Sports Direct profits surge

Underlying pre-tax profit increased to £100.7m in the 26 weeks to October 24 as sales soared 8.3% across the group. EBITDA was up 32.5% at £131.3m. No like-for-like figure was given – Sports Direct, controlled by controversial tycoon Mike Ashley, only reports that annually.

The UK has driven the sales growth with revenue up 9.9% at £644.3m which the company attributed to strong sales in the build up to the World Cup. Chief executive Dave Forsey said the tournament contributed £15m to £20m of EBITDA and the sports retailer had its biggest trading day ever on England’s first match of the tournament.

Online sales have also grown and now accounts for 6% of sales in the UK, which the retailer hopes to grow further. Forsey said the online business had benefitted from rebranding the stores’ fascia to read Sportsdirect.com, which has been rolled out across 316 of its 394 stores.

Seymour Pierce analyst Freddie George said the results showed Sports Direct is on track for its EBITDA target of £195m after bonus scheme costs. He said: “The company will continue to benefit from the demise of JJB, which recently issued a profit warning.”

Forsey said that current trading was in line with management expectations. Despite rival sportswear chain JJB Sports warning that it was likely to break its banking covenants as trade suffered due to poor weather, Sports Direct insisted it had benefitted from the cold snap.

“We have lots of weather-appropriate products. We’re well stocked with footwear, winter coats and gloves,” said Forsey.

Despite the promising figures Forsey still expects early 2011 to be tough.

Its international business continued to grow, with revenue up 4.6%. The company has bolstered its international portfolio with the acquisition of a 51% share in Portugal’s third biggest sports retailer Megasport.

Sports Direct currently operates in seven countries across Europe but plans to expand to all 17 countries that have adopted the Euro by 2017.