JD Sports raises profit outlook before clash over executive pay

Peter Cowgill expected to come under investor pressure for accepting bonus while taking £100m in Covid support

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First published on Thu 1 Jul 2021 04.43 EDT

JD Sports has raised its profit outlook after the reopening of its stores in the UK before a showdown with investors over the executive’s pay.

The boss of the sportswear retailer, Peter Cowgill, was handed almost £6m in bonuses since February last year, despite the company accepting more than £100m in government support while stores were closed due to the coronavirus pandemic.

The company said trading has been particularly encouraging in the UK since lockdown restrictions were lifted, and most of its 3,300 stores worldwide are open apart from some across the Asia Pacific region.

The reopening of stores and resilient online sales allowed the company to raise its pre-tax profit expectations for the year to “no less than” £550m, up sharply from £324m in the previous year. Shares rose nearly 4%, making JD Sports one of the top risers on the FTSE 100 on Thursday morning.

The retailer set out the better-than-expected outlook before its annual shareholder meeting where Cowgill is expected to come under pressure from some investors for taking a bonus while accepting government financial help.

The company said it accepted the government’s financial support and used it “for the purposes intended” to ensure “the thousands of people that we employ continue to be supported and have sustainable and long-term employment prospects with our business”.

JD Sports will make a decision on repaying the government’s furlough cash when there is “certainty on both the full easing of restrictions and the consequences of any further lockdowns during our peak trading period this winter”.

It said the uncertainty surrounding Covid “has not yet fully passed and the current resurgence in infection rates is affecting our core customer demographic more than was the case previously”.

JD Sports said it also plans to split Cowgill’s role of executive chairman and chief executive before the next annual general meeting and will start a “comprehensive process” shortly.

After the Covid-19 outbreak, Cowgill took a 75% cut to his basic pay – which fell to £700,000 – for several months during the pandemic and his annual bonus was reduced from £1.7m to £1.3m.

However, he took home a £3m special bonus, half of which was paid in February 2020; and a further £1.5m, which had originally been due for payment in October 2020, which was paid in January this year. It is understood a further £1.5m was paid a month later, in February this year.

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