Sports Direct full year profit hit by stake in Debenhams
Sports Direct has posted a drop in full year pre-tax profit after taking an £85 million hit on its investment in Debenhams.
In the year to 29 April reported profit before tax slumped to £77.5 million from £281.6 million in the previous year.
The retailer said the fall was largely due to the profit on the sale of its Dunlop business and JD Sports shares that were included in the results for the prior year, as well as losses incurred by its investment in the Debenhams department store in the current year.
On an underlying basis pre-tax profit was up 34.5% to £152.9 million.
While group revenue increased by 3.5% to £3.36 billion, UK sports retail revenue declined by 2% and Europe revenue fell by 0.1%. Rest of World retail revenue was £192.4 million.
Sports Direct is currently working to enhance its retail proposition, particularly on the high street where it is opening a new generation of stores. It is also changing how it connects with consumers across its channels, including social, digital and in-store.
During the year the company completed an organisational development programme which resulted in an improved system for staff appraisals and led to a review of staff wages at all levels of the company in the UK,
Mike Ashley, Sports Direct chief executive, said: “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."
Michael Murray, Sports Direct head of elevation, added: "During FY18, we have seen growth in underlying EBITDA of 12.2%. The elevation strategy continues to exceed expectations.
“As the property pipeline and brand relationships accelerate, we are confident in achieving between a 5% and 15% improvement in underlying EBITDA for the coming financial period."
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