Sports Direct said that it's sticking to its full-year targets, despite a relatively subdued first half that saw underlying pre-tax profits slip by 1.7 per cent to £99m.
Management at the sportswear retailer said that the figures were in line with expectations, and that the apparent slowdown was the result of a strong comparative performance a year earlier, driven by the soccer World Cup. Management added that, with a highly incentivised workforce, it was also "very confident" of hitting its £215m cash profits target. A new scheme has been introduced for employees, as a well as another that will see £12m paid to 71 per cent shareholder and executive deputy chairman Mike Ashley in 2018, should a series of "stretch targets" be met.
The group also believes that it stands to benefit from the run-up to the Olympics and European Championships next year, and management is evaluating a number of investment opportunities which could accelerate growth, although have ruled out a takeover of ailing Blacks Leisure.
Broker Seymour Pierce expects full-year EPS of 17.9p (from 16.8p in 2011), although says the company has "a lot to make up in the second half".
SPORTS DIRECT INTERNATIONAL (SPD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 198p | MARKET VALUE: | £ 1.14bn | |
| TOUCH: | 198-199p | 12-MONTH HIGH: | 270p | LOW: 142p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 13 | |
| NET ASSET VALUE: | 72p* | NET CASH: | 27% | |
| Half-year to 23 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 820 | 100 | 12.2 | nil |
| 2011 | 889 | 100 | 12.5 | nil |
| % change | +8 | - | +2 | - |
*Includes intangible assets of £217m or 38p a share | ||||
