Sports Direct profits predicted to recover

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Sports Direct is expected to show recovering sales and profits amid its full year results next week.

Following a turbulent 2016-17 in which the sportswear retailer’s margins were heavily dented by the fall in the sterling, analysts are expecting to see underlying profits to jump 55 per cent to £103.18 million.

Meanwhile revenues are tipped to grow 3.9 per cent to £3.37 billion and EBITDA is due to rise 7.1 per cent to £292.1 million.

In December the sportswear retailer reported an underlying pre-tax profits rise of 22.9 per cent to £88 million, but pre-tax profits tumbled 67.3 per cent to £45 million due to “fair value adjustments and transitional factors such as the disposal of assets”.

Hardgreaves Lansdown’s equity analyst George Salmon said Mike Ashley’s company was “showing some signs of progress” but that £recent conditions on the UK high street have been dire, to put it mildly.”

“The success of the England football team and a bout of nice weather will have done the group a favour, but the plan to become the ‘Selfridges of sport’ still needs to deliver results,” he added.

“The last six months has also seen changes in the stakes Sports Direct owns in other businesses.

“The group now owns 29.7% of Debenhams and has sold its stake in US shoe retailer Finish Line.

“With Debenhams having had a very tough time this year, watch out for commentary on the strategic investment portfolio.”

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