical mass together with management knowledge, both of which were needed to create a business in this sector which is capable of delivering future profitability, supported by the Group's resource. The combined business is now run by the management of Tessuti.

In recent years, the Group has steadily increased its stable of owned and licensed sporting and fashion inspired brands. This strategy has continued and in the year to January 2013 we acquired rights to the Henleys, Fly 53 and Gio Goi brands at a cost of £2.6 million, £0.4 million and £2.4 million respectively.

In Distribution, we have been pleased with the performance to date of the Source Lab business in which we acquired an 85% holding in May 2012 at a cost of £2.6 million. Source Lab's management have proven experience of developing ranges of sport related product and we believe we can use this experience to enhance the return from the Group's stable of brands and other Sports inspired businesses.

After the year end, we also acquired the intellectual property and other assets associated with the Cloggs online footwear business from its administrators for a cash consideration of £0.6m. Cloggs is an online niche retailer of premium branded footwear and so whilst its product offering is very complementary it also gives us opportunities to extend our customer base and the width of our offer.

We have also made significant investments in the year in two projects which will not only support our current retail businesses in future years but which will also have the capacity to deal with growth both organically and by acquisition whether that be in the UK or overseas. The first of these projects is our new centralised warehouse in Kingsway, Rochdale which became fully operational in Summer 2012 with substantially all stock for the UK and Ireland retail fascias now channelled through this facility. The second major project concerns the development of replacement of our legacy bespoke commercial systems with Oracle Retail. This project is in its early stages and we currently plan to bring the first of the Group's businesses on to this system in 2014. Thereafter, the retail businesses will be transferred in stages with all current retail businesses anticipated to be working on the new system by Autumn 2015.

Disposal of Canterbury

During the year we completed the disposal of the Canterbury business to Pentland Group Plc for a total consideration of £22.7 million which represented a full repayment of the net cash investment made by the Group into Canterbury since our acquisition of the initial interest in August 2009.

Sports Fascias

The Sports Fascias are JD, Size?, Chausport, Sprinter and Champion Sports.

The Sports Fascias' total revenue (after elimination of inter-group sales) increased by 10.2% during the period to £854.0 million (2012: £774.6 million) with like for like sales growth of 2.5% (2012: +0.3%) in the core UK and Ireland sports fascia stores (excl Champion). This represents a significant improvement on the +1.2% that we announced in the results for the first half of the year and is a very robust performance in the current economic climate. It is clear that our largely unique product offering combined with a well-executed retail environment is attractive to the consumer. Our challenge is to ensure that these basic principles are repeated in all of our retail fascias.

Gross margin achieved in the Sports Fascias decreased only marginally to 50.6% (2012: 50.8%) which includes a full year of the lower margin Sprinter and Champion businesses for the first time.

Operating profit (before exceptional items) of the Sports Fascias increased by £3.5 million to £77.8million (2012: £74.3 million). Most pleasing was the increase of £4.7m in the operating profit (before exceptional items) of the core JD businesses in the UK and Ireland (including Size?) to £72.9 million (2012: £68.2 million).

The contribution from Chausport decreased to £0.6 million (2012: £1.5 million). Although there was growth in like for like sales of 0.7% (2012: 2.2%), this growth did not generate sufficient margin to cover an increased investment in resource both in stores and centrally.

The loss in the JD France business (including the Size store in Paris which was opened in the year) increased marginally to £0.5 million (2012: loss of £0.2 million) as this business scales up. The performance of our recently opened stores makes us increasingly confident about the prospects for JD in France though and we would hope to at least reach a break even position in the current financial year although we are fully aware that we need to improve our overall apparel offer, particularly in the South of the country.

The Sprinter business, which we acquired in June 2011, had a good year with profits maintained at £4.7 million (2012: £4.7 million for the 7 months post acquisition). This is an excellent performance overall given the seasonally loss making five month non like for like period at the start of the year and the increase in the rate of VAT from 18% to 21% which came into effect on 1 September 2012. We remain pleased with this acquisition and believe that the management team that we have in Spain are well equipped to steer the business through the very difficult economic period that the country is currently facing.

We opened our first JD stores in Spain in the year with our limited openings to date already providing us with considerable additional market knowledge which we are using to refine our offer. However, we do not yet have any critical mass and given the ongoing economic difficulties and increased fiscal take then we will remain cautious in the short term in our approach to opening new stores in Spain.

