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Sports Direct chief executive Mike Ashley is putting a characteristically brave face on a 67.3 per cent drop in reported profits for the half year to the end of October, trumpeting a “spectacular trading performance”, while the company also says it wants to “move on” after a tussle relating to payments for Mr Ashley’s brother.
Profits dropped to £45.8m from £140.2m in the same period last year, the company said, while on its preferred underlying measure, stripping out currency stings, exceptional costs and other one-off nasties, profits grew by 23 per cent to £88m.
Group revenue rose by 4.7 per cent to £1.7bn, though UK sports revenues edged lower because of reduced online promotions and store closures.
Mr Ashley said:
Our high street elevation strategy is currently delivering spectacular trading performance within our flagship stores. We intend to open between 10 and 20 new flagship stores next year.
Whilst our reported profit before tax has been impacted by fair value adjustments and transitional factors such as the disposal of assets in FY17; our underlying profit before tax remains healthy. We will continue to invest for the long-term and our net debt has increased in line with management expectations.
On Wednesday, Sports Direct investors voted to block an £11m award to Mike Ashley’s brother John. The company said on Thursday that it “considers all these matters to be closed. We now intend to move on.”
After a long series of concerns over working conditions at Sports Direct, the retailer also added on Thursday that it “remains fully committed to ensuring that our people are treated with dignity and respect”.