10th Dec 2015 07:18
LONDON (Alliance News) - Sports Direct International PLC on Thursday posted a 25% rise in interim pretax profit despite revenue only ticking up slightly, mainly due to a big increase in investment income and a better gross margin, while it also briefly responded to claims made about the treatment of its warehouse staff.
The FTSE 100-listed sports clothing and equipment retailer said its pretax profit for the 26 weeks to October 25 was GBP187.3 million, up 25% from the GBP149.7 million it made a year earlier, mainly due to the group booking a big gain on its investment income. The company also saw its gross margin improve, up to 44.9% from 44.0% a year earlier.
Underlying pretax profit rose 3.6% to GBP166.4 million from GBP160.6 million.
Revenue was broadly flat in the half at GBP1.43 billion, with sales in its core sports retail business broadly flat, while better brands sales offset a fall in premium lifestyle sales in the half. Sports Direct noted the flat sales were against a tough comparator, as the previous period was boosted by the World Cup.
Sports Direct said sales in Europe and the US were strong in the half, while the premium lifestyle decline was down to the closure of USC stores.
"The group has delivered another excellent set of results particularly given the strong comparable sales generated in the build up to the FIFA 2014 World Cup and after a generally mixed summer for the retail sector," said Dave Forsey, chief executive of Sports Direct.
On Wednesday, the company faced accusations made by The Guardian that temporary staff working at its large warehouse operation in Derbyshire are effectively being paid below the minimum wage and working under very difficult conditions.
Based on reports from two undercover journalists, the paper said warehouse staff at the group are required to go through a series of searches at the end of each shift, for which they are not paid, yet can have their pay docked for clocking in only a minute late.
Though not directly referencing the article, Sports Direct said it had streamlined security operations at the warehouse in order to cut down waiting times for staff leaving the warehouse and said it complies with all legal working requirements. It noted that no warehouse workers are on so-called 'zero hour' contracts.
By Sam Unsted; [email protected]; @SamUAtAlliance
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