Sales down but JJB is still upbeat
JJB Sports' survival hopes have been lifted despite another batch of negative trading figures.
The group's like-for-like sales were down by 7.6% in the 26 weeks to January 29, but this was better than the 17.9% decline over the previous half year.
While analysts said JJB still has a mountain to climb, with losses of £60m expected for the year just completed, shares jumped 20% on hopes the figures signal the start of improved trading.
Freddie George, a retail analyst at Seymour Pierce stockbrokers, has maintained his sell recommendation and expects another two years of losses. "We are, however, becoming more confident on the outlook," he added.
Last year, JJB was forced to secure £96.5m in funds from major shareholders, as well as announce plans to close 43 unprofitable stores and place a further 46 on review to stave off administration. It has 12 stores in Northern Ireland.
Its problems stemmed from stock supply issues and intense competition.
As well as slowing the decline in like-for-like revenues the company has been encouraged by the profitability of those sales, with margins up 32.1% in the five weeks to January 29.
Chief executive Keith Jones said the retailer's performance was broadly in line with expectations.
He added: "As we commented last month, weaker UK employment numbers and the ongoing credit squeeze on consumers create a tough environment.
"However, we are continuing to implement our turnaround aware of the importance of the key trading opportunities afforded by the European football championships and London Olympics".
The group's turnaround scheme involves cutting costs and increasing sales through investing in staff training, upgrading some of its 160 viable stores and improving its ranges.