* Earnings short of forecasts, outlook downbeat
* Margins squeeze from fall in the value of pound
* Shares 8.5 pct lower, down more than half in 12 months (Releads, adds share price fall, analyst reaction)
By Paul Sandle
LONDON, Dec 8 (Reuters) - Sports Direct ended atough 2016 with a warning that trading was not going to get anyeasier next year after a slump in first-half profit, sparkinganother fall in its shares.
The sportswear chain founded by Newcastle United soccer clubowner Mike Ashley was badly caught out by the fall in the poundwhich followed Britain's vote to leave the European Union inJune as it pays for its own-brand stock from Asia in dollars.
Sports Direct said on Thursday this had had a significantimpact and its underlying profit before tax fell 57 percent to71.6 million pounds ($91 million) in the 26 weeks to Oct 23.Group revenue increased by 4.2 percent on a currency neutralbasis.
The period coincided with a period of intense political andpublic scrutiny of the retailer, which is still battlingcriticism of its working practices and treatment of workers.
Ashley, who owns 56 percent of the company and took over aschief executive after long-time stalwart Dave Forsey resigned inSeptember, acknowledged the last six months had "been tough forour people and performance".
"What matters most to me is how tough the last year has beenfor the people who work at Sports Direct," he said.
British lawmakers criticised the company in July for"appalling" working conditions "closer to that of a Victorianwarehouse than that of a modern retailer".
An independent review commissioned by the company found"serious shortcomings" in practices at its warehouse inShirebrook, central England, which it is taking steps to tackle.
Staff may have one new perk, however, the opportunity tocharter at market rates the group's new corporate jet, which itis buying for $51.1 million.
Sports Direct said the plane, along with the helicopter italready owns, will help it "operate efficiently across itsglobal footprint".
Shareholders have felt the impact on the group's reputation,which combined with the damage from the Brexit vote has led to amore than halving of its share price over the last 12 months.The stock was trading down 8.5 percent at 291 pence at 0924 GMT.
The group said full-year 2017 underlying core earnings wouldbe around the bottom of its guidance in October of a rangebetween 265 million and 285 million pounds as it saw no let upin the difficult conditions facing it in the medium term.
Analysts at RBC Capital Markets, who have an underperformrating on the stock, said it would be difficult to pass on thecurrency cost to customers without a significant impact on itsvolumes as its shoppers tended be very price sensitive. ($1 = 0.7906 pounds) (Editing by James Davey and Alexander Smith)
