Mike Ashley’s Sports Direct International today reported a 91% dive in profits after its “strategic stakes” in rival retailers were frozen.
The Newcastle United owner’s sportswear firm, which trades as Sports World and Field & Trek, said its assets in other retailers – including JJB Sports, JD Sports Fashion, Blacks Leisure and sports equipment firm Amer Sports – had been written off after its Icelandic banking partner went into administration.
This coupled with currency and property write-downs had caused pre-tax profits to slump to £10.7m (€12.45m) in the year to April 26, from £118.9m (€138m) in the previous period, despite UK sales growing to more than £1bn (€1.16bn).
Sports Direct said that the write-down of £53.1m (€61.7m)was prompted by the collapse of Kaupthing Singer & Friedlander (KSF) last October, which had partly funded the holdings.
Sports Direct said it still considers itself the holder of the KSF stakes, but added it was in “dispute” with administrators on the issue.
The sportswear firm owns 4.8% of JJB, 13.3% of JD Sports and almost 30% of Blacks as well as a 1.5% stake in Amer.
It said underlying profits – with the impairments stripped out – had risen 20.2% and said it was pleased with the “solid” results.
Sports Direct shares rose 5% today.