Sports Direct profits hit by weak pound
Sporting goods retailer Sports Direct has posted a decline in full year pre-tax profit after the company was hit by a weaker pound.
In the year to 30 April, underlying profit before tax decreased by 58.7% to £113.7 million largely due to currency movements and increased depreciation charges. Reported pre-tax profit was down 22.2% to 281.6 million.
Group revenue increased by 11.7% to £3.2 billion as UK sports retail revenue rose by 6.3%. International sports retail revenue climbed by 38%.
During the period, Sports Direct invested £317 million in property assets as it looked to elevate its sports retail proposition and become the “Selfridges” of sport.
Sports Direct chief executive Mike Ashley said: “We have invested over £300 million in property over the last year, and I am pleased to report that early indications show that trading in our new flagship stores is exceeding expectations.”
The company said it is has taken steps to “conservatively manage” currency volatility.
Ashley added: “As previously announced, the devaluation of Sterling against the US dollar has led to a significant impact on EBITDA and profits in FY17. We have put in place hedging arrangements to minimise the short-term impact of currency volatility, but like many UK retailers we remain exposed to medium/long term currency fluctuations. Our results were also impacted by provisions and depreciation charges.”
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