MIKE Ashley's Sports Direct International is investing in a 30,000 square feet extension at one of its major Scottish city stores as it continues to look at ways to expand its high street presence in the UK and abroad.

 

The company defied poorer than expected football shirt sales, related to England's early World Cup exit, to post a 4.7 per cent hike in pre-tax profits from £143.1 million to £149.7m in the 26 weeks to October 26.

Group revenue 6.5 per cent from £1.35 billion to £1.43bn driven by the company's dominant sports retail outlets which surged 8.3 per cent to £1.23bn.

The continuing growth of the retailer meant it predicted it is "certain" to achieve an earnings target which will see around 3,000 staff received a shares based bonus payout which could be worth up to £34m in total.

Dave Forsey, chief executive, said he was confident of achieving "at least" £360m of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the full-year.

That would be around nine per cent ahead of the prior year.

The company confirmed it is making a major extension to its Argyle Street store in Glasgow which is expected to be finished in spring next year.

Sports Direct said it was seeing growing returns from its click and collect offerings which have been rolled out to around 400 of its 434 UK stores. It says it remains committed to opening between 30 and 40 outlets annually.

It said acquisitions in the UK and abroad remain on the radar with its European portfolio now standing at around 270 locations.

Mr Forsey said: "There's a constant state of activity on M&A across not just sports retail but also brands and the rest of the group. With the European expansion, of course we will be active."

Sports Direct took stakes in Debenhams, Tesco and online retailer MySale in the period. It already has an 11.8 per cent holding in JD Sports as well as an interest in House of Fraser.

A trial of Sports Direct concessions in Debenhams stores has already begun.

The premium brands segment, which includes USC, Cruise and Flannels, saw a 2.8 per cent dip in revenue in the period to £99.9m.

That was attributed to the closure of 20 loss making USC and former Republic stores since the prior year. Margins there also dipped from 43 per cent to 38.4 per cent as a result of stock clearance activity with underlying losses narrowing from £11.9m to £7.8m.

The brands division, which includes wholesale activities and licensing, saw revenue fall 3.9 per cent to £102.1m mainly as a result of a reshaping of the wholesale arm. EDITDA in brands rose from £14m to £15.1m.

The Sports Direct Fitness brand launched in the period has outlets on Argyle Street in Glasgow and in Milngavie among its 14 sites.

The company said: "Both of these sites are former LA Fitness gyms, which Sports Direct acquired this year. The company has acquired 25 former LA Fitness gyms in total.

"The company sees the potential for consolidation in the industry and has an appetite to participate in any future consolidation, but can't comment on any specific plans."

The Sports Direct financial statement noted almost £2.5m of sales to Rangers Retail. Mr Ashley has taken a stake in the Ibrox club's AIM-listed holding company, Rangers International Football Club.

He is also the owner at Newcastle United. Sports Direct was said to have made £1.17m of sales to Newcastle in the period.