Sports Direct posts 20% rise in full-year profit

Thursday 17 July 2014 08.51
Sports Direct has been pursuing a number of acquisitions as it looks to tap into the wider European market
Sports Direct has been pursuing a number of acquisitions as it looks to tap into the wider European market

Britain's biggest sporting goods retailer Sports Direct has posted a 20% rise in full-year profit and said it had made up with key supplier Adidas after a recent row with the German sportswear firm.

Sports Direct had criticised Adidas for not supplying it with replica shirts for the World Cup teams it sponsored, due to it being unhappy with the presentation of its stores.

Sports Direct had said it felt the problem was more to do with its discount approach but chief executive Dave Forsey told reporters recent talks had been productive.

"The recent dialogue with Adidas has been encouraging," Mr Forsey said. "They are beginning to understand at the top level within their business the efforts we're making in terms of the stores."

The group, which has over 600 sports stores in Europe, including 27 operating in Ireland under the Sports World brand, said underlying pre-tax profit for the year to 27 April jumped to £249.3m, slightly below analysts' average forecast of £255m.

Its shares rose 1% to 721 pence in early trading.

Group revenue rose 23.8% to £2.7bn, led by strong underlying trade at its British sports retail stores, the contribution of businesses bought in Austria and the Baltic region in May 2013, and a 26.8% rise in online sales.

Sales in fashion and brands were also up, while group gross margin increased 180 basis points to 42.7%.

Sports Direct said trading at the start of its new fiscal year had been in line with its expectations.

It also added that it had again decided not to pay a dividend while it pursues acquisitions, particularly in Europe, where a £40bn sports retail market equates to eight times that of Britain’s.

Mr Forsey would not comment further on plans to reward its founder and deputy chairman Mike Ashley. 

Yesterday Mr Ashley quit a £200m share bonus scheme that, despite much opposition, had been approved by investors just two weeks earlier.