Dec 16, 2010
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Sports Direct first-half profit up 40 percent

Dec 16, 2010

Dec 16 - Sports Direct, Britain's biggest sporting goods retailer, posted a 40 percent rise in first-half profit, helped by a boost from this summer's soccer World Cup and the woes of main rival JJB Sports.

Sports Direct

The firm, controlled by Newcastle United soccer club owner Mike Ashley, said on Thursday it had continued to perform strongly and in line with management expectations in the first two months of its second half.

It said that although it was anticipating a tough start to 2011 it was confident of reaching its full-year to end-April target of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of 205 million pounds.

Sports Direct, which owns Sports World and Lillywhites stores as well as brands including Slazenger, Lonsdale and Dunlop, made an underlying profit before tax of 100.7 million pounds for the 26 weeks to October 24, up from 71.9 million pounds in the same period last year.

Revenue increased 8.3 percent to 819.9 million pounds, while gross margin was up 190 basis points to 42.6 percent.

The firm cut its net debt by 25.1 percent to 233.6 million pounds but is not paying an interim dividend.

Shares in Sports Direct have increased by 48 percent over the last year, outperforming a 4 percent fall in the general retailers index. The stock, which floated at 300 pence in 2007, closed at 145.4 pence on Wednesday, valuing the business at 838 million pounds. Ashley owns 71 percent of the equity.

Earlier this month JJB said it was likely to breach the terms of its banking agreement after a period of poor trading.

(Reporting by James Davey, editing by Mark Potter)

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