Thursday 22 November 2018

Mike Ashley’s Sports Direct set to score full-year profits rise

The sports chain’s profits were dented last year as it struggled to navigate sterling’s devaluation.

Sports Direct will publish its full year results next week (PA)
Sports Direct will publish its full year results next week (PA)

By Helen Cahill, Press Association City Reporter

Sports Direct is tipped to unveil a jump in profits next week as its colourful boss Mike Ashley continues his bid to turn the retailer into the “Selfridges of sport”.

The sports chain’s profits were dented in 2016-17 as it struggled to navigate sterling’s devaluation, but the retailer is expected to show signs of recovery when it unveils full-year results on Thursday.

Sports Direct is forecast to post underlying profit after tax of £103.18 million, climbing 55.1% from £66.5 million the year before, according to consensus estimates.

Revenues are expected to come in at £3.37 billion for the year, up 3.9% from £3.24 billion.

Earnings before interest, tax, depreciation and amortisation are forecast to be £292.1 million, up from £272.7 million, a 7.1% rise year-on-year.

Chief executive Mr Ashley, who founded Sports Direct in 1982, has been shifting his focus to higher end brands recently, with analysts cautiously optimistic about the end results.

George Salmon, equity analyst at Hargreaves Lansdown, said Sports Direct was “showing some signs of progress” when it reported its half-year results in December.

“However, recent conditions on the UK high street have been dire, to put it mildly,” Mr Salmon added.

“The success of the England football team and a bout of nice weather will have done the group a favour, but the plan to become the ‘Selfridges of sport’ still needs to deliver results.”

Investors will also be on the lookout for updates on Sports Direct’s strategic investments.

The company upped its stake in struggling department store chain Debenhams in March, bringing it close to a level at which it must launch a takeover bid.

Mr Ashley also has interests in privately-owned House of Fraser, which recently announced that it was closing more than half its stores.

“The last six months has also seen changes in the stakes Sports Direct owns in other businesses.

“The group now owns 29.7% of Debenhams and has sold its stake in US shoe retailer Finish Line.

“With Debenhams having had a very tough time this year, watch out for commentary on the strategic investment portfolio,” Mr Salmon said.

Press Association

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