// Sports Direct announces delay in publication of full year financial results
// Blames complexities around House of Fraser acquisition, trading uncertainty and increased regulatory scrutiny over one of its auditors
// Results now between July 26 and August 23
Sports Direct has announced it will delay the publication of its full year financial results, blaming complexities around the House of Fraser acquisition and recent trading uncertainty.
Mike Ashley’s retail company also warned it may need to change its previous financial guidance due to “a number of key areas” in relation to its accounts.
It also cited increased regulatory scrutiny over one of its auditors as another reason for the delay.
The company was due to publish results for its financial year ending April 28 on Thursday, but now expects them to be published between July 26 and August 23.
News of the delay prompted shares in Sports Direct to fall by almost 10 per cent to 237.8p this morning – its lowest level this year.
Ashley was slated to face investors and provide more details on his plans for leading House of Fraser back to its former glory and reassure investors that the recent sudden departure of his long-term lieutenant of 28 years, Karen Byers, would not impact the business.
There was also speculation that he could also face questions over his £52 million takeover of Game Digital, as well his failure to buy Debenhams before it fell into administration.
“The reasons for the delay are the complexities of the integration into the company of the House of Fraser business, and the current uncertainty as to the future trading performance of this business, together with the increased regulatory scrutiny of auditors and audits including the FRC review of Grant Thornton’s audit of the financial statements of Sports Direct for the period ended 29 April 2018,” Sports Direct said in a statement this morning.
The firm added that, because it now needs to compile more information than in previous years, “there are a number of key areas to conclude on which could materially affect the guidance given in Sports Direct’s announcement of 13 December 2018”.
Sports Direct currently owns larges chunks of the high street after going on a spending spree in the past year or so.
As well as buying House of Fraser out of administration for £90 million last August – with Ashley boasting plans to turn it into the “Harrods of the High Street” – the company recently bought Evans Cycles and Sofa.com.
Sports Direct also owns several sportswear brands, as well as lingerie retailer Agent Provocateur and luxury fashion chain Flannels.
House of Fraser booked an underlying pretax loss for the first six months of the year of £31.5 million on revenues of £70.1 million, although bosses have previously said it could break even in the new financial year.
Meanwhile, Grant Thornton was subject to the Financial Reporting Council’s annual review of audits by the UK’s large accountants.
The firm came bottom in the annual probe after the government watchdog reviewed its audits of several firms – of which Sports Direct was one.