Retailer orders new jet despite ‘tough’ trading

Shares fall as under pressure Sports Direct reveals a drop in profits

Profits at scandal-hit Sports Direct have taken a hammering following the collapse in sterling – but it has not stopped billionaire owner Mike Ashley splashing out on a new corporate jet.

Underlying earnings plunged 33.5% to £145.3 million in the first half of the year, slumping even further on a pre-tax basis, by 57% to £71.6m.

The group, which has endured a long list of controversies over the past months, compounded its PR problems by failing to hedge against the fall in the value of the pound in the immediate aftermath of the EU referendum.

Mr Ashley said: “The last six months have been tough for our people and performance.

“Our UK Sports Retail business continues to be the engine of Sports Direct, but our results have been affected by the significant deterioration in exchange rates, and our assessment of our risk relating to our stock levels and European stores performance.”

The company said revenue rose 14% to £1.6 billion, but warned of a challenging environment which the firm expects to continue into the “foreseeable future”.

Nevertheless, the half year results also reveal that, in order to “facilitate efficiencies”, Sports Direct will be taking delivery of a corporate plane in the coming weeks at a cost of £40 million.

This adds to a helicopter which is already used by “senior management, employees and our business partners on a regular basis”.

The move follows a string of controversies for the firm and its owner.

Mr Ashley sought to address the issues through the trading statement, claiming he would like Sports Direct to become the “Selfridges of sports retail.”

He said: “What matters most to me is how tough the last year has been for the people who work at Sports Direct.

“Our people have once again found themselves in the spotlight through no fault of their own, yet they remain hardworking and loyal.

“It is for this reason that my immediate priority will be to protect the people at Sports Direct,” he said.

But chairman Keith Hellawell hit out out at a “campaign” against the company which had blunted its performance.

“I have no doubt that the extreme political, union and media campaign waged against this company has not only damaged its reputation and influenced our customers, it has impacted negatively on the morale of our people,” Mr Hellawell said.

“I begin to question whether this intense scrutiny is all ethically motivated.”

He made an offer to Labour MP Iain Wright, who is heading up a parliamentary inquiry into the retailer, to visit the Shirebrook warehouse and meet the staff.

The invitation comes after MPs said in November they had discovered an undercover recording device during an unannounced visit to the facility.

Despite the Financial Reporting Council announcing an investigation into Sports Direct over the retailer’s relationship with a firm owned by the tycoon’s brother, the company said it has entered into an agreement with Double Take Limited, in which Matilda Ashley, Mike Ashley’s daughter, is a director.

Double Take will license Sports Direct exclusive rights to the cosmetic brand Sport.

Shares in Sports Direct closed the day down 8.29% at 288.8p.

Chief executive Mike Ashley says he would like Sports Direct to become the “Selfridges of sports retail.”