LONDON (dpa-AFX) - Sports Direct International Plc (SPD.L) on Thursday reported a slight increase in first-half pre-tax profit, as strong revenue growth across all divisions were almost offset by margin erosion. Underlying profit declined from last year, while earnings per share increased. The company said it 'delivered strong results in line with management's expectations.' Further, the sporting goods retailer backed its EBITDA forecast for fiscal 2012 and 2013.
First-half reported pre-tax profit edged up 0.3 percent to 100.34 million pounds from 100.01 million pounds last year. Underlying pre-tax profit, which excluded certain items, declined 1.7 percent to 99 million pounds from 100.7 million pounds a year ago.
On an after-tax basis, profit for the period attributable to equity holders stood at 71.30 million pounds or 11.80 pence per share, higher than 69.09 million pounds or 11.43 pence per share a year earlier. On an underlying basis, basic earnings per share improved 1.2 percent to 12.38 pence from 12.23 pence in the earlier year period.
Group revenue for the 26 weeks to October 23 totaled 888.64 million pounds, 8.4 percent higher than prior year's 819.89 million pounds.
The company said the results are 'particularly pleasing against the strong comparatives last year that included the uplift from the FIFA World Cup and the revenue uplift was supported by increases across all its units.'
UK Retail revenues increased 8.2 percent to 697.1 million pounds, and International retail revenues climbed 22.3 percent to 81.3 million pounds. Revenues from Brands rose 2 percent from last year to 92.4 million pounds. Online sales surged 85 percent.
Group gross margin declined 110 basis points to 41.5 percent from 42.6 percent a year ago as a result of our continued investment in margin..
Underlying EBITDA (pre scheme costs) increased 2 percent to 139.2 million pounds from 136.5 million pounds in the prior year.
During the period, Sports Direct reduced its net debt by 23.2 percent to 114.3 million pounds.
Dave Forsey, Chief Executive said, '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. The Board remains very confident of reaching our full year EBITDA target of £215m (before scheme costs) and we believe our Employee Bonus Share Schemes continues to underpin our performance.'
Sports Direct also said that the Board is confident of reaching 250 million pounds underlying EBITDA target (before scheme costs) for the full year 2013, citing the opportunities in 2012 with the busy Summer of Sport including both the UEFA European Championships and the London Olympics.
Regarding dividend, the company said its Board believes that it would be inappropriate to reinstate regular annual dividends in the near term as there are several potential investment opportunities available to boost underlying growth prospects, and considering the current debt market environment.
SPD.L is currently trading at 200.10 pence, up 0.60 pence or 0.30 percent.
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