NEWCASTLE United owner Mike Ashley remains on track for a multi-million pound windfall after his Sports Direct chain continued to beat expectations.
The group, which has nearly 400 stores and owns brands including Slazenger, Donnay and Karrimor, said retail sales rose 10.2 per cent to £408.6m in the 13 weeks to January 22, boosted by strong growth in internet trading.
It is now “certain” of hitting a bonus trigger of underlying profits of £225m for the year to April under the first leg of a three-year reward programme for Mr Ashley, who is executive deputy chairman.
Mr Ashley, who netted £929m in February 2007 after selling 43 per cent of the business he founded, receives no pay, but is now on course to receive six million shares, currently worth £16m, in 2018.
The bonus that Mr Ashley could be in line to pocket has increased by £4m in recent months, reflecting the company’s improving performance on the stock market.
Hitting a lower target of £215m will also be a key milestone in the chain’s staff bonus scheme, which last year paid out more than £40,000 on average to some 2,000 staff.
It is thought to be the largest windfall handed out to shop staff in Britain and has been a large factor in the chain’s strong performance in recent years.
Under the terms of a new scheme introduced last year the company needs to hit targets for four years to trigger a further pay-out.
Gross profits increased 10.2 per cent to £184.4m, as trading since December was better than it expected, and has remained strong since the end of January.
Shares rose six per cent after the group said it will consider a return to making dividend payments later this year.
The group’s shares have nearly trebled in value in the past two years, as its low prices have helped it steal market share from struggling rival JJB Sports.
It has been one of the darlings of the retail sector, despite the gloom surrounding the high street.
Peter Smedley, an analyst at Charles Stanley Securities, said Sports Direct’s website appeals to cash-strapped consumers because it offers “the widest product selection, lowest prices and best availability”.
He added that the staff bonus scheme has been “a game changer”, and continues to incentivise its 2,200 employees to drive its profits growth.
He said: “Investors should not underestimate the major impact of the previous and new schemes and how they have been harnessed on a daily basis to drive operational and financial performance.”