Sports Direct International Plc Successful period reporting a 15.5% growth

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Sports Direct International Plc (LON:SPD), today announced interim results for the 26 weeks to 28 October 2018.

	FY19 H1	FY18 H1 (restated)⁽⁹⁾
	£m	£m	%
Group revenue	1,791.8	1,714.6	+4.5
UK Sports Retail ⁽¹⁾	1,140.2	1,142.3	-0.2
Premium Lifestyle	87.6	67.7	+29.4
House of Fraser ⁽²⁾	70.1	–	–
European Sports Retail	313.1	328.8	-4.8
Rest of World Retail	100.7	78.6	+28.1
Wholesale & licensing	80.1	97.2	-17.6

Group gross margin	41.5%	38.6%
UK Sports Retail ⁽³⁾	40.6%	39.4%
Premium Lifestyle	34.2%	31.8%
House of Fraser ⁽²⁾	28.7%	–
European Sports Retail	43.5%	40.6%
Rest of World Retail ⁽⁴⁾	39.9%	39.8%

Underlying EBITDA (excluding House of Fraser)	180.3	156.1	+15.5
Underlying EBITDA ⁽⁵⁾	148.8	156.1	-4.7

Reported profit before tax	74.4	45.8	+62.4
Underlying profit before tax ⁽⁵⁾	64.4	88.0	-26.8

Reported basic earnings per share	8.7p	4.9p	+77.6
Underlying basic earnings per share ⁽⁵⁾	7.3p	11.3p	-35.4

Underlying free cash generation ⁽⁷⁾	69.0	46.2	+49.4
Net debt ⁽⁸⁾	505.5	471.7	+7.2

Key highlights

· Group revenue increased by 4.5%. Excluding acquisitions, and on a currency neutral basis, Group revenue increased by 0.2%

· UK Sports Retail revenue fell 0.2%, largely due to store closures as part of the continued elevation of the portfolio. Premium Lifestyle rose 29.4% largely due to new Flannels stores

· House of Fraser, acquired 10 August 2018, revenue since acquisition was £70.1m (2)

· European Sports Retail revenue fell 5.0% on a currency neutral basis, largely due to store closures (6)

· Rest of World Retail revenue rose 26.2% on a currency neutral basis, largely due to the Bob’s/EMS stores in the US (6)

· Group underlying EBITDA was down 4.7% to £148.8m. Excluding acquisitions and on a currency neutral basis, Underlying EBITDA was up 14.6%

· Underlying profit before tax down 26.8% to £64.4m

· Underlying free cash generation of £69.0m (7)

· Net debt has increased to £505.5m, from £397.1m as at 29 April 2018 (FY18 H1: £471.7m) (8)

Mike Ashley, Chief Executive of Sports Direct International plc, said:

‘During the reporting period we acquired the trade and assets of House of Fraser and I would like to welcome my new colleagues to the Sports Direct Group. I have made my views clear that I believe the previous House of Fraser senior management team traded the business whilst it was insolvent for a long time, this means we have significant challenges ahead in turning House of Fraser around. However, I genuinely believe we have acquired a fantastic opportunity and with the efforts of Sports Direct and House of Fraser teams, and the support of the brands, local councils and landlords, we can turn House of Fraser into the Harrods of the High Street.

Outside of the House of Fraser acquisition the Sports Direct Group has had another successful period reporting a 15.5% growth in underlying EBITDA to £180.3m. This is impressive in the context of the current struggles in the High Street and shows our elevation strategy continues to go from strength to strength. Excluding House of Fraser we anticipate we will be within our previously communicated underlying EBITDA growth range of 5-15% by year end, including House of Fraser we expect to be behind last year’s result.’