Champion made a minimal contribution to Operating Profit in the year (2012: £0.1 million). However, given that this includes the absorption of £0.8m of losses in the non like for like period at the start of the year then the business performed well. Whilst there are some short term operational changes which we can make which will benefit the financial performance in the shorter term we do not expect a more substantial improvement until the wider economy in the Republic of Ireland picks up more strongly.

Fashion Fascias

The established Fashion Fascias of Bank and Scotts are now complemented by a Premium Fashion business comprising Cecil Gee, Originals and Tessuti.

The Fashion Fascias' total revenue (after elimination of inter-group sales) increased by 5.8% during the period to £160.4 million (2012: £151.6 million). Like for like sales in the two core fascias declined by 4.1% (2012: +2.2%) being Bank -4.9% (2012: +3.9%) and Scotts -0.5% (2012: -2.9%).

Gross margin achieved in the Fashion Fascias declined from 48.5% to 47.4%. This decline was caused by clearance activity in the Cecil Gee business which was required to clear excess Spring / Summer product. These stores, along with the Originals stores which were acquired in the year, are now managed by the Tessuti management team.

The Bank fascia sells largely branded fashion to both males and females, predominantly for the teenage to mid-twenties sector. In the year the store portfolio grew from 80 stores to 85 stores, still based predominantly in the North and the Midlands. Whilst the business made an operating loss (before exceptional items) in the year of £0.5 million (2012: profit of £3.1 million) we are encouraged by a number of factors with footfall maintained, a good performance in Menswear and a slight enhancement of margins. With the right product, we believe that Bank is capable of making a contribution to Group operating profits again.

Our turnaround plan for Bank involves increased focus on the female offer which is reflected in our recent recruitment of an experienced Head of Women's although we will not see the benefits of her product decision making until later in the current financial year. We will also look to utilise our stable of owned and licensed brands and improve our footwear offering. There will also be some rationalisation of the central overhead base.

The Scotts fascia stores continue to offer branded fashion authority to more affluent young males, largely in the North and Midlands. Three stores were closed in the period with no new openings resulting in 32 stores at the year end (2012: 35 stores). Operating profit (before exceptional items) reduced by £0.7 million to £0.1 million (2012: £0.8 million) principally from a reduction in gross margin. The fascia continues to serve a useful purpose to the Group as an introducer of brands and provides revenue for a legacy store portfolio.

Our combined Premium Fashion offering made an operating loss of £1.5 million (2012: loss of £0.6 million) principally from losses in the Cecil Gee stores which we understood to be loss making when we made our initial entry into the Premium Fashion market in June 2011. However, following our acquisition of the Tessuti business in the year we believe that we have a management team that has sector specific experience and is capable of delivering a successful Premium Fashion proposition with a consistency of retail standards and a geographically appropriate brand offering. Dealing with the legacy issues in the business, particularly property, will mean that we are unlikely to deliver any meaningful profit from this activity in the short term.

Outdoor

Outdoor had an exceptionally difficult year resulting in it delivering an operating loss (before exceptional items) of £14.9 million (2012: loss of £2.2 million for the short period post acquisition).

On our acquisition of the business from administration in January 2012 we inherited a very limited and unbalanced stock position, with a particularly severe lack of stocks in many core high performing lines combined with an excessively large and overrented store portfolio and a disproportionate central cost base. Our first priorities in turning around the business were to deal with these issues. Agreeing and receiving a resumption of supply from key suppliers was a difficult and time consuming process. Consequently, it was three months before we started to receive any substantial deliveries of new stocks. During this period, the business made very substantial losses.

At acquisition we backed the incumbent management team, who only came together in Autumn 2011, and gave them the opportunity to turn the business round. However, it became clear through the year that they did not have sufficient experience or knowledge of the Outdoor market to take the business forward. This was reflected in the proposition which they bought into for the key Autumn and Winter seasons which required significant margin sacrifice to clear through. We now have a new management team which includes both external recruits and long serving members of the Group's team. We will not see its full impact until later in the year but we believe that we now have the right team and strategy to take the business forward.

The initial strategy on retail fascia and property locations was that we should retain only the Blacks fascia long term with a portfolio of approximately 130 stores. However, during the year we have increasingly realised that there is a place for Millets as it has considerable support and goodwill amongst its customers and it is a good outlet for our own brands (Peter Storm and Eurohike). This two fascia strategy, with differentiated management, will enable us to segment the product more appropriately and so we now believe that we will retain approximately 140 stores in the longer term of which approximately 80 will be fascia'ed as Blacks and 60 will be fascia'ed as Millets. The Blacks stores will primarily stock more technical products from the premium brands at higher price points with Millets catering for a more casual outdoor customer.

