Sports Direct sees profits halve

Sports World is part of Mike Ashley's Sports Direct empire

The UK's biggest sports goods retailer Sports Direct has said its underlying annual profit has halved to �85m.

The company, controlled by Newcastle United owner Mike Ashley, said trading conditions were the hardest the firm had seen in its 25-year history.

The retailer blamed England's failure to qualify for Euro 2008, a wet summer in 2007 and weak consumer confidence for a 10% drop in UK sales.

The news pushed shares in Sports Direct down 9.8% to 64.75p.

The trading environment in Sports Direct's first year as a listed company has been the hardest we have faced in our history Dave Forsey, Sports Direct chief executive Sports Direct share price

The underlying profit of �85m excluded profit gained from the sale of investments.

Tough trading

Sports Direct said it expected conditions to get worse in the short term as consumers cut back on spending amid rising fuel, food and mortgage costs.

"The trading environment in Sports Direct's first year as a listed company has been the hardest we have faced in our history," said chief executive Dave Forsey.

The company hopes to counter weak UK sales by expanding to faster growing markets overseas, such as China.

Mr Ashley, the firm's billionaire founder, still controls 70% of the company. He made �929m when he floated the company in February 2007.

However, Sports Direct's share price has sunk over the past year following a series of profit warnings.

The former chairman David Richardson quit just three months after the flotation.

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