Sports Direct profits crash

Sports Direct shares slumped after it announced full-year profits down 72.5%.

Profits plunged to £77.5 million in the year to April 29, from £281.6m a year earlier.

It was hit in part by an investment in Debenhams, having increased its total stake to 29.7% during the period.

The company upped its holding in the struggling department store chain in March, bringing it close to a level at which it must launch a takeover bid.

But a recent reduction in Debenhams’ value meant Sports Direct took an £85.4m hit as a result.

The company also has strategic investments in businesses including Goals Soccer Centres, French Connection, and House of Fraser.

Sports Direct said comparative figures from a year earlier were tough to match, having been boosted due to its sale of JD Sports shares and the disposal of the Dunlop brand.

The loss of Dunlop also hit revenues from its wholesale and licensing division, which dropped 22.7% to £186.3m. However, the disposal eased operating cost pressures which decreased 31%.

Total group revenue for the period was up 3.5% at £3.4 billion, although its UK sports retail sales fell 2% to £2.2bn.

Founder Mike Ashley noted the rise in the group’s underlying profits.

Sports Direct’s shares closed down 31.10p or 7.13% at 405p.

Picture: PA. Sports Direct founder Mike Ashley.