Mike Ashley sees his Sports Direct shares fall by £2bn since 2014 – Now asks government for audit advice
Mike Ashley and Sports Direct aren’t having the best of times of it.
Next month it is the annual Sports Direct shareholders meeting and more questions than ever before will be asked of Ashley’s running of the company, ahead of the meeting.
In July, the latest farce/disaster hit Sports Direct when the already postponed latest SD results statement didn’t appear when stated first thing in the morning and was then further delayed throughout that day, until when they were very belatedly announced, it was revealed that Sports Direct had just received an unexpected £605m tax bill from Belgian authorities.
This tax bill was said to have had to be assessed by Sports Direct auditor Grant Thornton before it could sign off the latest results/figures.
In that results statement, Sports Direct said that Grant Thornton would be put forward to be reappointed as auditors (they have been since 2007) yet again at the shareholders meeting in September (2019).
However, Grant Thornton yesterday revealed that they will not seek reappointment at the September annual Sports Direct shareholders meeting.
Sports Direct have previously stated that there were issues preventing any of the ‘Big Four’ accountancy firms (EY, KPMG, Deloitte and PWC) becoming Sports Direct auditors and so with Grant Thornton’s decision, the Financial Times have now reported that Sports Direct has asked the government to advise them what they can do, if the ‘troubled retailer becomes the first major listed business to fail to appoint an auditor.’
They report that in theory it is believed the government can appoint (force?) and auditor to take on the job but this has never been tested. However, this comes at a time when after various scandals and collapses, accountancy companies are now putting far more scrutiny on deciding who they want to do business with, in case they get caught up in further scandal and anything else that affects their reputation.
Not surprisingly, Newcastle United fans aren’t exactly sympathetic to what faces the club’s owner in his wider business empire, especially when Sports Direct have paid only £86,333 on average over the past 12 years for the massive worldwide advertising and profile provided by the football club.
Coincidentally, one of our writing contributors, David M, did a feature which in part looked at how the Mike Ashley and Sports Direct share value had been affected over time.
David saying (see below) that with SD shares falling from around £8 in late 2014 to around £2.30 on Tuesday, it represented Mike Ashley’s personal SD shares (around 60% of the company) falling in value from over £2.5bn to around £700m/£750m within five years.
However, it is even worse than that for Mike Ashley and Sports Direct as the SD shares actually hit a high of £9.22 on 4 April 2014 and yesterday’s latest news has impacted yet again, on Tuesday morning the share price was £2.39 but thanks to yesterday’s news it has helped knock more money off the share price, on Thursday morning standing at £2.15.
For Mike Ashley it means a personal drop in value of over £2bn on the paper price of his shares, when comparing that £9.22 in April 2014 with today’s price.
Newcastle fans living in hope that one day he will want/need to sell the club and for the first time genuinely put it up for sale.
Part of an article by David M on The Mag on Tuesday 13 August 2019:
There undoubtedly has been A LOT of adverse coverage on Mike Ashley recently, so does it have an impact ?
Well consider this :
As of today Sports Direct shares are about £2.30 each so the company as a whole is worth about £1.23bn, Mike Ashley owns approximately 60% of the company so his shares are worth something in the £700-£750m range .
But one year ago the shares were worth £4.00 each , making the company worth over £2bn and Mike Ashley’s share well over £1.25bn
And within the last five years shares have been as high a £8 each! At which point a 60% shareholding would have been worth over £2.5bn
So Mike Ashley remains a very wealthy individual but the value of his Sports Direct shareholding looks to have fallen by over £1.5bn in value…at a time when the stock market has generally been going up.
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