UPDATE 1-Online demand helps boost Sports Direct profit
LONDON Dec 12 (Reuters) - Britain's biggest sporting goods retailer Sports Direct said growing online demand for its discount offerings helped boost first-half profit, putting it in a strong position to find further expansion opportunities across Europe.
The group, which has over 600 sports stores in Europe, including 400 in the UK, said on Thursday core earnings for the six months to Oct. 27 was 183.3 million pounds, up 12.3 percent on a year ago and broadly in line with analysts' forecasts.
Underlying pretax profit rose 17 percent to 146.2 million pounds, below analyst expectations however, after losses in the smaller premium lifestyle unit increased by 10 million pounds to 11.8 million due to restructuring costs and losses related to the group's acquisition of Republic in February.
Sports Direct said it expected these to reverse in the second half.
"Solid delivery from Sports Direct but the rhetoric on current trading is not as bullish as usual and we are shaving forecasts (admittedly from the top of the range)," Oriel Securities said. "The shares' momentum is unlikely to persist given the inline nature of the results."
The group said that following the better-than-expected performance in the first half, trading had now reverted to management's original expectations.
Shares in Sports Direct, controlled by billionaire Newcastle United soccer club owner Mike Ashley, were down 3 percent to 747 pence at 0839 GMT, having almost doubled this year.
The group, which entered Britain's blue-chip FTSE 100 index in September, has grown rapidly during the downturn through a mixture of acquisitions, expanding online sales and the demise of rivals like JJB Sports.
Online sales were up 43 percent, making up 15.5 percent of sports retail sales.
The group now wants a greater presence across Europe where it operates in 19 countries, and reiterated on Thursday that it would not resume paying a regular dividend while it evaluated investment opportunities.
The firm said it was confident of reaching at least its full-year target of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of 310 million pounds, before a charge for bonus share schemes.
It added its Finance Director Bob Mellors would retire at the end of December on health grounds.
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