23rd Apr 2014 08:24
LONDON (Alliance News) - Sports Direct International PLC Wednesday said it delivered double digit growth in its gross profit and sales in the last nine weeks of its financial year, driven by strong retail growth both in its stores and online.
Sports Direct, the UK's biggest sports goods retailer by revenue, said its gross profit for the nine weeks ended March 30 rose 12% to GBP147.0 million, up from GBP131.8 million the prior year, boosted by a 10% increase in group sales during the period to GBP360.0 million.
The sales and gross profit of Sports Eybl & Sports Experts AG, and Sportland International Group AS, which were acquired in June and August last year, were excluded from the figures, it said.
Sports retail sales for the period rose 11% to GBP293.3 million, up from GBP264.3 million the prior year, and gross profit for the division increased by 15% to GBP120.4 million.
Revenue from the group's Brands division increased 13% to GBP39.6 million, up from GBP35.1 million a year earlier, while gross profit from the division remained flat at GBP16.7 million.
Premium Lifestyle sales, which includes clothing stores Republic, in the nine-week period grew by only 0.7% to GBP27.1 million, while gross profit fell 4.1% to GBP9.9 million.
The sports retailer said it is very confident of achieving its full-year internal target for underlying earnings before interest, taxes, depreciation and amortisation of GBP310 million, before the costs for its employee bonus share scheme.
"We retain the ability to invest in margin, inventory and group marketing to deliver long-term sustainable growth," said Chief Executive Dave Forsey in a statement.
Earlier this month, Sports Direct shares were knocked back after the group's shareholders blocked a GBP72.5 million share bonus package for Mike Ashley, the company's founder, deputy chairman and biggest shareholder.
The package was due to be put to a vote at an annual general meeting. However the meeting was cancelled just two days before the vote, after the proposal failed to gather enough shareholder support.
This not the first time that shareholders have rejected proposals for the bonus scheme. Billionaire Ashley, who founded the company back in 1982, has not been paid for his executive role at the company since the business was listed in February 2007, despite two previous attempts by the board to reward him.
"The most disappointing aspect was where large shareholders gave their support only to then vote differently. This outcome is likely to lead to further uncertainty in the future," said Forsey in a statement Wednesday.
Several days after the group's shareholders rejected the bonus package, Ashley sold 24 million of his shares, representing a 4% holding in the firm, through his investment vehicle MASH Holdings, reducing his holding to just under 58% from 62%. The shares were sold at 850 pence per share, resulting in a transaction worth GBP204 million.
The group said it will announce its full year results on July 17.
Sports Direct shares were down 1.8% at 814.95 pence per share Wednesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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