Sports Direct announces annual results

After revealing that a last-minute Belgium tax liability delayed the results on Friday, Sports Direct International said that group increased by 10.2 percent to 3,701.9 million pounds (4,577.8 million dollars) in the year to April 28, 2019 with UK Sports Retail increasing by 0.3 percent to 2,187.3 million pounds (2,704.8 million dollars). The company said underlying profit before tax increased 5 percent to 143.3 million pounds (177.2 million dollars), due to the inclusion of House of Fraser, but offset by lower depreciation and amortisation charges, while underlying basic EPS for the year decreased by 7.9 percent to 17.6p.

“In a challenging retail market, we believe innovative strategic partnerships will help to differentiate our offering and enhance the consumer experience by giving us ways to extend our reach into new retail channels and geographies. It is an exciting time but we also recognise the significant challenge that House of Fraser brings, so we are cautious about the year ahead,” said David Daly, Non-Executive Chair of the Sports Direct board of directors.

Sports Direct CFO resigns

Sports Direct also announced that its chief financial officer Jon Kempster has decided not to stand for re-election at the next annual general meeting and will therefore step down from his role and as an executive director from the board of directors with effect from end of the AGM to pursue other interests. The company added that Kempster is handing over to Chris Wootton who will be promoted from deputy chief financial officer to CFO effective September 12, 2019.

Highlights of Sports Direct’s results

The company added that European Sports Retail decreased by 5.9 percent to 599.8 million pounds (741.7 million dollars) including Heatons Republic of Ireland. Premium Lifestyle revenue increased by 26.3 percent, with revenue in the Wholesale & Licensing division down 12.2 percent. Rest of World Retail revenue was 215.9 million pounds (267 million dollars), up 12.2 percent and House of Fraser sales were 330.6 million pounds (408.8 million dollars) since acquisition.

Group gross margin in the year increased by 310 basis points from 39.7 percent to 42.8 percent. UK Sports Retail margin was up 130 basis points at 42.1 percent, while European Sports Retail increased 280 basis points from 40.8 percent to 43.6 percent. Premium Lifestyle's gross margin increased by 610 basis points to 39.4 percent, while Rest of World Retail margin was 40.2 percent.

The company said, group operating costs increased by 26.1 percent to 1,287.1 million pounds due to the inclusion of House of Fraser overheads, which resulted in, group underlying EBITDA declining by 6 percent to 287.8million pounds (355.9 million dollars). Excluding current year and prior year acquisitions, Group underlying EBITDA was up 9.5 percent to 357.4 million pounds.

Picture:Sports Direct media centre