Storms sink profit forecast at Sports Direct

The retail leisure giant, which trades as Sports World and owns a string of well-known brands, has endured a series of controversies since floating last March, losing the confidence of investors in the process.

Today it piled on the gloom by revealing that sales in May, June and July have been poor, blaming the appalling weather. City hopes that it would make a profit of £230million in 2008 have been completely dashed.

Chief executive Dave Forsey said: "The first three months of the current financial year have been exceptionally difficult with the unprecedented weather conditions having an immediate impact on sales."

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He said there would be "limited growth" in next year's profits from the company, which owns the Dunlop, Kangol, Lonsdale and Slazenger brands, among others, and Lillywhites at Piccadilly Circus.

Sports Direct's maiden results as a public company follow a period of intense criticism. The shares have sunk from a float price of 300p, with investors furious at the lack of information about strategy and the refusal of founder Mike Ashley to talk to analysts or the press. Today, they crashed by another 30.5p to 159.25p.

The numbers reported for the year to the end of April were fairly strong - profits rose 38 per cent to £151 million on sales up 13 per cent to £1.35billion. But there is growing concern about the company business model and the activities of Ashley, the deputy chairman.

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Most assume he still runs the business day-to-day, yet he is constantly linked with deals outside the company. He has just bought Newcastle United for £133million and may be eyeing US sports shoeseller Foot Locker.

Today the company revealed that it plans to buy 35 freehold properties from Ashley "in order to avoid any future conflict of interest" - a clear indication that the deputy chairman's interests may not be the same as those of other shareholders.

He owns 57 per cent of the stock, having cashed in the rest at the float to net £930million.

Sports Direct still lacks a chairman following the abrupt departure of David Richardson, who said he could not work with the other executives, Ashley included.

Analysts were deeply sceptical, one pointing out that it is not even clear if the results have been audited or not.

Nick Bubb at Pali International said: "The profit-and-loss account is very opaque and it will be interesting eventually to see exactly how they got there. It doesn't look quite as bad as we had feared at first sight, but many will be disappointed."

In-house broker Merrill Lynch, which was predicting 2008 profits of £250million, will be rushing to rethink its forecasts today.