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Sports Direct profits flat due to tough comparisons

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Sports clothing and equipment retailer Sports Direct saw a 8.4 per cent rise in its overall revenues for the first half of its financial year, it was announced today.

Profits rose just 0.3 per cent to £100.3 million for the 26 weeks ending October 23rd 2011, and underlying profit before tax was actually down 1.7 per cent year-on-year but the figures represent a resilient performance considering the strong sales seen last year.

Gross margin was down 110 base points during the period, mostly due to significant discounting in the group’s UK operations, however online sales grew an impressive 85 per cent in H1.

Dave Forsey, CEO of Sports Direct, said: “This strong performance yet again demonstrates the success of our unique and resilient business model, and was delivered against both a tough FIFA World Cup comparison last year and an especially fragile consumer environment.

“The board remains very confident of reaching our full year EBITDA target of £215 million (before scheme costs) and we believe our Employee Bonus Share Schemes continues to underpin our performance.”

In July the retailer unveiled an unprecedented bonus scheme which will see around 2,000 staff members receive 75 per cent of their base pay in shares of £1.25 over the next two years.

EBITDA rose two per cent in the first half and reported earnings per share increased 3.2 per cent to 12.54p, while the group’s store portfolio grew by nine outlets over six months and it acquired the remaining worldwide rights for the No Fear brand.

No interim dividend has been paid out to the firm’s shareholders due to the challenging market but its net debt has been reduced by 23.2 per cent to £114.3 million in the half.

Published on Thursday 15 December by Editorial Assistant

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