Frasers Group forced to delay results AGAIN
INVESTORS in Mike Ashley’s Frasers Group may be forgiven a feeling of deja vu.
The retailer, formerly known as Sports Direct, has delayed the publication of its annual results for a second year running, saying it needs more time to complete its accounts.
Last year it shocked the City when it delayed its accounts by a week before a fraught results day, which led critics to call it ‘an embarrassment to UK corporate governance’. When it finally released them late in the afternoon, ten hours after they were scheduled, it announced a £614m tax bill.
Its auditors Grant Thornton resigned in protest, raising concerns about the time it took to pass the information on.
Analysts had initially expected Frasers to release this year’s figures around mid-July before it was pushed forward to today. Frasers will now release its results on Thursday, August 20.
Coronavirus has thrown the process of writing accounts into mayhem just as a complex new reporting standard, called IFRS 16, comes into force. The Financial Reporting Council (FRC) regulator extended the period listed companies could report their results to six months from the end of their financial year, which is April 30 for Frasers.
The firm said in a statement to the market this week that the delay was ‘largely due to final IFRS 16 disclosures still being completed and reviewed’.
Yesterday, its shares fell 3.3pc, or 9.6p, to 284.6p. Tim Bush, head of governance and financial analysis at shareholder advisory Pirc, said: ‘The company clearly has a history of problems.
‘However, IFRS 16 is an absurd accounting standard which may well be giving problems.’
But the delayed results are the latest in a string of blunders and arguments over the years that have raised questions about Mike Ashley and his top team’s judgment.
In 2017 a court was told that he hosted a management meeting in a pub where he drank 12 pints and vomited into a fireplace.
The firm has repeatedly faced accusations of minimum wage violations and dangerous conditions in its warehouse in Shirebrook, Derbyshire, including one harrowing case of a woman giving birth alone in the toilets.
As coronavirus hit Britain, the retailer was lambasted for lobbying the Government to keep its shops open, arguing sports kit was ‘essential’.
It quickly backed down after a backlash, and Ashley later admitted the move was ‘illjudged and poorly timed’.
A few weeks later Sports Direct managers accused it of making them work while on furlough, seemingly in breach of the rules of the scheme.
Ashley’s plans to expand his business with a string of acquisitions has also had mixed results.
He was forced to admit that problems at House of Fraser, which he bought in August 2018 for £90m, were ‘nothing short of terminal’, adding that he might have made a ‘different decision’ in hindsight.
But in recent months his company has won plaudits for snapping up stakes in premium brands as part of plans to take his stores upmarket.
He has taken a 10.1pc stake in Hugo Boss and a 12.5pc stake in Mulberry. The business also performed well in the period before Covid-19 struck, without which sales would have increased by more than 13pc.
Its results day is often a colourful affair – and with Ashley at the helm City watchers will expect little different when results emerge next week.