Restructuring of JJB most likely take three to five years

28 May '11

5 min read

JJB Sports plc announces its results for the 52 weeks to 30 January 2011.

Commenting on these results, Mike McTighe, Chairman of JJB Sports, said:

"Since the period end, a great deal has taken place. We have delivered two further fundraisings and agreed a significant CVA with our landlords that gives the Company a real chance of recovery.

However, this is the beginning of the hard work and not the end.

The financial restructuring was completed on schedule by the end of April and since then the operational restructuring has progressed well. Underperforming stores have closed as part of our CVA, and headcount and operating costs have been significantly reduced. Whilst the sales environment remains challenging, Management's prudent controls mean that business performance in the first quarter has met the Board's expectations.

The fundraising in April also provided us with the funds to refurbish our store portfolio, following the success of last year's trial. A further 150 stores are targeted for refresh or refit in the current year, with 50 targeted for 2012/13.

The restructuring of JJB will not be easy or quick and will most likely take three to five years. The retail environment is challenging, will remain so for some time and we face intense competition. But the work undertaken over the past six months, together with the crucial support of all our stakeholders have given JJB a chance to survive and ultimately to prosper and I look forward to working with our management team to make this happen."

Chairman's Statement
2010 was a difficult year for the Company when longstanding, unresolved weaknesses and inefficiencies were exposed in a very challenging retail environment and the business came perilously close to entering administration.

Since becoming Chairman in December 2010, with the support of our shareholders, bankers, key suppliers, landlords and other stakeholders and our colleagues, we avoided administration and have taken a number of significant steps to stabilise the financial position of the business and commence the turnaround of its performance.

In my time as Chairman we have completed:

• Two capital raisings through Firm Placing and Placing and Open Offers raising combined gross proceeds of £96.5million;
• A Company Voluntary Arrangement (“CVA”) with our Landlords enabling us to reduce our overhead base;
• A Capital Reorganisation;
• A transfer to AIM from the main list of the London Stock Exchange; and
• A negotiation of a three year extension to our existing bank facilities.
These actions provide the management team led by Keith Jones with the opportunity to address the weaknesses in our business and effect a turnaround in its operational and financial performance. Our strategy

The turnaround of our business will not be easy and as a consequence will take time. The focus for the remainder of 2011 isto establish a platform for future growth so we can exploit the opportunity in the UK sports retail market for an authentic multi-channel sports retailer providing footwear, apparel, sports equipment and accessories for spectators through to performance athletes nationwide. Key elements of the revised business plan include:

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