During the year we closed 122 stores and opened one store to give a store portfolio of 174 stores (2012: 295 stores). A further five stores have closed since the year end. The negotiations with the landlords on either new leases or temporary licences have also been protracted as we have needed to negotiate rents which were sustainable in the longer term. This assessment has been made difficult because of the need for a major proposition overhaul. However, this task is now well progressed. We have also refurbished seven stores to date. This has provided us with valuable additional knowledge which we will apply in future refurbishments. We are encouraged by the performance of these stores in the period since they reopened.

Keeping the smaller scale Blacks and Millets business in their pre-existing office and warehouse facility at Northampton was not economically viable. We have now closed the warehouse and moved the distribution function in to the Group's new facility at Kingsway. An exceptional charge of £0.9 million has been recognised in the year for this restructuring of the distribution operations. We have also integrated several back office functions into existing Group teams. The migration of the remaining activity from Northampton to Bury is proposed to take place through Summer 2013 and so we would anticipate a further charge for restructuring in the new financial year.

We believe that the various issues which Blacks has faced in the year were a legacy of the administration process and the result of previous mismanagement and we would anticipate a significant reduction in the operating loss in the current financial year. We will, of course, now be looking for the support of suppliers in return for our efforts in elevating the desirability of their brands in premium retail locations. With this support, we believe that the decisive action we have taken to date and the strategy which we have adopted will give us the foundation of a business which is capable of delivering sustained operating profits in the medium term.

Distribution

Our Distribution businesses contributed a small operating profit of £0.4 million (2012: £1.1 million). This includes a profit of £1.9 million from Canterbury in the seven months prior to its disposal (2012: £0.4 million profit for the full year) with the second half of the year traditionally loss making. A number of our remaining Distribution businesses have had a difficult year reflecting the downstream effect of ongoing challenging circumstances in the Retail sector generally. We continue to review the benefit of holding each of these investments which must be capable of either delivering a significant profit in its own right or give us some other tangible strategic benefit.

The Getthelabel.com online and catalogue business within Topgrade has now been trading for over three years. Overall we are pleased with the development of this business with sales increasing in the year by 43% and losses more than halved to £0.7 million (2012: £1.5 million). We anticipate further growth this year with a further reduction in the losses. Operating profits within the wholesale operation of Topgrade decreased slightly by £0.2 million to £0.6 million (2012: £0.8 million). The performance of this element of the business is naturally volatile as it is very dependent on the timing and general availability of clearance packages from the major brands.

Focus has had a difficult year with an operating loss of £1.0 million (2012: profit £1.4 million) which is primarily from losses which have arisen after the acquisition of the trade and assets of the Fly 53 brand including 14 concessions in House of Fraser stores. As with other businesses which we have acquired in similar distressed circumstances the business was in a fractured state on acquisition with a poor mix of stocks and an inappropriate cost structure. We believe we have now resolved the majority of these acquisition issues and would anticipate at least a substantial reduction in these operating losses in the new financial year.

Although revenues in Kukri have grown by £4.4 million to £20.5 million (2012: £16.1 million) the business made an operating loss of £0.1 million (2012: profit £0.5 million). In the period after acquisition, Kukri has needed to make substantial investment in new IT systems and other infrastructure to have the potential to grow and ultimately deliver a meaningful return on our investment. We believe that Kukri's current underperformance is short term and that the brand is strong and can be leveraged in the future.

Elsewhere in the distribution division, Deakins has maintained its profitability and we are very pleased with the initial performance of Source Lab. However, the disappointing performance in Kooga has continued with losses increased to £1.0 million (2012: £0.8 million).

Financials Summary

Revenue

Total revenue increased by 18.8% (almost £200 million) in the year to £1,258.9 million (2012: £1,059.5 million) of which £121.0 million of sales were generated from the full year of the Blacks business (2012: £5.9 million for the three week period). A further £54.8 million of revenue was generated either in businesses acquired in the year or the annualisation of the other businesses acquired in the year to January 2012. £20.6 million of revenue was lost from the disposal of Canterbury.

