Sports Direct International Plc, the U.K. discount sports retailer, reported a 29.9% slump in full-year underlying earnings. It also said that with current trading conditions the worst it has experienced in a quarter of a century, it does not expect earnings to grow in its new financial year.


For the year to April 27 2008, the group, which has 375 stores in the UK, 60 overseas and owns such brands as Slazenger, Lonsdale, Donnay and Everlast, made underlying EBITDA (earnings before interest, tax, depreciation and amortization) of $296 million (150 million pounds) against a restated $423 million (214.1 million pounds) a year ago. Results were slightly ahead of a previous forecast. Group revenue fell 6.5% to $2.5 billion (1.26 billion pounds.)


The company, which is 70 per cent controlled by owner Mike Ashley, blamed wet weather, the failure of the Home Nations to qualify for Euro 2008 and the retail environment for its poor performance.


Sports Direct said underlying EBITDA in May and June was “marginally ahead” of the same period last year and the group is currently targeting flat underlying EBITDA for the year to end-April 2009.


“Retailing on the high street is the worst for the 25 years we've been doing it,” said Mike Ashley, deputy chairman, in a conference call. “That's why we think to be slightly up on last year in the first two months (May and June) is actually quite a phenomenal result. If you're managing to keep your head above water in an impossible environment I think that's a very respectable result.”


He noted, however, that comparative numbers for May and June last year were weak. “It was a very different situation a year ago for us. We probably had our eye off the ball about becoming a Plc. Over the last six months we've gone back to our bunker and gone back to basics.”


Dave Forsey, Sports Direct's chief executive, said: “The trading environment in Sports Direct's first year as a listed company has been the hardest we have faced in our history, inevitably impacting our results.

“This is, of course, disappointing, however despite these challenges we delivered slightly ahead of our recent expectations, remaining very profitable and cash generative.”


Underlying profit before tax fell 51.1% to 85 million pounds, while underlying earnings per share was down 47.4% to 8.57 pence. Reported profit before tax was, however, up 96.5% to 119 million pounds.


The group margin fell 70 basis points to 43.6%, reflecting a flat margin in the retail division and a lower margin in the brands division.