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Financial journalists savage Mike Ashley and Sports Directs as annual results delayed (again)

1 year ago
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Mike Ashley treats Newcastle fans with contempt but has a more difficult job treating people the same with Sports Direct.

Not that it stops him of course but there are certain things he can’t avoid when it is a case of a company that has other shareholders and the City of London to deal with.

The Sports Direct annual results were due to be made public earlier this month but SD were forced to release a statement on 15 July 2019 (see below) saying they were delaying publication until today (26 July 2019).

This was then confirmed on Wednesday (24 July 2019) by Sports Direct:

‘Further to its announcement of 15 July 2019, Sports Direct confirms that the Company’s audited results will be published on 26 July 2019.

The accounts and audit are at an advanced stage and the results are expected to be within the guidance issued by the Company on 13 December 2018.’

However, when Friday morning arrived and no annual results published at 7am as promised, the financial/city journalists far from happy…

‘No news is…. errr…bad news? Sports Direct delays its results AGAIN without guidance. Originally due July 15th. Stock market now open, expect shares to be volatile.’

‘This is crazy. On my way to Sports Direct presentation for results that haven’t even been published yet. Were supposed to be out at 7am. Hopefully investors will be suitably angry and ask all the questions that us journalists are banned from asking.’

‘I called investor relations (at SD) and reception at 0800 to ask what was going on? They let my call ring for a full 4 minutes before it rang off!’

‘Sports Direct due to brief investors/media at 0900…will the presentation be as much of a no-show as its yet unpublished delayed results? share price drifting down as speculation fills vacuum of company’s silence.’

‘On 4 April 2014 Sports Direct shares were 922p and JD Sports were 82p. Today Sports Direct shares are 234p and JD Sports are 616p.’

‘I think we can say that Sports Direct need to sort their sh.. out. By all means delay your results, but if you say you’re going to release them on 26th July, at least be on time.

Late publication gives impression of incompetence…’

‘Still no Sports Direct results, 8:50am interview cancelled… Can only presume it was a big night round the fireplace.’

Ashley Armstrong – Retail and M & A Editor for The Times then revealed at 8.43am that Sports Direct had put out an ‘explanation’/’apology’ of kinds:

Statement from Sports Direct still finalising their results but anticipate still being today…?!

‘Unfortunately we are still finalising preliminary results.

‘We anticipate that our annual results will still be released today, with a presentaion to follow, and will update again at midday.

‘Apologies for any inconvenience.’

Maybe on this one occasion I would suggest that Mike Ashley should have been paying a little bit more attention to Sports Direct, rather than flying into the NUFC training ground in his helicopter trying to make out how great everything allegedly is at Newcastle United now, despite still only one signing made and only 13 days until the transfer window closes.

No doubt many Newcastle fans will be enjoying this morning’s latest chaos at Sports Direct for Mike Ashley, especially with it being very difficult to see that this will be positive news for MA and SD when they eventually make public these annual results.

The Mag – 15 July 2019:

Sports Direct have released a statement on Monday morning which has led to a sharp fall in their share price.

Unlike Newcastle United where Mike Ashley feels under no obligation to communicate anything, or do things in any kind of a professional way.

The NUFC owner has no such carte blanche freedom where Sports Direct is concerned, he may own the majority of shares BUT he does still have legal obligations to the other shareholders.

Ashley’s retail company were due to release their latest financials this week but have been forced to release a public statement, saying they are going to be later than planned, potentially more than five weeks late.

Financial commentators and investors have not surprisingly taken this to mean that this is now simply delaying what are sure to be very negative results.

The initial response saw the Sports Direct share price fall 15% by just after 9am.

A blow to all SD shareholders and especially Mike Ashley, seeing his paper/wallpaper wealth take a major hit.

Newcastle fans dream of ridding themselves of Ashley and live in hope that as his retail investments come under pressure, he will at last be willing to sell the club.

However, after forcing Rafa Benitez to make a major profit on transfer deals in and out last summer (2018), Mike Ashley then lifted £33m out of the cash flow to repay part of his ‘loan’, claiming (via the club’s official Fans Forum) that transfer targets hadn’t wanted to sign, thus leaving this surplus of cash.

As it stands now, Mike Ashley (via Lee Charnley) pledged that £60m minimum was available for signings this summer, plus any money raised by player sales.

With Ayoze Perez sold for £30m we are already up to potentially £90m sitting there, before any other player sales.

Some Newcastle fans seeing this Summer’s ridiculous actions as simply Mike Ashley cynically overseeing a transfer window where major profits can be made.

With this weekend alone bringing reports of interest in players such as Schar and Dubravka, both claimed to be now unsettled, as well as Isaac Hayden who remains desperate to leave due to family reasons, it isn’t unrealistic to imagine a pot of possibly £150m being built up due to more sales.

If we then see minimal spending on players coming in, could Mike Ashley really take out an amount after this transfer window which completely dwarfs that £33m?

Sport Direct Official Statement – Monday 15 July 2019:

‘Sports Direct announces that the publication of the Company’s preliminary results for the period ended 28 April 2019 will be delayed beyond 18 July 2019, the date Sports Direct had expected to announce.

The reasons for the delay are the complexities of the integration into the Company of the House of Fraser business, and the current uncertainty as to the future trading performance of this business, together with the increased regulatory scrutiny of auditors and audits including the FRC review of Grant Thornton’s audit of the financial statements of Sports Direct for the period ended 29 April 2018. These factors have led to a need for the Company to compile more information than in previous years for the audit of period ended 28 April 2019, and has therefore impacted on preparations for and responses to increased challenges in connection with this audit. Grant Thornton has also required additional time to complete its audit work for the period ended 28 April 2019 leading to the delay in the publication of the Company’s preliminary results announcement.

Sports Direct would also note that increased regulatory scrutiny is leading to longer lead times generally for the completion of audits.

Sports Direct believes its accounts and their audit to be at an advanced stage. However there are a number of key areas to conclude on which could materially affect the guidance given in Sports Direct’s announcement of 13 December 2018. Sports Direct would note that its core principles in regards to its financial statements are to be conservative, consistent and simple. This is an important element for the Company and is even more relevant in an uncertain economic environment for UK retail generally.

The Company now expects that its audited results will be published between 26 July 2019 and 23 August 2019.’

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