Investor relief lifts Sports Direct shares
(Adds detail, company comment)
By Marc Jones
LONDON, Sept 10 (Reuters) - Shares in Sports Direct (SPD.L) lifted on Monday as investors breathed a sigh of relief that the retailer had not issued another profit warning following a string of bad news and criticism since it floated in February.
Shares in the firm, Britain's biggest sports retailer, rose 4 percent as it said trading since the end of July had improved, although it warned that market conditions remained difficult.
In February, Sports Direct floated at 300 pence a share, netting 929 million pounds ($1.9 billion) for founder Mike Ashley. Since then they have plunged to less than half of that after a string of bad news.
Last month it said wet weather had hit sales and warned there would be little earnings growth this year.
It said on Monday that it still held that view.
"The company stated that it's pre-exceptional EBITDA for 2007/8 should show limited growth from the results reported in the year to 29th April 2007, and we remain of that view," the firm said in a statement.
"The trading performance will come as a relief," said Seymour Pierce analyst Richard Ratner.
Sports Direct, and the owner of the Sports World and Lillywhites chains, said total group sales for the 13 weeks to July 29 were 335 million pounds ($677.3 million) while group gross profit was 149 million pounds.
It did not give comparable figures for the previous year.
Since listing the firm has spent over 260 million pounds taking stakes in sports equipment groups Adidas (ADSG.DE) and Amer AMEAS.AG, has bought back 62 million pounds of its shares and has postponed plans to purchase 35 properties from Ashley.
In June, Ashley also bought Premier League soccer side Newcastle United for 134 million pounds.
The firm, and reclusive tycoon Ashley, have ruffled the feathers of city institutions, which have scorned the firm for its plummeting share price and unorthodox practices. Ratner added that the firm was still not giving investors enough information.
"Until the requisite information is given and the company behaves more conventionally, institutional investors are likely to steer clear." he said.
((Reporting by Marc Jones, editing by Quentin Bryar, Paul Bolding; Reuters Messaging: marc.jones.reuters.com@reuters.net; tel +44 20 7542 2861)) Keywords: SPORTS DIRECT TRADING/
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