Gross margin

Total Gross Margin fell from 49.2% to 48.7% reflecting the impact of the margin sacrifice in the second half of the year in the Outdoor business. The achieved margin in the Fashion Fascias also fell by 1.1% to 47.4% (2012: 48.5%) with ongoing clearance activity in the Premium Fashion businesses. We are, however, greatly encouraged by the fact the margins in the Sports fascias were largely maintained at prior year levels.

Operating profits

Operating profit (before exceptional items) decreased by £15.2 million to £61.3 million (2012: £76.5 million) principally due to the full year loss in the Blacks business of £14.9 million (2012: loss of £2.2 million for the three week period). We expect these losses to be substantially reduced in the new financial year.

After exceptional items of £5.3 million (2012: £9.7 million), Group operating profit decreased from £66.8 million to £56.0 million. These exceptional items comprised:

(1) Reorganisation of the warehouse operations consisting of provisions for onerous property leases and redundancy costs.

(2) Redundancies and other one off costs incurred in the closure of Canterbury European Fashionwear Limited and Canterbury North America LLC.

(3) Restructuring of the Blacks business following acquisition for relocation of warehouse operations.

(4) Current year charge relates to a partial impairment of the goodwill arising on the acquisition of Bank Fashion. The charge in the prior year relates to the impairment of intangible assets on Kooga goodwill and brand name (£1.9 million) and Cecil Gee fascia name (£0.8 million).

(5) Profit on the disposal of the Canterbury group of businesses to Pentland Group plc in September 2012 (see note 6).

(6) The gain on the disposal of the Focus joint venture arose in the prior year from the remeasurement to fair value of the Group's previously held investment in Focus Brands Limited.

Working capital and financing

A combination of funding for the Blacks business, ongoing acquisition activity (including the acquisition of the Gio Goi brand in the final week before the period end) and capital expenditure incurred means that year end net cash decreased by £14.7 million to £45.6 million (2012: £60.3 million). The revolving credit facility has been used through most of the year and, consequently, the net financing charge increased by £0.5 million to £0.9 million (2012: £0.4 million).

The Group has a £75 million committed syndicated bank facility secured until 12 October 2015. This facility consists of a £60 million revolving credit facility with a current margin of 1.40% over LIBOR together with a £15 million working capital facility. It is likely that we will increase these facilities in the current year to enable us to continue to make acquisitions when opportunities occur.

Gross capital expenditure (excluding disposal costs) decreased slightly by £2.2 million to £43.5 million (2012: £45.7 million). The majority of the expenditure on the Kingsway facility was incurred in the prior year although a further £1.4 million was spent in the year (2012: £19.4 million). However, this reduction was offset by increased investment in our overseas businesses with total investment in the year of £9.5 million in France (2012: £4.7 million) and £6.8 million in Spain (2012: £2.1 million). Elsewhere, we also spent £3.4 million on the Blacks property portfolio and we have acquired a new combined warehouse and head office building for Kukri at a cost of £0.7 million.

Increased confidence in the potential for JD internationally combined with ongoing investment in refurbishing the Blacks portfolio and investment in the new core Oracle ERP system means that capital expenditure will remain high this year.

Working capital remains well controlled with suppliers continuing to be paid to agreed terms and settlement discounts taken whenever due.

Store Portfolio

During the period, store numbers (excluding trading websites) have moved as follows:

Sports Fascias

(a) Includes the Size store in Les Halles, Paris

(b) Includes the Foot Patrol store in Berwick Street, London

Fashion Fascias

Outdoor Fascias

Dividends and Earnings per Share

The Board proposes paying a final dividend of 22.00p (2012: 21.20p) bringing the total dividend payable for the year to 26.30p (2012: 25.30p) per ordinary share. The proposed final dividend will be paid on 5 August 2013 to all shareholders on the register at 10 May 2013. The total dividends payable for the year have therefore increased by a further 4% with a cumulative growth over the last five years of 209%.

The adjusted earnings per ordinary share before exceptional items were 88.51p (2012: 105.89p).

The basic earnings per ordinary share were 79.71p (2012: 96.27p).

Employees

The Board are extremely grateful for the contribution that all our employees make through skills, energy and dedication. In difficult trading conditions and with radical turnaround plans in place in certain of our businesses then we realise that we are very reliant on this contribution. Equally, the Board recognises that the ongoing success of the core JD business comes from the execution excellence delivered by the whole team.

