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Profits more than halved at Sports Direct as embattled retailer banks on new CFO for turnaround

Beleaguered UK retailer Sports Direct has revealed that pretax profits fell by a whopping 58% in the last 12 months as a string of controversies surrounding working conditions and owner Mike Ashley have sent the firm’s stock into freefall.

The widely expected plunge announced as part of Sports Direct’s preliminary results for the year shows that profits fell from £275m last year to £113m for the year ending 30 April 2017, figures which the retailer blames on currency fluctuations and ‘increased depreciation charges’.

EBITDA also saw a sizeable dip, falling 28.5% to £272.7m that’s despite overall group revenues across its UK and international businesses rising 11% to £3.2bn.

In a statement, Chief Executive Mike Ashley struck a suitably defiant tone despite the grim financials and claimed the brand was still on course to become the ‘Selfridges of sport’, and that plans were in place to hedge against ongoing currency fluctuations.

He said: “We will continue to invest and make decisions for the long term, whilst trying to conservatively manage the currency volatility that is reflected in our full year results. 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.”

In an attempt to stem its losses and rescue its increasingly tattered reputation, Sports Direct has also announced it has appointed former Wincanton Group Financial Officer, Jon Kempster, as its new Chief Financial Officer (CFO).

Kempster replaces Matt Pearson who resigned in October last year and will be charged with turning around Sports Direct’s financial prospects as it embarks on its new strategy centered around its flagship stores.

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