Sports Direct has seen its profits more than halve after it was left 'exposed' by the fall in sterling following the EU referendum.

The scandal-hit retailer, owned by Mike Ashley, reported a fall in underlying pre-tax profits to £113.7m for the year to April 30.

Newcastle United owner Mr Ashley warned that 'we remain exposed' despite action taken by the group to limit the impact of the pound's plunge against the US dollar.

The group, which sources many of its branded goods in US dollars from Asia, said it was 'optimistic' for the year ahead, targeting underlying earnings growth of between 5% and 15% despite ongoing pressure from the pound.

It said the rollout of a new store format – touted by Mr Ashley as the 'Selfridges of sport' concept – was bearing fruit, with better-than-expected early results.

Mr Ashley said: 'However, we will continue to be conservative in managing for the medium to long term, which may result in short-term fluctuations in underlying EBITDA (earnings), particularly given the continued uncertainty surrounding Brexit.'

Like-for-like retail sales edged 0.3% higher over the year, while total revenues rose 11.7% as its international sales benefited from weaker pound.

Sports Direct warned after last June's EU referendum that profits would be hit because the company failed to hedge against the fall in sterling in the immediate aftermath of the vote, meaning the weak pound impacted its product-buying power.

Its financial troubles have come amid a storm of controversy surrounding Sports Direct and Mr Ashley.

The 52-year-old tycoon has been embroiled in a court case this summer with an investment banker over a £15m deal allegedly struck in a London pub, with Mr Ashley still awaiting the verdict.

Sports Direct is also continuing to recover from the damage to its reputation after allegations last year over working practices at its Shirebrook headquarters in Derbyshire, with Mr Ashley hauled before MPs for a grilling.

The group, which marks 10 years as a listed company in 2017, said on reporting results that it had 'made positive progress across the business as we continue to strive to ensure that all of our people are treated with dignity and respect'.

Chairman Keith Hellawell insisted Sports Direct is a company of which 'Britain can rightly feel very proud'.