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Sports Direct profits slashed as Ashley promises ‘Selfridges of sport’

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Sports Direct has reported a 58.7% drop in profits before tax, with founder and CEO Mike Ashley blaming a weak pound sterling.

The news came amid the retailer’s preliminary results for the year ended April 30th, and also saw group revenue rise by 11.7%. Net debt rose to £182.1m, up from £99.7m in the previous year.

“Sports Direct is on course to become the ‘Selfridges’ of sport by migrating to a new generation of stores to showcase the very best products from our third-party brand partners,” said Ashley. “We have invested over £300m in property over the last year, and I am pleased to report that early indications show that trading in our new flagship stores is exceeding expectations.

“We will continue to invest and make decisions for the long term, whilst trying to conservatively manage the currency volatility that is reflected in our full year results. As previously announced, the devaluation of sterling against the US dollar has led to a significant impact on EBITDA and profits in FY17. We have put in place hedging arrangements to minimise the short-term impact of currency volatility, but like many UK retailers we remain exposed to medium/long term currency fluctuations. Our results were also impacted by provisions and depreciation charges.

“I would like to thank all our people at Sports Direct for ensuring that we continue to move forward together whilst elevating our retail proposition.”

The group has spent much of the year in the headlines for its treatment of workers and Ashley’s colourful conduct as reported in recent High Court proceedings.

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