Sports Direct to review dividend freeze after profits surge

 

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The Independent Online

Sports Direct is on track to hit its "super-stretch" profit targets this year, passing the first hurdle that could see it hand founder Mike Ashley a bundle of shares worth £17m.

The sportswear market leader said it was now "certain" of hitting its higher underlying profits target of £225m for the year to 29 April after posting a surge in third-quarter sales.

Sports Direct said it was also reviewing its dividend policy following a hiatus stretching back to December 2008. Its growth is in stark contrast to the troubles at its loss-making rival JJB Sports.

Sports Direct posted a 9.1 per cent surge in group sales to £453.8m for the 13 weeks to 22 January, boosted by "significant" online growth.

Its chief executive Dave Forsey said: "Underlying performance in the period, particularly since December, has outperformed management's expectations.

"In light of this strong performance, the board will be reviewing the group's dividend policy at the end of this financial year." The company had suspended its dividend in 2009 as it focused on paying down debt.

Sports Direct's retail sales rose by 10.2 per cent to £409m over the quarter.

Under the "super-stretch" deal, if the retailer hits four years of profit targets by April 2015, it will hand Mr Ashley, its executive deputy chairman who also owns Newcastle United, 6 million shares, worth £17m at the current share price, in 2018. Mr Ashley has not taken a salary since its floated in March 2007.

The shares rose by 15.2p to 278p yesterday, edging it closer to its float price of 300p.

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