Sports Direct on track despite gloomy outlook

Sports World retailer Sports Direct International today said it would meet profit forecasts despite “increasingly difficult” trading this year.

The group – run by the Newcastle United owner Mike Ashley – has been badly hit by England’s failure to reach the Euro 2008 football championships, but said underlying earnings for the year to April would exceed the £137.7m (€185m) expected by the London market.

In a Christmas trading statement, SDI said sales during the 11 weeks to January 13 were £280m (€376m), with group gross profit of £126m (€169m).

Last month SDI estimated it would suffer an underlying earnings hit of up to £70m (€94m) over the next 12 months because of the England football team’s absence from next summer’s flagship tournament.

Chief executive Dave Forsey said today: “We expect the retail trading environment to become increasingly difficult over the next six months.

“However the resilience of our business gives us the confidence to repeat guidance on full year performance that we gave on December 19.”

In December Sports Direct revealed half-year revenue to October 28 last year of €668m (€897m), down 7%.

Half-year profits at the business, which has major licensing deals with England replica shirt manufacturer Umbro, plunged nearly 70% to £21.2m (€28m) this year, down from £70.1m (€94m).

The company also owns some of Britain’s most popular sports brands including Slazenger, Dunlop and Kangol.

Football-mad Mr Ashley took the business public in February last year, with the flotation price of 300p a share netting him a £929m (€1.2bn) fortune.

The shares have since fallen to less than two-thirds of their float price as the group issued a series of gloomy trading updates.