Sports Direct has revealed its interim results for the 26 weeks to 28 October on Thursday. The results show that underlying profit before tax has dropped by 26.8% over the period.
Group revenue increased by 4.5%. Excluding acquisitions and at a constant currency, revenue increased by 0.2%. Additionally, UK sports retail revenue dropped 0.2% on the back of store closures. The group’s Premium Lifestyle business was up 29.4% following new Flannels stores.
Earlier this year, Sports Direct acquired House of Fraser after it announced it was going into administration. Earlier in October, Sports Direct also purchased the Glasgow House of Fraser building in a £95 million deal. Since the acquisition, its revenue was £70.1 million.
The group’s underlying EBITDA dropped 4.7% to £148.8 million. Excluding acquisitions and on a currency neutral basis. EBITDA was up 14.6%.
Sports Direct’s underlying profit before tax dropped by over a quarter.
Net debt has increased to £505.5 million. This is up from the £397.1 million reported in April.
Chief Executive of Sports Direct International plc, Mike Ashley, commented on the results:
“During the reporting period we acquired the trade and assets of House of Fraser and I would like to welcome my new colleagues to the Sports Direct Group. I have made my views clear that I believe the previous House of Fraser senior management team traded the business whilst it was insolvent for a long time, this means we have significant challenges ahead in turning House of Fraser around. However, I genuinely believe we have acquired a fantastic opportunity and with the efforts of Sports Direct and House of Fraser teams, and the support of the brands, local councils and landlords, we can turn House of Fraser into the Harrods of the High Street.”
“Outside of the House of Fraser acquisition the Sports Direct Group has had another successful period reporting a 15.5% growth in underlying EBITDA to £180.3m. This is impressive in the context of the current struggles in the High Street and shows our elevation strategy continues to go from strength to strength. Excluding House of Fraser we anticipate we will be within our previously communicated underlying EBITDA growth range of 5-15% by year end, including House of Fraser we expect to be behind last year’s result.”
At 09:28 GMT today, shares in Sports Direct International plc (LON:SPD) were trading at -3.04%.