Sports Direct (SPD) delivers early Christmas present to investors

The group reports promising results despite difficult market conditions

Article updated: 16 December 2019 12:00pm Author: Joe Healey


  • Group reports 52% rise in underlying profits before tax, due to improvements at House of Fraser's premium lifestyle brand and European Retail divisions
  • Proceeds from disposals sees group reduce net debt figure to £254mn from £505mn reported in H1 2019
  • Market welcomed results with shares rising 10% in early trading
  • Outlook remains positive with underlying earnings for the full year forecasted to grow by 5-15%
  • Recommendation: we don’t currently have a view on the stock, however for contrarian investors looking to gain exposure to the retail sector; shares would be suitable for investors willing accept medium-high risk.

Overall, these results are extremely promising for a group operating in a difficult market environment and one that has suffered well publicised controversy in recent years. Despite expenditure set to increase in the second half as the group completes a final bullet payment for House of Fraser, free cash flows remain strong which will help offset some of the cost impact. At the same time, seasonality issues are being addressed and it is no surprise investors are excited at this prospect. Improved margins and a more diversified product base should help boost the group and could be a fresh pillar for growth moving into the future.

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All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to To understand how our Investment research team arrive at their views please read our Investment Research Policy.


Joe Healey

Investment Research Analyst

Following his completion of the graduate scheme, Joe is an Investment Research Analyst covering equities. He holds a BA Hons Business Management degree and is currently studying towards CFA Level II after passing CFA Level I in June 2019.

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