Sports Direct’s profits have plummeted in the first half of the year as relentless bad press and a weakened pound take their toll on the sportswear retailer.
Mike Ashley’s company announced a 33.5 per cent drop in profits to £145 million in the first half of the year, compounding investor fears following a recent financial warning from the billionaire.
Despite the disapointing results, Ashley has just spent £40 million on a private corporate jet in order to “facilitate efficiencies”.
Failure to hedge against the sterling in the wake of the EU referendum has proven to be costly for the company.
“The last six months have been tough for our people and performance,” Ashley stated.
“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.”
Despite revenues growing by 4.2 per cent to £1.6 billion, pre-tax profits dropped a massive 57 per cent to £71.6 million.
In the last year the retailer stacked up seemingly endless controversies, and most recently Ashley came under investigation from the Financial Reporting Council for his company’s relationship with a delivery firm owned by his brother.
Despite this, Ashley has now entered Sports Direct into a relationship with Double Take Limited, on which his daughter Matilda Ashley is a director.
Ashley said of the year’s scandals: “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 hard-working and loyal.
“It is for this reason that my immediate priority will be to protect the people at Sports Direct.”