An­a­lysts tip Sports Di­rect to re­veal signs of re­cov­ery

Yorkshire Post - - BUSINESS -

SPORTS DI­RECT is tipped to un­veil a jump in prof­its next week as its colour­ful boss Mike Ash­ley con­tin­ues his bid to turn the re­tailer into the “Sel­fridges of sport”.

The sports chain’s prof­its were dented in 2016-17 as it strug­gled to nav­i­gate ster­ling’s de­val­u­a­tion, but the re­tailer is ex­pected to show signs of re­cov­ery when it un­veils full year re­sults on Thurs­day.

Sports Di­rect is fore­cast to post un­der­ly­ing profit af­ter tax of £103.18m, climb­ing 55.1% from £66.5m the year be­fore, ac­cord­ing to con­sen­sus es­ti­mates.

Rev­enues are ex­pected to come in at £3.37bn for the year, up 3.9% from £3.24bn.

Earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion are fore­cast to be £292.1m, up from £272.7m, a 7.1% rise year-onyear.

Chief ex­ec­u­tive Mr Ash­ley, who founded Sports Di­rect in 1982, has been shift­ing his fo­cus to higher-end brands re­cently, with an­a­lysts cau­tiously op­ti­mistic about the end re­sults.

Ge­orge Salmon, eq­uity an­a­lyst at Har­g­reaves Lans­down, said Sports Di­rect was “show­ing some signs of progress” when it re­ported its half-year re­sults in De­cem­ber.

“How­ever, re­cent con­di­tions on the UK high street have been dire, to put it mildly,” Mr Salmon added.

“The suc­cess of the Eng­land foot­ball team and a bout of nice weather will have done the group a favour, but the plan to be­come the ‘Sel­fridges of sport’ still needs to de­liver re­sults.”

In­vestors will also be on the look­out for up­dates on Sports Di­rect’s strate­gic in­vest­ments.

The com­pany upped its stake in strug­gling depart­ment store chain Deben­hams in March, bring­ing it close to a level at which it must launch a takeover bid.

Mr Ash­ley also has in­ter­ests in pri­vately-owned House of Fraser, which re­cently an­nounced that it was clos­ing more than half its stores.

The last six months has also seen changes in the stakes Sports Di­rect owns in other busi­nesses.

Plans to make Sports Di­rect the ‘Sel­fridges of sport’.

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