THE sportswear group run by Newcastle United owner Mike Ashley said it would meet profit forecasts despite "increasingly difficult" trading this year.

Sports World retailer Sports Direct International (SDI) has been badly hit by England's failure to reach the Euro 2008 football championships, but said underlying earnings for the year to April would exceed the £137.7m expected by the City.

In a Christmas trading statement, SDI said sales during the 11 weeks to January 13 were £280m, with a group gross profit of £126m.

Last month, SDI estimated it would suffer an underlying earnings hit of up to £70m over the next 12 months, because of England's absence from the tournament.

Chief executive Dave Forsey said: "We expect the retail trading environment to become increasingly difficult over the next six months.

"However, the resilience of our business gives us the confidence to repeat guidance on full year performance that we gave on December 19."

The company also owns some of Britain's most popular sports brands including Slazenger, Dunlop and Kangol.

Football-mad Mr Ashley took the business public in February last year, with the flotation price of 300p a share netting him a £929m fortune.

The shares have since fallen to less than two-thirds of their float price as the group issued a series of gloomy trading updates.