Golden Olympics helps Sports Direct

By GARETH MACKIE
Published on 10/12/2012 00:00

MIKE ASHLEY’S Sports Direct International is expected to unveil higher half-year profits this week as it benefited from Olympics fever and the demise of rival JJB Sports.

Sports Direct, which has nearly 400 stores and owns brands including Donnay, Karrimor and Slazenger, is predicted to report a 20 per cent rise in underlying earnings to £169 million on Thursday.

Chief executive Dave Forsey said in October that recent trading had been buoyed by demand for products linked to the London Olympics and an “excellent” back-to-school period. The group has bought 20 stores from JJB’s administrators, but this still meant the closure of a further 133 sites with the loss of around 2,200 jobs.

Leisure group Whitbread will reveal further strong growth in sales at its coffee business Costa tomorrow amid ongoing speculation a demerger is on the cards.

Costa, which has nearly 1,400 outlets in the UK, is forecast to reveal like-for-like sales growth of 6 per cent in the third quarter. Numis analyst Wyn Ellis said: “If Costa can demonstrate that the brand has legs in international markets, then the earnings growth potential over the medium term should be transformational, paving the way for a possible spin-off.”

Tomorrow also sees a first-half trading update from transport group Go-Ahead, which runs the London Midland, Southeastern and Southern train franchises through its Govia joint venture.

The firm is seeking to grow profits at its bus operations, which carry around 1.7 million passengers a day, to £100m by 2015-16. Bus profits rose 7.6 per cent to £691.3m last year, and analysts at Nomura recently upgraded their recommendation from “neutral” to “buy”, adding that the firm has “a self-help bus story that should offer underlying earnings momentum over the coming years”.

Half-year results from SuperGroup, owner of the Superdry fashion label, are predicted to show a 33 per cent rise in pre-tax profits to £17.4m as colder weather boosted sales of its coats and hooded tops.

However, Wednesday’s figures will be flattered by soft sales a year ago, when the company – which started life as a market stall in Gloucestershire – was hit by problems with new warehouse management systems.