Revenue and profits up at Sports Direct

Shirebrook-headquartered retail giant Sports Direct has seen its Group revenue and pre-tax profits increase thanks to a number of recent acquisitions and the £84.9 million sale and leaseback of its Derbyshire distribution centre.

The Group’s revenue now stands at over £2 billion – an increase of 14 per cent – and its underlying profits have risen by 58.1 per cent to £101.8 million. Its profits before tax have increased by 160 per cent to £193.4 million.

The positive impact of acquisitions including House of Fraser and Game Digital has been particularly stark.

Excluding these companies, and on a currency neutral basis, the Group’s revenue decreased by 6.4 per cent due to the continuation of its elevation strategy.

Non-executive chair David Daly said: “The first half of FY20 has shown impressive results across the Group with the Elevation Strategy proving to remain the right plan for the Group’s growth and future. New flagship stores have continued to open including our stunning new Flannels flagship store in September 2019. We have had amazing feedback from various stakeholders including the brands and I want to thank everyone involved in making it happen.

“Whilst revenue across the Group, excluding acquisitions and currency movements, has declined 6.4 per cent, underlying EBITDA excluding acquisitions and currency movements has increased 15.1 per cent, and including acquisitions and currency movements has increased 21.8 per cent, which in a very difficult retail environment is a fantastic effort. This is showing the improved product mix we are getting access to driving higher margins with less units, together with improved processes and procedures driving efficiencies, is showing tangible results.

“In terms of statutory reporting pre IFRS 16, our profit before taxation has risen 160.0 per cent, driven largely by the improved trading result and profit on sale and leaseback of the Shirebrook campus.

“Our net debt at the half year was £254.4 million compared to £505.5 million a year ago as we continue to generate significant cash flows in the Group, and acquisition expenditure and the investment in those acquisitions reducing year on year, although we would note that completion of the purchase, including the final bullet payment, of the Frasers store in Glasgow will mean expenditure will increase in second half of the year.”