Sports Direct increases profits and joins the fitness market

Sporting goods retailer Sports Direct International plc has achieved growth over the last financial year, increasing profits and diversifying its business by expanding into the fitness industry.

The Derbyshire-headquartered company reported pre-tax profits of £313.4m against last year’s £239.5m, an increase of 30.9% in the 12-month period ending April 26 2015. Furthermore, Sports Direct’s earnings before interest, taxes, depreciation and amortisation (EBITDA) were up by 15.7%, from £331.1m to £383.2m.

Despite the profit increase, Sports Direct plans on cutting next year’s bonus scheme earnings target after it failed to secure the acquisitions needed to boost sales.

For its Sports Retail and Premium Lifestyle segments, the company posted a combined gross profit of £1149.6m, which represents an increase of 8.3% against last year’s figures.

During the period, the company also expanded its offering by establishing a Fitness Division, Sportsdirect Fitness.com, which comprises 27 gyms and two combined gym-retail facilities.

Commenting on the final results, chief executive Dave Forsey said: “The Group has delivered another solid set of results in spite of challenging trading conditions, including the adverse impact on performance during the period of England’s early departure from the FIFA World Cup in Brazil and unseasonably mild weather during Autumn, reducing footfall.

Forsey added: “Trading since the period end has been in line with management expectations and will continue to be driven by improvements in product range and availability, optimisation of both our in-store and web offerings, the introduction of Click and Collect in the UK and further investment in our store portfolio.”

Sports Direct, which was founded by Newcastle United owner Mike Ashley, made a number of investments over the period in a bid to explore new opportunities. The firm transformed its relationship with retailer Debenhams through additional investment in the business, and is now trialling concessions within four Debenhams stores across the UK.