Sports Direct have released their latest financial figures this morning.
Their profits before taxation dropped by 72.5% but before anybody starts celebrating the demise of Mike Ashley…
Sports Direct claim that this is mainly due to last year’s profit being higher than would have been expected due to selling off Dunlop, as well as shares in their very successful rival, JD Sports.
Losses at Debenhams have also hit them in these latest figures.
Sports Direct claim that their underlying performance is actually very positive.
However, the markets weren’t impressed with the figures or what Mike Ashley and his Sports Direct minions had to say, the share price falling from a Wednesday close of 434p, to currently (at 9.30am on Thursday) be only 405p, losing around 7% of the share price.
From Sports Direct Preliminary Results statement:
‘In terms of statutory reporting, our profit before taxation has reduced by 72.5%, which arises predominantly from the profit on sale of the Dunlop business and the profit on the sale of JD Sports shares included in the results for the prior period and the recognition of the net losses on our strategic investment in Debenhams in the current period.’
My eye was caught though by a couple of things in this Sports Direct update, including this:
Mike Ashley, Chief Executive:
“I am particularly pleased that Sports Direct has not only been named among the ten companies with the most improved reputation in the UK, but also that we were ranked among the top five in an index of international retailers*.
When it comes to ‘improved reputation’ I would love to know how they measure that…
As well as Ashley himself, the non-executive chairman, Keith Hellawell, also mentions the alleged ‘improved reputation’, interesting though that he also talks about claims of Mike Ashley as a ‘pantomime villain.’
Despite claims to the contrary, I think Mike Ashley is quite happy for him to be talked of as a ‘pantomime villain’, because this kind of suggests a more jokey image than the actual truth, which is the ruthless tyrant that both Newcastle fans and the vast majority of Sports Direct staff (and customers) recognise.
From the Newcastle United perspective, we continue to be one of the biggest positives for Sports Direct shareholders.
Despite the club stating back in April 2016 (a month after Rafa Benitez arrived, incidentally) that Sports Direct were going to start and pay for the massive free advertising and promotion that NUFC give Sports Direct and associated brands, no such thing has happened.
I think we (Newcastle fans) all know our place in Mike Ashley’s scheme of things.
Keith Hellawell, Non-Excecutive Chairman:
Finally, I would like to say how pleased I was that our year-end in April coincided with publication of an announcement by the Reputation Institute, which named Sports Direct as among the ten UK companies with the biggest reputation improvements during 2017 to 2018.
In June 2018, the Company was also ranked ahead of companies like Apple and John Lewis in an index of international retailers, which was published by Loqate GBG in partnership with Planet Retail RNG and Retail Week Connect. Whilst there is no room for complacency, it is refreshing to see this independent recognition of the work we have undertaken to ensure that our working practices and corporate governance are aligned with our values.
I note that various commentators in the past have sought to portray Mike Ashley as a so-called ‘pantomime villain’.
However, since Mike became Chief Executive, the Company has initiated a process of transformation to the benefit of all stakeholders. This has seen dynamic implementation of our elevation strategy led by Michael Murray.