Sports Direct outshines rival JJB Sports

Mike Ashley's Sports Direct put struggling rival
JJB Sports in the shade today with a 40% rise in first-half profits and set out plans to extend its successful staff bonus scheme.

The pile-em-high, sell-em-cheap sportswear chain is on track to hit its full-year EBITDA target of £205 million despite a tough start to the New Year in prospect, triggering an average £20,000 payout for the scheme's 2,000 members.

Further awards will be triggered if Sports Direct hits targets of £215 million and £250 million in future years.

Its fortunes contrast with JJB, which warned of a likely breach of banking covenants earlier this month.

Sports Direct said UK retail revenues were up 10% to £644.3 million in the first half.

The owner of Sports World stores and brands including Slazenger and Donnay reported its strongest ever trading day when England played the USA during the World Cup.

The run-up to the football tournament boosted sales but its impact dwindled as England's performance failed to live up to expectations, the company said.

Sports Direct is still cautious over its outlook, with chief executive Dave Forsey saying: "We anticipate the general retail environment in the first few months of 2011 to be tough. However, trading since the end of October has continued to be in line with management expectations."

But Matthew McEachran, an analyst at Singer Capital, said the bonus scheme signalled a further boost to trading prospects.

"All divisions are progressing well and the combination of sharp value and rapidly improving store merchandising techniques is being well received by consumers," he said.