Significant Growth At Sports Direct

Published in Company Comment on 13 December 2012

Sports Direct (LSE: SPD) credits the 'Olympic effect' for strong results.

Sports Direct (LSE: SPD), the sports retailer that owns brands such as Slazenger, Dunlop and Lonsdale, released its interim results for the half year to 28 October 2012 this morning, with the company reporting significant growth across all of its divisions. 

At £1,088.9m, total revenue was up 22.5%, with the rise reflected throughout the entire group. UK sports retail was up 18.1%, international retail rose by 11.4% and the brands division advanced 15.7%

In addition, online sports sales surged 54% and now represent 12.5% of total sales in the sports retail division. 

Pre-tax profit was reported as up 25%, at £125.2m, with reported earnings per share up almost 30% at 16.07p.

A slight dip in sports retail margin, down to 41.0% from 41.6% in the same period last year, was attributed to the reduced margin in the 20 former JJB stores that were acquired in September.

The company reported that its plan to expand international retail operations into all 17 eurozone countries within five years remains on schedule, and that it now has three stores in Belgium, two in Portugal, two in Hungary, two in Slovakia, and one each in Slovenia, France, Luxembourg and the Czech Republic.

Although the premium lifestyles division made a loss, the company said it was pleased with the subsidiary's progress, and expected it to report an EBITDA profit for the full year.

Dave Forsey, the chief executive of Sports Direct, commented:

 "The first half has been another record period for Sports Direct with the London 2012 Olympics and Paralympics playing a significant part in the Group's strong results. There is no doubt that Team GB's outstanding performance has helped increase the awareness and popularity of sport across the UK, and that we have maintained our position as the consumers' champion.

 "The Group continues to deliver growth across its divisions and we have maintained our investment in margin, inventory and extra group marketing, while also investing for future growth, particularly in our International and e-Commerce divisions.”

At 403p, Sports Direct’s share price has almost doubled this year, and has increased over 1,200% since a low of 32p in December 2008.  

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> Jon does not own shares in Sports Direct.

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