JD Sports Fashion has said its acquisition of Tiso Group will not enhance earnings in the short term but the deal brought other attractions.

In its annual results announcement JD said the transaction to take a 60% stake in the Scottish company, which also includes the George Fisher and Alpine Biker subsidiaries, has improved its geographical coverage, increased market share in the outdoor clothing sector and improved its access to brands. Yesterday JD said: "Tiso is an iconic business in the Scottish outdoor world and this acquisition has given us increased buying power, additional management expertise and brand access, as we continue to establish JD Sports Fashion's leading position in the outdoor market."

JD bought the stake in November last year although the Tiso family remain as shareholders with Chris Tiso still running the business. Meanwhile JD said "significant improvement" at Blacks and Millets had lifted the outdoor brands out of the red following a two-year struggle. The Bury-based group said the pair achieved a break-even position in the second half of the year to February 1, compared with losses of £4.9 million a year earlier, and that it expected further improvement this year. Across the group, annual underlying profits were 27% higher at £77m as continued strong growth for core sports retail brands JD and Size? more than offset bigger losses at its fashion division of Bank and Scotts. Revenue was up from £1.26 billion to £1.33bn.

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Profits from the sports stores increased by £15.5m to £93.4m but fashion racked up losses of £6.4m as Bank struggled in the face of a significant shift in the youth market towards own brand and online retailing.

Under a new managing director, JD is working to re-establish Bank's reputation in branded fashion and to produce a faster turnaround of ranges through a more flexible supply chain.

The task of reviving the outdoor brands has been harder than expected after Blacks Leisure, which included Millets, was bought out of administration in January 2012.

The number of stores under the two fascias has been reduced to 156 while offices and warehousing were relocated to JD's own facilities. Executive chairman Peter Cowgill added: "Inevitably, improvements in financial performance lag operational changes but I am encouraged that the Blacks and Millets business achieved a significant improvement in the second half of the year and we expect continued progress in the new financial year."