Staff share bonus scheme helps Sports Direct deliver

The Sports World parent firm – controlled by Newcastle Football Club owner Mike Ashley – reported a 12.4 per cent leap in retail sales to £200m in the nine weeks to March 27, while retail gross profits rose 8.8 per cent to £74m.

It is expected to hand out an estimated £10.8m in shares bonuses for staff this year after recently confirming it was on track to hit its annual profits target.

Dave Forsey, chief executive of Sports Direct, said the bonus share scheme had been a “significant contributor” to its success.

It plans to extend the scheme for the next two years “and beyond”.

Under the terms of the bonus scheme, some 2,000 of its staff will receive up to 75 per cent of their salary paid in shares, if the group meets its target for the year to April after hitting the previous year’s figure.

Sports Direct said in its last trading update it would deliver annual underlying operating profits of at least £205m in the year to April.

Matthew McEachran, at Singer Capital Markets, said Sports Direct’s plans to extend the bonus scheme and include more aggressive targets should help continue the performance.

“Changes to the bonus scheme for 2012 and 2013 should ensure continuing progress, especially going into the year ending 2013 with the Olympics and European football championships,” he said.

Total group sales rose 10.3 per cent in the most recent nine-week period, with gross profit up 7.3 per cent, although analysts said trading since then may have been impacted by the timing of Easter this year.

It is also thought Sports Direct has benefited from heavy promotions and as its rival JJB Sports has struggled.

The majority of the group’s stores trade under its Sports Direct.com fascia, but it also runs outlets trading as Sports World, Lillywhites, Exsports, Gilesports and Field & Trek.

Brand names in its portfolio include Carlton, Slazenger and Donnay.

n Individual Restaurant Company – the firm behind the Piccolino and Restaurant Bar & Grill brands – has received an offer from a consortium including its chief executive Steven Walker valuing the firm at £5.7m.

But the company’s independent directors are not recommending that shareholders accept the offer.

n Hotel chain Park Plaza reported a 132.1 per cent increase in underlying earnings to 37.6 million euros (£33m) in the year to December 31, beating management expectations.

Sales were boosted by the opening of its new flagship London hotel and improved trading conditions, which continued into 2011.