JJB Sports’ interim results were shrouded with controversy when the auditor’s report revealed a dispute with Bank of Scotland over an alleged breach of banking covenants.
The allegations were denied by the retailer, which posted a pre-tax loss of£9.7 million for the 26 weeks to July 27.
Kaupthing analyst Matthew McEachran said: “Whilst management appears to be implementing sensible plans to turnaround Retail and grow Gyms, a dire first-half result, a lack of transparency and increasing consumer volatility means forecasts lack conviction.”
Panmure Gordon analyst Philip Dorgan said that although JJB’s recovery plan is intact, the economy is not. He reduced his pre-tax forecasts by 50 per cent to£15 million for this year and said: “While we expect store refits and a better offer to help mitigate against the consumer recession, JJB is not yet far enough along the road to make a big enough difference.”
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