Sports Direct says it will hit profit target

 
City A.M. Reporter
SPORTS Direct, Britain’s biggest sporting goods retailer, said it would meet its year profit target even though it had to fork out a £2m success fee to golfer Darren Clarke for winning the Open Championship in July.

Clarke wears the firm’s Dunlop brand.

Sports Direct, controlled by Newcastle United owner Mike Ashley, said yesterday it was on track to make its 2011-12 target for underlying earnings before tax, interest, depreciation and amortisation (Ebitda) of £215m before staff bonus scheme costs.

It made underlying Ebitda of £200.4m in 2010-11, inclusive of bonus costs.

The firm, which owns Sports World and Lillywhites stores as well as brands including Slazenger, Lonsdale and Dunlop, said total sales rose 0.5 per cent to £410m in the 13 weeks to 25 July, although gross profit fell 5.7 per cent to £174m.

Retail sales increased 0.8 per cent to £368m, against tough comparatives as football’s World Cup was taking place in the same period last year.

Revenue in the brands division fell 2.3 per cent.

Shares in Sports Direct, 71 per cent of which are owned by Ashley, have increased by 85 per cent over the last year.

Most investors in Sports Direct yesterday gave their approval to the firm’s plan to buy 32 retail properties from Ashley, handing the founder a windfall of £86.8m.