Profits tumble at troubled retailer
Profits at scandal-hit Sports Direct have taken a hammering following the collapse in sterling - but it has not stopped billionaire owner Mike Ashley splashing out on a new corporate jet.
The retailer, which has a major base at Wigan’s Martland Park industrial estate, said that underlying earnings plunged 33.5 per cent to £145.3m in the first half of the year, slumping even further on a pre-tax basis, by 57 per cent to £71.6m.
The group, which has endured a long list of controversies over the past months, compounded its PR problems by failing to hedge against the fall in the value of the pound in the immediate aftermath of the EU referendum.
Mr Ashley said: “The last six months have been tough for our people and performance. Our UK Sports Retail business continues to be the engine of Sports Direct, but our results have been affected by the significant deterioration in exchange rates, and our assessment of our risk relating to our stock levels and European stores performance.”
The company said revenue rose 14 per cent to £1.6bn, but warned of a challenging environment which the firm expects to continue into the “foreseeable future”.
Nevertheless, the half year results also reveal that, in order to “facilitate efficiencies”, Sports Direct will be taking delivery of a corporate plane in the coming weeks at a cost of £40m. This adds to a helicopter which is already used by “senior management, employees and our business partners on a regular basis”.
The news comes after a string of controversies for the firm which has seen Mr Ashley hauled before MPs to be grilled over working conditions, the company host a tumultuous “open day” at its HQ, and chief executive Dave Forsey quit - only to be replaced by Mr Ashley.
Mr Ashley sought to address the shambolic year through the trading statement, saying again he would like the firm to become the “Selfridges of sports retail”.