Sports Direct H1 revenues up 2 percent

In the 26 weeks ended October 25,2015, Sports Direct revenues were up 2 percent on a currency neutral basis to 1,433.7 million pounds (2,176 million dollars). Gross margin for the group increased 90 basis points to 44.9 percent as a result of the continued broadening of the product range and on­going investment in group brands.

"The Group has delivered another excellent set of results particularly given the strong comparable sales generated in the build up to the FIFA 2014 World Cup and after a generally mixed summer for the retail sector. Within Sports Retail our commitment to upgrading our store portfolio continues to deliver gross margin growth and is a significant contributor to our strong EBITDA result.We look forward to 2016 with confidence ahead of the Olympic Games in Rio de Janeiro and the 2016 European Football Championships in which England, Wales, Northern Ireland and the Republic of Ireland will be competing,” said Dave Forsey, Chief Executive of Sports Direct International.

Sports retail division on a growth track

Sports retail division achieved sales growth of 2.5 percent on a currency neutral basis against a comparative which included the impact of the FIFA World Cup in Brazil. During the period, gross margin increased 110 basis points to 45.6 percent.

Gross profit on a currency neutral basis increased by 5.2 percent. Sports retail underlying EBITDA grew by 5.5 percent. At period end, the group had 455 stores in the UK excluding Northern Ireland. It is targeting a total of between 30-40 store openings in the UK this year, having opened 28 new stores in the period, including nine relocations, and closing 13. The company also opened five further concessions within Debenhams stores during the period bringing this total to nine including one footwear only concession in Oxford Street.

Online sales continued to grow. Online remains profitable for the Group and it continues to develop the platform in order to exploit this opportunity further. In Europe it opened a further 11 stores across five different countries and closed three stores in two countries. In central Europe it closed two stores in Austria and one store in Belgium and opened six stores in Hungary and one in Poland. In the Baltic states, it opened two stores in Lithuania and one store in both Latvia and Estonia under the Sportsdirect.com fascia and continued to invest in upgrading the existing stores trading under the Sportland fascia.

Through the group's 50 percent shareholding in the Heatons chain, products are retailed within 44 stores in the Republic of Ireland and 15 stores in Northern Ireland, of which 37 operate a sports department and five are standalone sports stores. The Group plans a substantial investment in the Heatons store portfolio over the coming years as it believes that the current sports offering, while competitive, can be improved significantly.

Sales highlights of the premium lifestyle division

Sales in the period were down by 12.2 percent, largely due to the closure of loss­making USC stores since the prior period. Gross margin increased to 41.3 percent. Growth at Cruise, Flannels and Van Mildert also reflects the group's buying disciplines and online expertise. Premium Lifestyle EBITDA losses decreased in FY16 H1 to 5.1 million pounds (7.7 million dollars).

Brands division total revenue increased by 10.2 percent and wholesale revenues were up 11.2 percent due to growth in both Europe and the US. Brands gross margin decreased by 280 basis points to 40 percent and wholesale gross margins decreased 260 basis points to 30.1 percent.

Licensing revenues in FY16 H1 increased 4.6 percent and the company signed 23 new license agreements in the first half of the year.