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Going gets tough for UK sports company
By Mark Potter |
September 29, 2010, Wednesday
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Print Edition
Print Edition
BRITISH retailer JJB Sports said trading had got tougher as shoppers brace for austerity measures and insisted it would step up promotions around events such as the launch of the new England soccer strip next month.
Analysts said the promotions could hit profit margins, and JJB shares, struggling since the group narrowly missed falling into administration last year, dropped over 10 percent in early trading Yesterday.
"In light of the worse trading and margin investment we expect forecasts to come under pressure, with losses now likely in the all-important second-half period," said Singer analyst Matthew McEachran, who plans to lower his full-year loss forecast of 21 million pounds (US$33 million) by 5-10 million.
JJB shares fell 11.4 percent to 9.75 pence yesterday morning, valuing the firm at 62 million pounds. The shares, which once traded at over 400 pence, plunged to less than 3 pence in late 2008.
JJB Chief Executive Keith Jones, who warned in May it would take three years to turn the business around, told Reuters he expected a full-year adjusted operating loss within analysts' existing forecast range of 20 million to 30 million pounds.
Britain's retailers fear steps to rein in government debt, such as higher taxes and public spending cuts, will hit consumer spending in the months ahead.
Jones said JJB's banks had agreed to waive a test of its lending arrangements in October to give it the flexibility to implement its plans.
Analysts said the promotions could hit profit margins, and JJB shares, struggling since the group narrowly missed falling into administration last year, dropped over 10 percent in early trading Yesterday.
"In light of the worse trading and margin investment we expect forecasts to come under pressure, with losses now likely in the all-important second-half period," said Singer analyst Matthew McEachran, who plans to lower his full-year loss forecast of 21 million pounds (US$33 million) by 5-10 million.
JJB shares fell 11.4 percent to 9.75 pence yesterday morning, valuing the firm at 62 million pounds. The shares, which once traded at over 400 pence, plunged to less than 3 pence in late 2008.
JJB Chief Executive Keith Jones, who warned in May it would take three years to turn the business around, told Reuters he expected a full-year adjusted operating loss within analysts' existing forecast range of 20 million to 30 million pounds.
Britain's retailers fear steps to rein in government debt, such as higher taxes and public spending cuts, will hit consumer spending in the months ahead.
Jones said JJB's banks had agreed to waive a test of its lending arrangements in October to give it the flexibility to implement its plans.
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