Sports Direct issues statement after Mike Ashley's remarks

Britain's biggest sportswear retailer Sports Direct said it expected its full-year core earnings to come in at or around the bottom of a previously announced range.

Wednesday, 23rd March 2016, 8:24 am
Updated Wednesday, 23rd March 2016, 8:27 am

The group released the one line statement after its deputy chairman Mike Ashley, who holds 55 per cent of its equity, said in a newspaper interview on Tuesday that its profits would fall, prompting the company’s shares to slump.

“Sports Direct wishes to clarify that its current expectations for adjusted underlying EBITDA (before share scheme costs) for the full year to the end of April 2016 are at or around the bottom of the range announced on 8 January 2016,” it said.

Sports Direct had provided guidance in January for a range of £380m-£420m for earnings before interest, tax, depreciation and amortisation.

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The under-pressure retailer saw its shares tumble, on Tuesday, after founder Mike Ashley admitted the group was “in trouble” and would see profits fall this year.

The deputy chairman of Sports Direct and the owner of Newcastle United said he blamed MPs for creating negative publicity that has hit the group’s performance.

He told The Times: “We are in trouble, we are not trading very well. We can’t make the same profit we made last year.”

He added: “We are supposed to be taking the profits up, they are not supposed to be coming down, and the more the media frenzy feeds on it, the more it affects us.”

The group, which runs around 400 stores across the UK, warned over profits in January after poor trading amid unusually warm weather over the Christmas period.

But independent retail analyst Nick Bubb said Mr Ashley’s comments in the interview with The Times were a “startling admission”.

Mr Ashley recently described the members of the Business, Innovation and Skills Committee as a “joke” after refusing to be questioned in Parliament about working conditions at the company.

MPs are discussing what action to take after Mr Ashley snubbed the summons to appear following criticism of the way his company treats workers at their warehouse in Shirebrook, Derbyshire.

On Monday, he reiterated his refusal to attend the committee and added he would not “stand idle” while the company is “subjected to public vilification”.