JJB Sports Plc. (JJB.L) on Thursday reported a narrower pre-tax loss for the year, helped by lower expenses, despite a decline in sales. The company also annopunced committed 30 million pounds investment and financing package to tide over the tough times.
For the 52 weeks ended January 29, pre-tax loss narrowed to 101.13 million pounds from 181.37 million pounds in the prior year.
Loss per ordinary share narrowed to 39 pence from 72.45 pence. Revenue declined nearly 22 percent to 284.21 million pounds from 362.89 million pounds as a result of store closures and like-for-like sales reduction of 13.1 percent.
Selling expenses dropped to 169.08 million pounds from 263.65 million pounds.
In the nine weeks ended April 1, group like-for-like sales decreased by 5.7 percent.
U.S.-based Dick's Sporting Goods, Inc. (DKS) Wednesday said it has agreed to make a 20 million pounds strategic investment in the UK sports retailer. The U.S. sports retailer will purchase 18.75 million pounds in junior secured convertible notes and 1.25 million pounds in ordinary shares of JJB Sports.
Keith Jones, Chief Executive of JJB Sports, said today, "The 52 week period to 29 January 2012 has once again proven to be an extremely challenging time for the Company. However, we believe that the investment package and strategic alliance with Dick's will provide a real opportunity to accelerate JJB's turnaround".
Looking ahead, the company said that the ongoing credit squeeze on consumers and weaker UK employment numbers create a tough environment.
The company said its directors have a reasonable expectation that the group and the company would have adequate resources to continue in operational existence for the foreseeable future. However, the directors have also concluded that there are material uncertainties facing the business.
Separately, the company said it has committed 30 million pounds investment and financing package.
In addition to Dick's 20 million pounds investment, IAML, Harris Associates, Crystal Amber and BMGFT will invest an additional 10 million pounds by exercising existing warrants and subscribing for new shares.
Adidas Group, a key supplier partner of JJB, will provide security for a two-stage loan of up to 15 million pounds to assist in the group's store transformation program and Bank of Scotland will extend existing facility arrangements until May 2015.
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