Sports Direct staff in line for big bonuses

HUNDREDS of workers at Sports Direct, the retail giant founded by Newcastle FC owner Mike Ashley, had reason to cheer yesterday after a leap in annual profits triggered the first stage of a staff bonus scheme.

The sportswear chain said a 17.3 per cent rise in underlying earnings to 160.4 million would see all permanent staff with at least two year's service, who number more than 2,000, land shares worth 25 per cent of salary, payable in two years.

The group's annual results also revealed a near-50 per cent jump in underlying pre-tax profits to 102.1m - matching City hopes. Comparable retail store sales rose 3.4 per cent in the year to 25 April.

Sports Direct also forecast further growth in the current financial year despite the England team's woeful World Cup performance.

The group, which employs some 17,000 staff at more than 400 stores in the UK and overseas, enjoyed its best-ever trading day amid the football tournament, although demand for England-branded products slumped after the side's early exit.

Clearing this excess stock is likely to offset some of the positive pre-tournament trade.

Chief executive Dave Forsey stressed the group was "operationally stronger than ever".

He said: "Although we shall have to manage the impact of the announced increase in VAT in January 2011, we are confident that initiatives we are taking across all areas of the group, including improved staff training and new, specialist in-store merchandising areas, put us in a strong position for the next phase of our growth."

Sports Direct, which owns Sports World and Lillywhites stores as well as brands including Slazenger, Lonsdale and Dunlop, said revenue increased 6.2 per cent during the year to 1.45 billion.

The firm, with its busy, pack 'em high shops, has been one of the more resilient retailers during the downturn, outperforming its chief rival, JJB Sports, which only just avoided administration last year.

Although net debt was cut by almost 28 per cent to 311.9m, Sports Direct again passed on paying a final dividend.

Shares in the group, which floated in 2007, have increased by about 30 per cent over the past year.

Last September, probes were launched by the Office of Fair Trading (OFT) and the Serious Fraud Office (SFO) into allegations of anti-competitive activities and fraud in the UK sports retail market.

Sports Direct, in which Ashley has a 71 per cent stake, commented: "While we have heard nothing from the OFT, we have provided the SFO with all the information they have required to date, and we have reason to hope that the investigation may be concluded in the autumn of this year."

Its bonus scheme - introduced last year - means that if Sports Direct meets the current year's earnings goal and other performance measures, eligible staff will be in line for another shares windfall worth 75 per cent of base pay.