Mike Ashley has spent considerable time and energy trying to bring back the passion at Newcastle United. With Kevin Keegan in place, he’d be well advised to concentrate on doing the same in the City for Sports Direct.

Panmure Gordon remarks that some analysts seem to have given up covering the stock, while at Merrill Lynch, the investment bank that floated the business, Sports Direct is one of its least preferred retail stocks.

Today’s trading update from the company had little to interest the investment community. There was yet again scant information on trading, and no prior year comparatives nor growth rates for investors to digest.

Sports Direct has encouragingly stuck to earnings guidance given before Christmas but joined the list of retailers warning that trading is likely to get tougher.

Reading between the lines, the figures provided - £280 million of revenue and gross profits of £126 million for the 11 weeks to January 13 - suggest that margins have fallen to 45 per cent, down from 47 per cent in Christmas 2006.

This will concern those thinking about Sports Direct as a potential recovery play in 2008 given Mr Ashley’s aim of raising gross margins. To an outsider the shares look cheap, trading on around 10 times earnings, but until there is more substance to the Sports Direct story, they remain best avoided.

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