Sports Direct in good shape

SPORTS Direct, Britain’s largest sport retailer, warned 2011 would be extremely challenging for all retailers as it delivered a trading update yesterday.

The company, controlled by Newcastle United football club owner Mike Ashley, said group sales for the nine weeks ending 26 September were up 5.4 per cent to £295m compared with £218m a year earlier. Gross profit was also up 5.4 per cent to £117m, up from £111m a year earlier. This followed increases of 8.8 per cent and 17.8 per cent respectively in the 13 weeks, which included the sales surge from the World Cup.

Retail division sales for the same period increased 6.9 per cent to £264m compared with £247m for the same period a year ago and retail gross profit increased 6.1 per cent to £105m, up £6m year-on-year.

Dave Forsey, chief executive of Sports Direct, said: “Following the first quarter of our financial year which included the World Cup tournament we remain pleased with the continuing strong underlying performance across all our divisions.”

Forsey added the group’s first half results would be significantly above the corresponding period last year and that the board remained comfortable with targeting a full year earnings before interest, tax, depreciation and amortisation (EBITDA) of £205m despite the tougher conditions expected in 2011.

Sports Direct will release its results for the half-year to 24 October in December. The trading update comes just a day after the Serious Fraud Office announced it had dropped its investigation into Sports Direct and JJB Sport over an alleged cartel with no charges brought.