Retail giant Sports Direct hit with €674m tax bill in Belgium
Billionaire Mike Ashley’s retail giant Sports Direct has been hit with a €674m tax bill in Belgium, and admitted that buying House of Fraser may have been a bad move.
Shares in Sports Direct were rocked on Friday after the company again delayed publishing its latest financial results. The results were published in the early evening.
Shares have fallen 44pc over the last year.
When the results did come, they included a warning that turning around House of Fraser after rescuing the department store chain last year "will not be quick and it will not be easy".
"On a scale out of 5, with 1 being very bad and 5 being very good, House of Fraser is a 1," Sports Direct said.
"If we had the gift of hindsight we might have made a different decision in August 2018," it added.
The £90m acquisition dragged down core earnings by 6pc.
The group said on Friday it made underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of £287.8m in the year to April 28, the sports wear chain’s own core earnings had held up well.
The company also revealed it had received a €674m notice from the Belgian tax authorities in relation to a tax bill. Sports Direct said the notice is not a formal tax assessment but a "process verbal" whereby the group will enter a mediation in order to respond to the authorities' questions and provide them with documentation.
It said it believed that it is "less than probable" that material VAT (sales tax) and penalties will be due in Belgium as result of the audit.
Sports Direct's results were due on July 18 but the company and auditor Grant Thornton delayed publication in order to prepare the accounts, initially until 6am on Friday and then again until after 4pm.
(Additional reporting Reuters)