Current Trading and Outlook

We are pleased overall with the start that we have made to the new year. A very considerable amount of reorganisation in both Outdoor Retail and our warehousing and distribution operations is now behind us and this should benefit trading in the balance of the year. The like for like sales performance for the nine weeks to 6 April 2013 continues to be encouraging in the Sports Fascias. This performance has been as follows:

The Group is exceptionally well positioned with its retail proposition, financial resources and extensive management experience to take advantage of opportunities both in the UK and internationally. Whilst the Board recognises that recent acquisition activity has impacted on short term returns, it remains confident that the Group is well positioned to deliver earnings growth and increased shareholder returns over the longer term.

A further update will be made in our Interim Management Statement on 19 June 2013.

Peter Cowgill

Executive Chairman

17 April 2013

Consolidated Income Statement

For the 53 weeks ended 2 February 2013

Consolidated Statement of Comprehensive Income

For the 53 weeks ended 2 February 2013

Consolidated Statement of Financial Position

As at 2 February 2013

Consolidated Statement of Changes in Equity

For the 53 weeks ended 2 February 2013

Consolidated Statement of Changes in Equity (continued)

For the 53 weeks ended 2 February 2013

Put options at 2 February 2013 are held by the 40% non-controlling interest in Tessuti Group Limited and 15% non-controlling interest in Source Lab Limited. At 28 January 2012 the put options were held by the 49% non-controlling interest in Canterbury of New Zealand Limited and 25% non-controlling interest in Canterbury International (Australia) Pty Limited.

Consolidated Statement of Cash Flows

For the 53 weeks ended 2 February 2013

Analysis of Net Cash

As at 2 February 2013

1. Prior period restatement

The comparative Consolidated Statement of Financial Position and Consolidated Statement of Changes in Equity as at 28 January 2012 has been restated to reflect the completion in the period to 2 February 2012 of the initial accounting in respect of the acquisition of JD Sprinter Holdings 2010 acquired in the period to 28 July 2012 and to reflect the completion of the initial accounting in respect of Blacks Outdoor Retail Limited acquired in the period to 28 January 2012. Adjustments made to the provisional calculation of the fair value of assets and liabilities acquired, as reported at 28 January 2012, in the period to 2 February 2013 have resulted in the following changes:

For the acquisition of JD Sprinter Holdings 2010 SL the measurement adjustments made to the fair values of the net assets reduced total assets by £449,000, reduced total liabilities by £289,000 and the resulting change on total equity was £160,000. This adjustment has also decreased non-controlling interest by £160,000.

For the acquisition of Blacks Outdoor Retail Limited the measurement adjustments made to the fair values of the net assets increased total assets by £204,000, increased total liabilities by £204,000 and the resulting change on total equity was £nil.

The impact of these adjustments on the net assets is shown in note 5.

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 focused on the nature of the businesses within the Group. A new reportable segment was created in the prior year on acquisition of the Blacks business which signalled an entry into the outdoor retail segment for the Group. The Group's reportable segments under IFRS 8 are therefore as follows:

·; Sport retail - includes the results of the sport retail trading companies JD Sports Fashion Plc, John David Sports Fashion (Ireland) Limited, Spodis SA, Champion Sports Ireland, JD Sprinter Holdings 2010 SL and Duffer of St George Limited

·; Fashion retail - includes the results of the fashion retail trading companies Bank Fashion Limited, R.D. Scott Limited, Premium Fashion Limited and Tessuti Group Limited (including subsidiary companies)

·; Outdoor retail - includes the results of Blacks Outdoor Retail Limited

·; Distribution businesses - includes the results of the distribution companies Topgrade Sportswear Limited, Nicholas Deakins Limited, Kooga Rugby Limited, Nanny State Limited, Focus Brands Limited, Kukri Sports Limited (including global subsidiary companies) and Source Lab Limited. Canterbury Limited (including global subsidiary companies) was also included until the point of disposal

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 'Sport retail' 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 products and 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 arms length terms.

2. Segmental analysis (continued)

The Board consider that certain items are cross divisional in nature and cannot be allocated between the segments on a meaningful basis. The share of results of joint venture was presented as unallocated in the following tables, as this entity had trading relationships with companies in all of the Group's segments. In the prior year, the exceptional credits pertaining to the dividend received from joint venture (£2,691,000) and gain on disposal of joint venture (£871,000) was included within the unallocated segment. 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 liability of £3,852,000 (2012: restated liability of £723,000) and an income tax liability of £8,817,000 (2012: £8,861,000) 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 Sport retail) 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 53 weeks to 2 February 2013 is shown below: