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Sports Direct profits up 16.9%

Sports Direct has reported a 16.9% rise in underlying pre-tax profit to £146.2m for the six months to October 27, as the sportswear giant said it performed ahead of management’s expectations despite a tough comparative period last year featuring the Olympics.

Group revenues rose 23.5% to £1.35bn while UK sports retail sales were up 13.4% to £903.3m.

Sales at international sports stores increased by 30.8% to £118.5m, while new acquisitions overseas contributed £87.7m. The retailer now trades in 19 European countries.

Sports Direct’s premium lifestyle division, which includes Republic and USC, soared 83.2% to £102.8m following the conversion of 43 former Republic stores to USC shops during the half.

Group gross margin increased 190 basis points to 43.1% while UK sports retail margin rose 150 basis points to 43.8%.

Sales in the brand division which includes Everlast, Dunlop and Slazenger slipped 0.7% to £106.2m for the period.

Online sales grew by 43%, and now contribute 15.5% of total sports retail sales.

Sports Direct chief executive Dave Forsey said:  “The growth in group revenues and EBITDA has been ahead of expectations and achieved against a tough comparative that included the UEFA European Championships and the London 2012 Olympics.

“The performance of sports retail is particularly pleasing with significant growth in the UK, Europe and online. The group’s expansion in Europe has also continued with acquisitions in Austria and the Baltic states. The integration of these acquisitions is progressing and we continue to look for further opportunities across Europe.”

Forsey said that the board is confident of achieving its full year internal EBITDA target of £310m before the costs of its employee bonus share scheme.

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