Sports Direct staff in shares boost

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Some 2,000 staff at Sports Direct were celebrating today after the retailer hit its profits target for the second year in a row, triggering a share payout worth an average of more than £40,000.

The chain - founded and controlled by Newcastle United owner Mike Ashley - revealed underlying profits of £200.4 million in the year to April 24, exceeding its "ambitious" target of £195 million.

As a result, the scheme will pay out shares currently worth an average of £30,960 each. Combined with a payout for meeting the previous year's target, their awards are now worth an average £43,860 - more than twice the average salary of £20,000.

The scheme is set to pay out shares currently worth £87.7 million for the two years - believed to be the largest windfall of its kind in the retail sector.

Staff will not be able to start cashing in the shares for at least a year, by which time they will be worth even more if the rise in the stock continues.

The retailer said the scheme, announced in 2009, was key to its performance in the past two years and announced it is to be continued for the next four years with more stretching targets.

Sports' strong performance comes at a time when many of its high street rivals are struggling due to the squeeze in consumer spending.

The group, which operates more than 350 stores in the UK and owns sporting brands including Dunlop and Kangol, also reported a 10% rise in revenues to £1.6 billion.

Chief executive Dave Forsey said: "This has been an excellent year of growth for the group in what has been a challenging retail environment.

"Key to this growth has been the success of our employee bonus share scheme, which we introduced to focus the whole group on our ambitious growth targets."

He said the company is confident of reaching profit targets of £215 million for the current financial year.

Matthew McEachran, an analyst at Singer Capital Markets, said the World Cup boosted sales in the last year by between £15 million and £20 million.

He estimates that the company will make profits of £222 million in the current year and said it will benefit from the Olympics and the European Championship the following year.

Bottom-line pre-tax profits were down 0.6% to £118.8 million after finance income was lower than the previous year.