Sports Direct raises profit forecast again as sales soar

[Craig 6700]

By Simon English

London Evening Standard

 

Could pantomime villan Mike Ashley emerge as the unlikely hero of the retail sector?

 

The shell-suit and trainers entrepreneur who owns Newcastle United has been a target of City ire since his Sports Direct empire was floated in March 2007 at a price that since seems highly inflated.

 

Profit warnings followed, the shares fell and serious questions about his strategy were asked.

 

Today Sports Direct raised its profit guidance for the second time in two months on the back of soaring sales.

 

Revenue in the 13 weeks to 24 January rose by £15 million to £370 million. It now expects to make full-year profit of at least £160 million, up from the £155 million guided previously.

 

The shares ran up 7p to 104p on the news, still a long way from the 300p float price.

 

More good news came from the Competition Commission, which has approved the firm's acquisition of 31 stores from JJB Sports.

 

Singer Capital analyst Matthew McEachran said: "Given we feel there could be upside to fourth-quarter spending from initial World Cup shopping activity, this is an excellent outcome and raises confidence for the full year."

 

Dark clouds remain however. Sports Direct and JJB are still being investigated by the Serious Fraud Office over price fixing allegations.

[Happy Face 29]

The shares ran up 7p to 104p on the news, still a long way from the 300p float price.

 

It was about 200p when he bought the club.