Sport Direct sales rise 8.4% in first half, debt reduced

Sports Direct, the high street sports retailer, has seen group revenue rise 8.4% in the first half, helped by a strong second quarter and significant growth in online sales.

Meanwhile, the firm was able to cut its net debt by 23.2% from the start of the period. It now stands at £114.3m, down from £148.9m at 24 April.

"This strong performance yet again demonstrates the success of our unique and resilient business model, and was delivered against both a tough FIFA World Cup comparison last year and an especially fragile consumer environment," said Chief Executive Dave Forsey.

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Revenue totalled £888.6m in the six months ended 23 October, up from £819.9m the year before, with UK Retail contributing nearly £700m of that total. International Retail sales grew 22.3% in the period.

Meanwhile, online revenues jumped 85% to £72m and now represents some 9.5% of total Retail sales, up from a 5.4% contribution last year. "we continue to invest in our customer offering and experience to ensure this continues."

However, group gross margins fell 110 basis points to 41.5% but the firm assured that this was in line with expectations - the prior year margin was unusually high in International Retail as a result of a strong hedged rate for US dollar purchases, it said.

Reported pre-tax profit nudged just 0.3% higher to £100.3m, while the underlying figure fell 1.7% to £99m (this excludes profits/losses relating to the IAS 39 fair value adjustment on forward currency contracts in financing income/costs), as operating costs rose.

The underlying EBITDA (earnings before interest, tax , depreciation and amortisation) figure rose 2% to £139.2m and the group maintained its full-year EBITDA target of £215m (before the costs of its employee bonus share scheme).

No dividend was paid.

BC