Sports Direct upbeat as underlying profits take a pounding

Sports Direct has seen its halfyear profits take a knock as the retail heavyweight trimmed its online promotions and shut some stores.

Statutory pre-tax profits tumbled 67.3 per cent to £45.8 million in the 26 weeks to 29 October, results yesterday showed, which boss Mike Ashley put down to “fair value adjustments and transitional factors such as the disposal of assets”.

Last year’s profits were also flattered by the sale of a chunk of shares in rival JD Sports.

UK retail sales slipped 1.4 per cent, mainly due to the reduced online promotional activity, store closures and the weak pound pushing costs up.

Ashley, who also owns New- castle United FC, is attempting to reposition the store estate. He said: “Our high street elevation strategy is currently delivering spectacular trading performance within our flagship stores. We intend to open between ten and 20 new flagship stores next year.

“Whilst our reported profit before tax has been impacted by fair value adjustments and transitional factors such as the disposal of assets in 2017; our underlying profit before tax remains healthy.”

On an underlying basis, pretax profit rose 22.9 per cent to £88m and sales were up 4.7 per cent to £1.7 billion.

The group, which has been dogged by controversy, expects underlying earnings growth for the full year to come within its forecast range of 5 per cent to 15 per cent. 0 The group ranks as the UK’S biggest sportswear retailer