Sports Direct faces tax bill from 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.
The group also said its finance chief Jon Kempster will step down in September.
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Shares in Sports Direct were rocked yesterday after the company again delayed publishing its latest financial results. The results were published in the early evening. Shares have fallen 44pc over the past year.
When the results did come, they included a warning that turning around House of Fraser after rescuing the department store chain “will not be quick and it will not be easy”.
“On a scale out of five, with one being very bad and five being very good, House of Fraser is a one,” Sports Direct said. “If we had the gift of hindsight, we might have made a different decision in August 2018,” it added.
The £90m (€100m) acquisition dragged down core earnings by 6pc.
The group said it made underlying earnings before interest, tax, depreciation and amortisation (ebitda) of £287.8m in the year to April 28.
The company also revealed it had received a €674m notice from the Belgian tax authorities in relation to a tax bill.
Sports Direct said it is not a formal tax assessment but a “proces verbal”, and that the group will enter mediation to respond to authorities’ questions.
It said it believes it is “less than probable” that material VAT and penalties will be due in Belgium.
Additional reporting Reuters