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Sports Direct profits dive in 'hardest year in history'

Profits at Sports Direct dropped by more than half to £85m for the year to April 28 in the company's hardest ever year.

Underlying profit-before-tax at Sports Direct was down 51.1% from £174.5m last year. Sales at the discount sportswear chain dropped 6.5% to £1.26bn over the period, driven by a dip in UK sales, down 10.5% to £957.7m.

Reported profit-before-tax, which includes income from the sale of strategic investments and exceptional costs, was up 96.5% to £119m.

The company said that last year's wet summer, the failure of home nations to qualify for the Euro 2008 football competition, and a consumer downturn had hit the business.

Chief executive Dave Forsey said that the company's first year as a listed company was the hardest in its history.

"This is of course disappointing ,however despite theses challenges we delivered slightly ahead of our recent expectations, remaining very profitable and cash generative," he said.

Margin at UK stores was up to 45.7%, but flat overall, while the branded division's margin was down to 40.2% from 44.2%. Group margin dropped 70 basis points to 43.6% as a result.

Forsey predicted challenging trading conditions going forward but said that EBITDA for the two months of the new financial year were ahead of the same period last year.

He said: "We remain focused on overcoming the current challenges while continuing to grow our business. We made strong progress on this he during the year driving our international interest through the acquisition of Everlast and agreements with Retail Corp and ITAT."

The company said that in the future it would provide UK like-for-like figures which is "relevant tot he business and that is consistent with our long-term objectives".

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